9. STOCKHOLDERS’ EQUITY

Authorized Common Stock and Reverse Stock Split

The Company 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 the Company’s 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 for the Company to regain compliance with the minimum bid price requirement of $1.00 per share of common stock for continued listing on the Nasdaq Capital Market. The reverse stock split became effective on November 25, 2024, and the Company’s 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, the Company entered into an agreement with Leonard Mazur (Chairman and Chief Executive Officer of the Company), pursuant to which the Company 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 the Company’s Articles of Incorporation, as amended, to increase the number of shares of the Company’s authorized common stock from 16,000,000 to 250,000,000. The Company’s stockholders approved the authorized share increase on June 9, 2025.

On April 17, 2025, the Company 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 had 1,000,000,000 votes and voted together with the outstanding shares of Common Stock as a single class, exclusively with respect to the authorized share increase proposal and was not entitled to vote on any other matter. The Series A Preferred Stock was 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 had no other voting rights, including in respect of any other proposal. The voting power attributable to the Series A Preferred Stock was disregarded for purposes of determining whether a quorum was present at the special meeting, and the establishment of a quorum at the special meeting was 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 the Company published the final results of the stockholder vote on the authorized stock increase.

Common Stock Issued for Services

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.

On October 2, 2025, we issued 83,036 shares of common stock for media, and public and investor relations services and expensed the $107,510 fair value of the common stock issued.

Common Stock Offerings

November 2024 Offering

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 per share and accompanying warrant. 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 a fee of 7.0% of the gross proceeds and granted the placement agent immediately exercisable warrants to purchase 33,600 shares of common stock at an exercise price of $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.

January 2025 Offering

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 per share and accompanying warrant. 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 a fee of 7.0% 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.

April 2025 Offering

On April 1, 2025, Citius Pharma sold 465,000 shares of common stock at $1.15 per share and pre-funded warrants to purchase 1,274,131 shares of common stock at $1.1499 per share. 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 three months ended June 30, 2025.

We paid the placement agent a fee of 7.0% of the gross proceeds and granted the placement agent warrants to purchase 121,739 shares of common stock at an exercise price of $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.

June 2025 Offering

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, and accompanying warrants to purchase 9,840,000 shares of common stock, at $1.22 per share and accompanying warrant (or $1.2199 per pre-funded warrant and accompanying warrant). The immediately exercisable two-year warrants have an exercise price of $1.00 per share. On the expiration date, any warrants outstanding will be exercised via cashless exercise. The pre-funded warrants are exercisable immediately at $0.0001 per share and do not expire. Gross proceeds were $6,001,962 and net proceeds of the offering were $5,430,836, after deducting fees and expenses. During the year ended September 30, 2025, all 4,380,000 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 7.0% of the gross proceeds and expenses of $150,958 and granted placement agent warrants to purchase 344,400 shares of common stock at an exercise price of $1.525 per share, which expire on June 11, 2027. 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.

July 2025 Citius Oncology Offering

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 at $1.32 per share and accompanying warrant. The immediately exercisable five-year warrants had an initial exercise price of $1.32 per share. In connection with the December 10, 2025 offering (discussed below), Citius Oncology agreed to reduce the exercise price of the 6,818,182 warrants to $1.09 per share and extended the expiration date of the warrants to January 20, 2031. 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 on July 17, 2025 was approximately $8,197,000. The estimated fair value of the repriced warrants issued to the investors as of December 8, 2025 was approximately $5,301,000. On May 6, 2026, all of the warrants were repriced to $0.90 per share and exercised in connection with the warrant inducement transaction. The estimated fair value of the repriced warrants issued to the investors as of May 6, 2026 was approximately $4,598,000.

Citius Oncology paid the placement agent a fee of 7.0% of the gross proceeds and expenses of $125,000 and granted the placement agent warrants to purchase 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% cash fee to a prior placement agent and issued 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 placement agent warrants was approximately $905,000.

September 2025 Citius Oncology Offering

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, at $1.75 per share and accompanying warrant. The warrants are exercisable beginning on March 10, 2026 and expire on March 10, 2031 and had an initial exercise price of $1.84 per share. In connection with the December 10, 2025 offering (discussed below), Citius Oncology agreed to reduce the exercise price of the 5,142,858 warrants to $1.09 per share and extended the expiration date of the warrants to January 20, 2031. 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 on September 10, 2025 was approximately $6,995,000. The estimated fair value of the repriced warrants issued to the investors as of December 8, 2025 was approximately $4,179,000. On May 6, 2026, all of the warrants were repriced to $0.90 per share and exercised in connection with the warrant inducement transaction. The estimated fair value of the repriced warrants issued to the investors as of May 6, 2026 was approximately $3,468,000.

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 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% cash fee to a prior placement agent and issued 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 placement agent warrants was approximately $717,000.

October 2025 Offering

On October 21, 2025, Citius Pharma sold 1,460,000 shares of common stock and 2,513,510 pre-funded warrants, and accompanying warrants to purchase 3,973,510 shares of common stock at $1.51 per share and accompanying warrant (or $1.5099 per pre-funded warrant and accompanying warrant). The immediately exercisable five-year warrants have an exercise price of $1.40 per share. The immediately exercisable pre-funded warrants have an exercise price of $0.0001 per share and do not expire. Gross proceeds were approximately $6.0 million, before deducting placement agent fees and other expenses and net proceeds were $5,402,931. During the nine months ended June 30, 2026, all 2,513,510 pre-funded warrants were exercised. The estimated fair value of the 3,973,510 warrants issued to the investors was approximately $4,995,000.

We paid the placement agent a fee of 7.0% of the gross proceeds and expenses of $85,000, and issued the placement agent warrants to purchase 278,146 shares of common stock at an exercise price of $1.8875 per share. The warrants are exercisable commencing on October 21, 2025 and expire on October 20, 2030. The estimated fair value of the warrants issued to the placement agent was approximately $330,000.

December 2025 Citius Oncology Offering

On December 10, 2025, Citius Oncology sold 1,284,404 shares of its common stock and accompanying warrants to purchase 1,284,404 shares of common stock, at $1.09 per share and accompanying warrant, and additionally sold 15,229,358 pre-funded warrants and accompanying warrants to purchase 15,229,358 shares of common stock at $1.0899 per pre-funded warrant and accompanying warrant. Aggregate gross proceeds from the offering were approximately $18.0 million and net proceeds were $15,062,724, after deducting placement agent fees and other offering expenses. The 15,229,358 pre-funded warrants are immediately exercisable at $0.0001 per share and do not expire. During the nine months ended June 30, 2026, Citius Oncology received net proceeds of $818 from the exercise of 8,183,358 pre-funded warrants. At June 30, 2026, 7,046,000 of the pre-funded warrants remain outstanding. The 16,513,762 warrants have an exercise price of $1.09 and are exercisable for five years after stockholder approval, which was effective on February 18, 2026. The estimated fair value of the 16,513,762 warrants issued to the investors was approximately $13,196,000. On May 6, 2026, all of the warrants were repriced to $0.90 per share and warrants to purchase 816,738 shares were exercised in connection with the warrant inducement transaction and warrants to purchase 15,697,024 remain outstanding. The estimated fair value of the repriced warrants issued to the investors as of May 6, 2026 was approximately $11,136,000.

Citius Oncology paid the placement agent a fee of 7.0% of the gross proceeds and expenses of $135,000. Additionally, Citius Oncology issued placement agent warrants to purchase 1,155,963 shares of its common stock at an exercise price of $1.3625 per share exercisable on or before December 8, 2030. Citius Oncology also paid an additional 7.0% cash fee to a prior placement agent and issued warrants to purchase up to 660,550 shares of its common stock at an exercise price of $1.199 per share exercisable on or before December 8, 2030. The estimated fair value of the placement agent warrants was approximately $1,401,000.

April 2026 Registered Direct Offering

On April 24, 2026, Citius Pharma closed a registered direct offering for the sale of 4,730,457 shares of common stock at $0.985 per share and 345,686 pre-funded warrants at $0.9849 per warrant. Net proceeds were $4,453,184, after deducting placement agent fees and expenses. The pre-funded warrants were exercisable at $0.0001 per warrant and were all exercised on April 24, 2026 for $34. The Company issued immediately exercisable five-year warrants to the investors for 5,076,143 shares of common stock at $0.86 per share. The estimated fair value of the warrants issued to the investors was approximately $2,829,000.

We paid the placement agent a fee of 7.0% of the gross proceeds and expenses of $85,000, and issued the placement agent warrants to purchase 355,330 shares of common stock at an exercise price of $1.2313 per share. The warrants are immediately exercisable and expire on April 23, 2031. The estimated fair value of the warrants issued to the placement agent was approximately $184,000.

May 2026 Warrant Inducement Transaction

On May 5, 2026, Citius Oncology entered into an agreement with the holder of certain existing warrants to purchase 12,777,778 shares of common stock at $0.90 per share, which consists of all of the 6,818,182 warrants issued in July 2025, all of the 5,142,858 warrants issued in September 2025, and 816,738 warrants issued in December 2025, each with an exercise price of $1.09 per share. Exercise of the warrants for cash is subject to a beneficial ownership limitation of 9.99%. If the beneficial ownership limitation applies, the issuance of the shares of common stock are held in abeyance until compliance with the beneficial ownership limitation.

As an inducement to the holder for exercising the 12,777,778 warrants in cash at a reduced exercise price of $0.90 per share, Citius Oncology issued to the holder new five-year warrants to purchase 25,555,556 shares at $0.90 per share. Net proceeds were $9,730,000, after deducting placement agent fees and expenses of $1,770,000. The estimated fair value of the 25,555,556 warrants issued to the investors was approximately $17,233,000.  The combined fair value of $18,342,000 was recognized as an equity issuance cost within additional paid-in capital with no impact on total stockholders’ equity.

Citius Oncology paid the placement agent a fee of 7.0% of the gross proceeds and expenses of $85,000. Additionally, Citius Oncology issued placement agent warrants to purchase 894,444 shares at $1.125 per share. Citius Oncology also paid an additional 7.0% cash fee to a prior placement agent and issued warrants to purchase 511,111 shares at $1.199 per share. The placement agent warrants are exercisable commencing on June 18, 2026, and expire on June 18, 2031. The estimated fair value of the placement agent warrants was approximately $903,000.

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 shares of our common stock.

During the three months ended March 31, 2025, we sold 289,910 shares for gross proceeds of $839,468. Net proceeds after deducting broker fees and other offering expenses were $808,640.

During the three months ended June 30, 2025, we 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, we sold 442,715 shares for gross proceeds of $657,284. Net proceeds after deducting broker fees and other offering expenses were $626,843.

During the three months ended December 31, 2025, we sold 252,137 shares for gross proceeds of $362,296. Net proceeds after deducting broker fees and other offering expenses were $349,254.

Citius Pharma Stock Option Plans

Under our 2014 Stock Plan, we reserved 34,667 shares of common stock. As of June 30, 2026, there were options to purchase 13,710 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 June 30, 2026, there were options to purchase 67,200 shares outstanding and no shares available for future grants.

Under our 2020 Stock Plan, we reserved 124,400 shares of common stock. As of June 30, 2026, 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 June 30, 2026, options to purchase 330,000 shares were outstanding and no shares available for future grants.

Under our 2023 Stock Plan, we reserved 481,400 shares of common stock. As of June 30, 2026, 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, 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 our stock option plans (excluding the NoveCite and Citius Oncology Stock Plans) is presented below:

At June 30, 2026, unrecognized total compensation cost related to unvested awards under the Citius Pharma stock plans of $649,996 is expected to be recognized over a weighted average period of 1.07 years.

NoveCite Stock Plan - Under the NoveCite 2020 Stock Plan, we reserved 2,000,000 common shares of NoveCite. The NoveCite Stock Plan provides incentives to employees, directors, and consultants through grants of options, SARs, dividend equivalent rights, restricted stock, restricted stock units, or other rights.

As of June 30, 2026, NoveCite has options outstanding to purchase 1,911,500 common shares of NoveCite, all of which are exercisable, and 88,500 shares available for future grants. All of the options were issued during the year ended September 30, 2021, 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 4.42 years and the weighted average exercise price is $0.24 per share. At June 30, 2026, there is no unrecognized compensation cost related to these awards and no aggregate intrinsic value.

Citius Oncology Stock Plan - Under the Citius Oncology 2023 Omnibus Stock Incentive Plan, we reserved 15,000,000 common shares of Citius Oncology. Under the Citius Oncology 2024 Omnibus Stock Incentive Plan, we reserved 15,000,000 common shares of Citius Oncology and amended the 2024 Stock Plan on October 27, 2025 to reserve an additional 15,000,000 shares for an aggregate of 30,000,000 shares of common stock under the Citius Oncology 2024 Omnibus Stock Incentive 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.

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 Pharma 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 stock plans is presented below:

At June 30, 2026, unrecognized total compensation cost related to unvested awards under the Citius Oncology stock plans of $1,726,594 is expected to be recognized over a weighted average period of 1.42 years.

Citius Oncology Restricted Stock Units

On September 19, 2025, Citius Oncology granted restricted stock units of 11,600,000 shares of common stock to employees and directors. The restricted stock units vest on September 19, 2028. The fair value of the common stock on the date of grant was $20,300,000 ($1.75 per share). On March 24, 2026, Citius Oncology granted restricted stock units of 350,000 shares of common stock to an employee and a consultant. The restricted stock units vest on March 24, 2029. The fair value of the common stock on the date of grant was $203,000 ($0.58 per share).

At June 30, 2026, unrecognized total compensation cost related to unvested restricted stock units under the stock plans of $15,224,629 is expected to be recognized over a weighted average period of 2.23 years.

Stock-based Compensation Expense

Stock-based compensation expense under all plans for the three months ended June 30, 2026 and 2025 was $3,810,665 (including $249,874 for Citius Pharma options, $1,858,443 for Citius Oncology options and $1,702,348 for Citius Oncology restricted stock units) and $2,719,674 (including $594,437 for Citius Pharma options and $2,125,237 for Citius Oncology options), respectively.

Stock-based compensation expense under all plans for the nine months ended June 30, 2026 and 2025 was $11,879,167 (including $835,616 for Citius Pharma options, $5,968,921 for Citius Oncology options and $5,074,630 for Citius Oncology restricted stock units) and $7,946,529 (including $1,924,242 for Citius Pharma options and $6,022,287 for Citius Oncology options), respectively.

Citius Pharma Warrants

We have reserved 23,247,210 shares of common stock for the exercise of outstanding warrants. The following table summarizes the warrants outstanding at June 30, 2026:

At June 30, 2026, the weighted average remaining life of the outstanding warrants is 2.74 years, all warrants are exercisable and the aggregate intrinsic value of the warrants outstanding was $0.

Citius Oncology Warrants

Citius Oncology has reserved 53,947,473 shares of common stock for the exercise of outstanding warrants. The following table summarizes the warrants outstanding at June 30, 2026:

At June 30, 2026, the weighted average remaining life of the outstanding warrants was estimated at 4.23 years and all warrants are exercisable. At June 30, 2026 the aggregate intrinsic value of the warrants outstanding was $4,579,195.

Citius Pharma Common Stock Reserved

A summary of common stock reserved for future issuances by Citius Pharma excluding all subsidiaries as of June 30, 2026 is as follows:

Citius Oncology Common Stock Reserved

A summary of common stock reserved for future issuances by Citius Oncology as of June 30, 2026 is as follows: