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Risk Overview Q2, 2026
Risk Distribution
59% Finance & Corporate
16% Tech & Innovation
9% Legal & Regulatory
9% Ability to Sell
5% Production
2% Macro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Citius Oncology Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q2, 2026
Main Risk Category
Finance & Corporate
With 33 Risks
Finance & Corporate
With 33 Risks
Number of Disclosed Risks
56
+4
From last reportS&P 500 Average: 31
56
+4
From last reportS&P 500 Average: 31
Recent Changes
4Risks added
0Risks removed
0Risks changed
Since Jun 2026
4Risks added
0Risks removed
0Risks changed
Since Jun 2026
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1
0
No changes from last report
S&P 500 Average: 1
See the risk highlights of Citius Oncology in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 56
Finance & Corporate
Total Risks: 33/56 (59%)Above Sector Average
Share Price & Shareholder Rights18 | 32.1%
Share Price & Shareholder Rights - Risk 1
The conversion of loan principal into shares of our common stock and the exercise of Lender Warrants could result in significant dilution to our existing stockholders and may adversely affect the market price of our common stock.Added
Share Price & Shareholder Rights - Risk 2
Citius Pharma currently performs or supports many of our important corporate functions, which would be difficult to replace if Citius Pharma were to cease providing and we are obligated to pay to Citius Pharma the fees for services under the A&R Shared Services Agreement and must repay the principal due on a promissory note issued in August 2024.Citius Pharma provides all of our operational functions, systems and infrastructure pursuant to the A&R Shared Services Agreement. We may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost, comparable to those that we receive from Citius Pharma under the A&R Shared Services Agreement. Additionally, after that agreement terminates, we may be unable to sustain the services at the same levels or obtain the same benefits as when we were receiving such services and benefits from Citius Pharma. When we begin to operate these functions separately, if we do not have our own adequate systems and business functions in place, or are unable to obtain them from other providers, we may not be able to operate our business effectively or at comparable costs, and our profitability may decline. In addition, we have historically received informal support from Citius Pharma, which may not be addressed in the agreements with Citius Pharma. The level of this informal support is expected to diminish over time.
The loss of some or all of these services would be difficult for the Company to replace quickly if at all. Such a loss would be expected to have a material adverse effect on the Company's operations at least in the near term.
In addition, we owe Citius Pharma for fees for each of the services set forth in the A&R Shared Services Agreement and we reimburse Citius Pharma for all reasonable out-of-pocket costs and expenses that it incurs in connection with providing the services.
In connection with the closing of the Merger, Citius Pharma made a loan to the Company. The loan is evidenced by an unsecured promissory note issued by the Company, dated August 16, 2024, as amended September 10, 2025, in the principal amount of $3,800,111 to Citius Pharma. The promissory note bears no interest and is repayable in full upon the date at which the Company has closed a series of capital raises that in the aggregate provide gross proceeds of at least $50 million through the issuance of debt or equity securities or the royalty-backed monetization of LYMPHIR™. To date the Company has raised $36 million in capital raises and the likelihood of raising an additional $14 million to trigger the repayment obligation is uncertain at this time.
These costs we owe for services rendered by Citius Pharma to the Company and under the terms of the promissory note could have a material adverse effect on the Company's operations and revenues.
Share Price & Shareholder Rights - Risk 3
Certain of our directors and officers may have actual or potential conflicts of interest because of their positions with Citius Pharma.Suren Dutia, Myron Holubiak, Dr. Eugene Holuka, Leonard Mazur, Dennis McGrath, Robert Smith, and Carol Webb serve on the Board. Mr. Mazur, Jaime Bartushak and Dr. Czuczman, continue to serve as our executive officers. All of these individuals continue in their director and/or management positions with Citius Pharma.
In addition, such directors and officers own shares of Citius Pharma common stock, and warrants and/or options to purchase shares of Citius Pharma common stock. Their position at Citius Pharma and the ownership of Citius Pharma equity or equity awards creates, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for Citius Pharma than the decisions have for the Company. For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between Citius Pharma and the Company regarding the terms of the A&R Shared Services Agreement governing the services provided by Citius Pharma to the Company and the relationship between the companies. Potential conflicts of interest may also arise if the Company enters into commercial arrangements with Citius Pharma in the future. As a result of these actual or apparent conflicts, the Company might be precluded from pursuing certain growth initiatives.
Share Price & Shareholder Rights - Risk 4
Conflicts of interest may arise from our relationship with Citius Pharma.Except for one director, all of our directors, executive officers and employees will also be directors and employees of Citius Pharma; the employees are all available pursuant to the A&R Shared Services Agreement. As a result of this arrangement, our relationship with Citius Pharma could give rise to certain conflicts of interest that could have an impact on our research and development programs, business opportunities, and operations generally.
Even though we are developing different technologies in different fields than Citius Pharma, we could be in competition with Citius Pharma for research scientists, financing and other resources, licensing, manufacturing, and distribution arrangements. Citius Pharma will engage for its own business in research and product development programs, investments, and business ventures, and we will not be entitled to participate or to receive an interest in those programs, investments, or business ventures. Citius Pharma will not be obligated to present any particular research and development, investment, or business opportunity to us, even if the opportunity would be within the scope of our research and development plans or programs, business objectives, or investment policies. These opportunities may include, for example, opportunities to acquire businesses or assets, including but not limited to patents and other intellectual property that could be used by us or by Citius Pharma. Each conflict of interest will be resolved by the respective boards of directors in keeping with their fiduciary duties and such policies as they may implement from time to time.
Share Price & Shareholder Rights - Risk 5
We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our shares less attractive to investors.We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including exemption from compliance with the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until the earliest of: (a) the fifth anniversary of the closing of TenX's initial public offering, which was consummated on October 18, 2022, (b) the end of the fiscal year in which our total gross revenues exceed $1.235 billion, (c) the date one we qualify as a large accelerated filer as that term is defined by Rule 12b-2 of the Exchange Act, or (d) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
We are also a smaller reporting company as defined in the Exchange Act. Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company," which would allow us to take advantage of many of the same exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in our registration statements, periodic reports and proxy statements. We will be able to take advantage of these scaled disclosures for so long as our common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million during the most recently completed fiscal year and our common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and its market price may be more volatile.
Share Price & Shareholder Rights - Risk 6
The Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between the Company and our stockholders and that the federal district courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the "Securities Act"), which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees or the underwriters or any offering giving rise to such claim.The Certificate of Incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, the Certificate of Incorporation or the Bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine; provided that this provision would not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. These choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors and officers, which may discourage such lawsuits against us and our directors and officers or could result in increased costs for our stockholders to bring a claim in the chosen forum. If a court were to find the choice of forum provisions in the Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
Share Price & Shareholder Rights - Risk 7
Provisions in our Certificate of Incorporation, Bylaws and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.Our Certificate of Incorporation and Bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of the Board. The provisions in our governance documents include the following:
- a classified board of directors divided into three classes, with only one class of directors being elected in each year and each class serving a three-year term, which may delay the ability of stockholders to change the membership of a majority of the Board;- no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;- in the event that Citius Pharma ceases to beneficially own more than 50% of the voting power of the then-outstanding shares of stock entitled to vote generally in the election of directors (the "Trigger Event,"), the approval of at least 66-2/3% of the shares entitled to vote will be required to remove a director for cause, and the prohibition on removal of directors without cause;- the ability of the Board to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;- the ability of the Board to alter our Bylaws without obtaining stockholder approval;- upon the occurrence of the Trigger Event, the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend or repeal the Bylaws or repeal the provisions of our Certificate of Incorporation regarding the election and removal of directors;- upon the occurrence of the Trigger Event, a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;- upon the occurrence of the Trigger Event, the requirement that a special meeting of stockholders may be called only by the Board, the chair of the Board, the chief executive officer, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;- advance notice procedures that stockholders must comply with in order to nominate candidates to the Board or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own slate of directors or otherwise attempting to obtain control of us; and - upon the occurrence of the Trigger Event, we also become subject to the anti-takeover provisions contained in Section 203 of the General Corporation Law of the State of Delaware ("DGCL"). Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of our capital stock unless the holder has held the stock for three years or, among other exceptions, the Board has approved the transaction.
Share Price & Shareholder Rights - Risk 8
Volatility in our share price could subject us to securities litigation.In the past, securities litigation has often been brought against a company following a decline in the market price of its securities. If we face such litigation, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.
Share Price & Shareholder Rights - Risk 9
We are a controlled company within the meaning of the Nasdaq continued listing requirements and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements. Our stockholders may not have the same protection afforded to stockholders of companies that are subject to such governance requirements.Citius Pharma controls approximately 79% of the voting power of the outstanding shares of common stock as of December 10, 2025. As a result, the Company is a "controlled company" within the meaning of the corporate governance standards of Nasdaq. Under these corporate governance standards, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements. For example, controlled companies:
- are not required to have a board that is composed of a majority of "independent directors" as defined under the Nasdaq continued listing requirements;- not required to have a compensation committee that is composed entirely of independent directors or have a written charter addressing the committee's purpose and responsibilities; and - are not required to have director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominating and corporate governance committee that is composed entirely of independent directors, and to adopt a written charter or a board resolution addressing the nominations process.
While we do not currently rely on these exemptions, we may opt to utilize these exemptions in the future as long as we remain a controlled company. Accordingly, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
Share Price & Shareholder Rights - Risk 10
If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse opinion regarding our common stock, our stock price and trading volume could decline.The trading market for common stock may be influenced by the research and reports that industry or securities analysts publish about us or our business. We currently have research coverage by three securities and industry analysts. If any of the analysts who cover us issue an adverse opinion regarding us, our business model, our intellectual property or our stock performance, or if our commercialization efforts for LYMPHIR, or any clinical trials and operating results fail to meet the expectations of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
Share Price & Shareholder Rights - Risk 11
Our Certificate of Incorporation allows for our Board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of the common stock.Our Board has the authority to issue up to 10,000,000 shares of preferred stock and to fix and determine the relative rights and preferences of any such preferred stock without further stockholder approval. As a result, our Board could authorize the issuance of one or more series of preferred stock that would grant preferential rights to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the preferred shares, together with a premium, prior to the redemption of the common stock. In addition, our Board could authorize the issuance of a series of preferred stock that has greater voting power than the common stock or that is convertible into common stock, which could decrease the relative voting power of the common stock or result in dilution to our existing stockholders.
Share Price & Shareholder Rights - Risk 12
If our common stock were delisted and determined to be a "penny stock," a broker-dealer may find it more difficult to trade the common stock and an investor may find it more difficult to acquire or dispose of the common stock in the secondary market.If our common stock were removed from listing with The Nasdaq Capital Market, we may be subject to the so-called "penny stock" rules. The SEC has adopted regulations that define a "penny stock" to be any equity security that has a market price per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange, which is the exception on which we rely. For any transaction involving a "penny stock," unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain exceptions. If the common stock were delisted and determined to be a "penny stock," a broker-dealer may find it more difficult to trade the common stock and an investor may find it more difficult to acquire or dispose of the common stock on the secondary market.
Share Price & Shareholder Rights - Risk 13
If we fail to meet the Nasdaq continued listing requirements, it could result in a suspension or delisting of the common stock.The common stock is listed for trading on The Nasdaq Capital Market, and the continued listing of the common stock on The Nasdaq Capital Market is subject to compliance with a number of listing standards. These listing standards include the requirement of maintaining a minimum level of stockholders' equity and maintaining a minimum stock price of $1.00. The failure to meet any listing standard would subject Company to potential loss of listing.
If the common stock were no longer listed on The Nasdaq Capital Market or any other Nasdaq market, investors might only be able to trade on one of the over-the-counter markets, including the OTC Bulletin Board or in the Pink Sheets (a quotation medium operated by Pink Sheets LLC). This would impair the liquidity of the common stock, not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction in media coverage. In addition, we could face significant material adverse consequences, including:
- a limited availability of market quotations for our securities;- a limited amount of news and analyst coverage for us; and - a decreased ability to issue additional securities or obtain additional financing in the future.
In the event of a future delisting, we intend to take actions to restore our compliance with Nasdaq's continued listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq's continued listing requirements.
Share Price & Shareholder Rights - Risk 14
Substantial sales of our common stock may occur in connection with the potential distribution of shares by Citius Pharma, which could cause our stock price to decline.Citius Pharma has stated its intention to effect a pro rata distribution of an undetermined amount of the common stock it holds in Citius Oncology to Citius Pharma stockholders at a yet-to-be determined date in the future. As of December 10, 2025, approximately 79% of our outstanding shares of common stock are owned by Citius Pharma. The timeline and details with respect to such distribution have not been announced. Stockholders receiving shares of our common stock in such distribution may be able to sell those shares immediately in the public market. Although we have no actual knowledge of any plan or intention of any significant Citius Pharma stockholder to sell our common stock following the potential distribution, it is likely that some Citius Pharma stockholders, possibly including some of its larger stockholders, would sell their shares of our common stock received in the potential distribution if we do not fit their investment objectives or in order to cover the related tax liability. The sales of significant amounts of our common stock or the perception in the market that this will occur may decrease the market price of our common stock and increase the volatility of our common stock.
Share Price & Shareholder Rights - Risk 15
You may experience dilution of your ownership interests because of the future issuance of additional shares of common stock or securities convertible into common stock.For the foreseeable future, until LYMPHIR generates significant revenue, if at all, we will need to raise capital to finance our operations, including possible acquisitions or strategic transactions. To do so, we might be required to issue equity securities, resulting in the dilution of the ownership interests of our present stockholders. The Company is currently authorized to issue an aggregate of 400,000,000 shares of common stock and 10,000,000 shares of preferred stock, of which 84,797,846 shares are outstanding as of December 23, 2025. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees, or for other business purposes. The future issuance of any such additional shares of common stock or common stock equivalents may create downward pressure on the trading price of the common stock.
Share Price & Shareholder Rights - Risk 16
Future sales of a substantial number of shares of our common stock may cause the price of our common stock to decline.Subject to certain exceptions, the amended and restated registration rights agreement entered into in connection with the Merger (the "A&R Registration Rights Agreement") provides for certain restrictions on transfer with respect to the securities of the Company, including shares held by 10XYZ Holdings, LP, the sponsor of TenX, and securities held by certain directors and officers of the Company and Citius Pharma. Such restrictions expired February 9, 2025, subject to certain exceptions. Following the expiration of the lock-up period, such equity holders are not restricted from selling or distributing shares of common stock held by them, other than by applicable securities laws.
Further, because we are not expected to generate revenue in the near future, we will need to continue to raise capital through one or more equity financings in order to continue commercializing LYMPHIR and developing our other product candidates. As such, sales of a substantial number of shares of common stock and/or securities convertible into common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of the common stock.
Share Price & Shareholder Rights - Risk 17
The market price of our common stock is highly volatile, and you may lose some or all of your investment.Following the Merger, the market price of our common stock has fluctuated significantly due to a number of factors, some of which are beyond our control, including those factors discussed in this "Risk Factors" and "Risk Factor Summary" section of this report and many others, such as:
- the Company's cash resources available to successfully commercialize LYMPHIR, including covering the costs of licensing payments, product manufacturing and other third-party goods and services;- the Company's ability to meet its contractual obligations;- the Company's ability to commercialize LYMPHIR or any future product candidates, if approved;- the level of success and the cost of our marketing efforts for LYMPHIR and any future product candidates;- unanticipated serious safety concerns related to the use of LYMPHIR or any other product candidate;- announcements regarding results of any pre-clinical or clinical trials relating to our future product candidates;- adverse regulatory decisions;- changes in laws or regulations applicable to LYMPHIR or any future product candidates, including but not limited to clinical trial requirements for approvals and post-approval requirements;- the Company's dependence on third parties and on Citius Pharma under the A&R Shared Services Agreement;- future issuances of debt or equity securities;- actual or anticipated fluctuations in the Company's financial condition and operating results, including fluctuations in our quarterly and annual results;- the Company's inability to establish additional partnerships, the termination of license agreements by our existing partners or announcements by our partners regarding therapeutic candidates competitive with ours;- the introduction of new technologies or enhancements to existing technologies by us or others in the industry;- the recruitment or departure of key scientific or management personnel;- announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by the Company or our competitors;- the Company's failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public;- publication of research reports about us, the indications we seek to treat or our industry, or oncology research in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts;- changes in the market valuations of similar companies;- overall performance of the equity markets;- announcements or actions taken by Citius Pharma as the Company's majority stockholder;- sales (or distributions) of our common stock by Citius Pharma, or our other stockholders in the future;- trading volume of our common stock;- legal disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain and maintain patent protection for LYMPHIR or any future product candidates, government investigations and the results of any proceedings or lawsuits, including, but not limited to, patent or stockholder litigation;- significant lawsuits, including patent or stockholder litigation;- the impact of any natural disasters or public health emergencies;- general economic, industry and market conditions other events or factors, many of which are beyond the Company's control; and - changes in accounting standards, policies, guidelines, interpretations or principles.
In addition, in the past, stockholders have initiated Company action lawsuits against biotechnology and biopharmaceutical companies following periods of volatility in the market prices of these companies' stock. Such litigation, if instituted against us, could cause the Company to incur substantial costs and divert our management's attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.
Share Price & Shareholder Rights - Risk 18
We are controlled by Citius Pharma, whose interests may differ from those of public stockholders.Citius Pharma holds approximately 79% of the voting power of us as of December 10, 2025, which means that Citius Pharma controls the vote of all matters submitted to a vote of the Company's stockholders. This control enables Citius Pharma to control the election of the members of the Board and all other corporate decisions. In particular, for so long as Citius Pharma continues to own a majority of the common stock, Citius Pharma will be able to cause or prevent a change of control of our Company or a change in the composition of the Board and could preclude any unsolicited acquisition of our Company.
Pursuant to the A&R Registration Rights Agreement and the Certificate of Incorporation, Citius Pharma has certain rights, and the ability to take certain actions, which are not otherwise available to all stockholders. For example, the A&R Registration Rights Agreement provides Citius Pharma the right, subject to certain conditions, to demand that the Company file a registration statement or request that its shares of common stock be covered by a registration statement that the Company is otherwise filing. In addition, until such time as Citius Pharma first ceases to own greater than 50% of the outstanding voting power of the common stock, the Certificate of Incorporation will effectively provide Citius Pharma with the ability to fill vacancies on the Board, remove directors (with or without cause), act by written consent of the stockholders, call a special meeting of the Company stockholders, amend the Certificate of Incorporation and the Bylaws (subject to approval of the Board). The directors so elected will have the authority, subject to the terms of any indebtedness and applicable rules and regulations, to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions.
Even when Citius Pharma ceases to control a majority of the total voting power of the Company, for so long as Citius Pharma continues to own a significant percentage of the common stock, Citius Pharma will still be able to significantly influence the composition of the Board and the approval of actions requiring stockholder approval. Accordingly, for such period of time, Citius Pharma will have significant influence with respect to the Company's management, business plans and policies. Because of the significant ownership position held by Citius Pharma, and our classified Board structure, new investors may not be able to effect a change in the Company's business or management. The concentration of ownership and availability of the foregoing rights could deprive stockholders of an opportunity to receive a premium for their shares of common stock as part of a sale of the Company and ultimately might affect the market price of the common stock.
Furthermore, the interests of Citius Pharma may not be aligned with those of other stockholders and this could lead to actions that may not be in the best interests of other stockholders. For example, Citius Pharma may have different tax positions or strategic plans for the Company, which could influence its decisions regarding whether and when the Company should dispose of assets, issue equity or incur indebtedness. Additionally, Citius Pharma's significant ownership in the Company may discourage someone from making a significant equity investment in us or could discourage transactions involving a change in control.
In addition, in the ordinary course of its pharmaceutical business activities, Citius Pharma may engage in fields or activities where its interests conflict with our interests or those of our other stockholders, such as investing in or advising businesses that directly or indirectly compete with certain portions of the Company's business or those businesses that are suppliers or customers of us. The Certificate of Incorporation provides that, to the fullest extent permitted by law, none of Citius Pharma nor its affiliates or any person or entity who, while a stockholder, director, officer or agent of us or any of our affiliates, is a director, officer, principal, partner, member, manager, employee, agent and/or other representative of Citius Pharma and its affiliates (each an "Identified Person") will have any duty to refrain from (i) engaging in a corporate opportunity in the same or similar business activities or lines of business in which we or our affiliates are engaged or that are deemed to be competing with us or any of our affiliates or (ii) otherwise investing in or providing services to any person that competes with us or our affiliates engaging, directly or indirectly, in the same or similar business activities or lines of business in which we operate. In addition, to the fullest extent permitted by law, no Identified Person will have any obligation to offer us or our affiliates the right to participate in any corporate opportunity in the same or similar business activities or lines of business in which we or our affiliates are engaged or that are deemed to be competing with us or any of our affiliates. This means that Citius Pharma may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. In addition, Citius Pharma may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to our stockholders or may not prove beneficial.
Accounting & Financial Operations7 | 12.5%
Accounting & Financial Operations - Risk 1
Our financial statements may not necessarily be indicative of the conditions that would have existed if we had been operated as an unaffiliated company of Citius Pharma.Accounting & Financial Operations - Risk 2
Our operating results may fluctuate significantly.We expect our operating results to be subject to quarterly, and possibly annual, fluctuations. Our net loss and other operating results will be affected by numerous factors, including:
- results of the launch and commercialization of LYMPHIR;- variations in the level of expenses related to the commercialization of LYMPHIR and any other aspects of Company's development programs;- the level of demand for LYMPHIR and the extent of our market penetration; and - regulatory developments affecting LYMPHIR or any future product candidates, including post-approval matters.
If our quarterly or annual operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly or annual fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.
Accounting & Financial Operations - Risk 3
We have not paid cash dividends in the past and we do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the capital appreciation, if any, of our common stock.We have not paid cash dividends on our common stock and we do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as our Board may consider relevant. In addition, our ability to pay dividends may be limited by covenants in any future outstanding indebtedness that we may incur. Since we do not intend to pay dividends, a stockholder's ability to receive a return on such stockholder's investment will depend on any future appreciation in the market value of the Company's common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our stockholders have purchased it.
Accounting & Financial Operations - Risk 4
If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, the Company's results of operations could be adversely affected.The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We will base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, as provided in "The Company Management's Discussion and Analysis of Financial Condition and Results of Operations?-?Critical Accounting Policies and Estimates." The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our financial statements include the treatment of research and development costs and in-process research and development. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.
Additionally, we will regularly monitor our compliance with applicable financial reporting standards and review new pronouncements and drafts thereof that are relevant to us. As a result of new standards, changes to existing standards and changes in their interpretation, we might be required to change our accounting policies, alter our operational policies, and implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or we may be required to restate our published financial statements. Such changes to existing standards or changes in their interpretation may have an adverse effect on our reputation, business, financial position, and profit.
Accounting & Financial Operations - Risk 5
We have a limited operating history upon which to evaluate our ability to successfully commercialize LYMPHIR and any future product candidate.We have one approved product candidate, LYMPHIR, while future product candidates, if any, resulting from our ongoing research with LYMPHIR for other possible indications, are and would be in the pre-clinical stage. As a result, our success is dependent upon our ability to commercialize LYMPHIR, which was launched in December 2025, and we, as a company, have not demonstrated an ability to perform the functions necessary for the approval or successful commercialization of any current or future product candidates. While various members of our executive management and key employees have significant prior experience in pharmaceutical development, as a company we have to date successfully completed only one late-stage clinical trial (much of which had been undertaken by Eisai prior to our in-licensing of the intellectual property for LYMPHIR) and we are undertaking commercialization activities for the first time for LYMPHIR. We have contracted with Innovation Partners, a large third-party commercial sales and marketing organization with an existing commercial infrastructure and product launch experience to assist in our commercial efforts related to LYMPHIR. We have distribution agreements with three national companies and an agreement with EVERSANA to support the launch and commercialization of LYMPHIR. Our success will depend upon our third-party sales and marketing infrastructure. If we are not successful in implementing our strategy to commercialize our product candidates, we may never achieve, maintain, or increase profitability.
Despite our progress with LYMPHIR, our operations have been limited primarily to business planning, research and development, and raising capital. These operations provide a limited basis for you to assess our ability to successfully commercialize our current or future product candidates and the advisability of investing in the securities.
Accounting & Financial Operations - Risk 6
We have a history of net losses and expect to incur losses for the foreseeable future. We may never generate revenues or, if we are able to generate revenues, achieve profitability.We were formed in August 2021 and began operations in April 2022 when Citius Pharma transferred the assets related to LYMPHIR to us, including the license agreement with Eisai and the asset purchase agreement with of Dr. Reddy's. Our ability to become profitable depends upon our ability to generate revenues from sales of LYMPHIR, and any future product candidates, if any, resulting from our ongoing research with LYMPHIR for other possible indications. We have been focused on product development and have not generated any revenues to date. We have incurred losses in each period of our operations, and we expect to continue to incur losses for the foreseeable future. These losses are likely to continue to adversely affect our working capital, total assets, and stockholders' equity. The process of developing product candidates requires significant clinical development, laboratory testing and clinical trials. In addition, commercialization of LYMPHIR and any future approved product candidates requires that we establish sales, marketing, and manufacturing capabilities, through internal hiring and contractual relationships with others. We expect to incur substantial losses for the foreseeable future as a result of the ongoing commercial launch of LYMPHIR, increases in our research and development costs, including costs associated with conducting preclinical testing and clinical trials for any other potential products, and regulatory compliance activities. We incurred a net loss of $24.7 million for the year ended September 30, 2025. At September 30, 2025, the Company had stockholders' equity of $44.9 million and an accumulated deficit of $64 million. The Company has received significant funding from Citius Pharma. Citius Pharma funded the Company with net cash used for our operating activities of approximately $8.9 million for the year ended September 30, 2025.
As of September 30, 2025, we have outstanding commitments totaling $38.4 million due to third-party suppliers and manufacturers, primarily related to the development and commercialization of LYMPHIR, and an aggregate of $22.7 million due under our license agreements, that, if left unpaid, could result in an interruption in the commercialization of LYMPHIR, breach of contract, loss of licensing rights or other events that would have a material adverse effect on our business and operations.
In addition, in connection with the closing of the Merger, Citius Pharma made a loan to the Company. The loan is evidenced by an unsecured promissory note issued by the Company, dated August 16, 2024, as amended September 10, 2025, in the principal amount of $3,800,111 to Citius Pharma. The promissory note bears no interest and is repayable in full upon the date at which the Company has closed a series of capital raises that in the aggregate provide gross proceeds of at least $30 million through the issuance of debt or equity securities or the royalty-backed monetization of LYMPHIR™. Through December 10, 2025, the Company has raised $18 million in capital raises and the likelihood of raising an additional $12 million to trigger the repayment obligation is uncertain at this time.
Our ability to generate revenues and achieve profitability will depend on numerous factors, including success in:
- commercializing LYMPHIR and any future product candidates that receive regulatory approval;- obtaining medical insurance coverage for LYMPHIR and any future product candidates;- manufacturing commercial quantities of LYMPHIR and any future product candidates at acceptable cost levels;- establishing a favorable competitive position for LYMPHIR and any future product candidates;- receiving regulatory approvals for any future product candidates; and - developing and testing future product candidates.
Many of these factors will depend on circumstances beyond the Company's control.
Accounting & Financial Operations - Risk 7
Our independent registered public accounting firm's report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.At September 30, 2025, we estimated that we have sufficient capital to continue our operations through March 2026, after taking into account the $6.0 million raised by Citius Pharma in October 2025 and the $18.0 million raised by us in December 2025. You should not rely on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to stockholders, in the event of liquidation.
The Company has generated no operating revenue to date and has principally raised capital through the issuance of equity instruments and funding through Citius Pharma to finance its operations. However, the Company's continued operations beyond March 2026 including, its continued commercialization of LYMPHIR, will depend on its ability to successfully launch LYMPHIR and generate substantial revenue from the sale of LYMPHIR and on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, or strategic relationships. However, the Company can provide no assurances on the commercialization or future sales of LYMPHIR, or that financing or strategic relationships will be available on acceptable terms, or at all. If the Company is unable to raise sufficient capital, find strategic partners or generate substantial revenue from the sale of LYMPHIR, there would be a material adverse effect on its business. Further, the Company expects in the future to incur additional expenses as it continues to develop any future product candidates, including seeking regulatory approval, and protecting its intellectual property.
Debt & Financing4 | 7.1%
Debt & Financing - Risk 1
We require substantial additional funding in the near future to support our operations, complete the commercialization of LYMPHIR, which may not be available on acceptable terms, or at all.Debt & Financing - Risk 2
The Loan Agreement is secured by a lien on substantially all of our assets, including our intellectual property, and the Lenders could foreclose on such assets upon an event of default.Added
Our obligations under the Loan Agreement are secured by a first-priority lien on substantially all of our assets, including our intellectual property, accounts receivable, inventory, equipment, and general intangibles. If an event of default occurs and is not cured within any applicable cure period, the Lenders would have the right to foreclose on the collateral securing our obligations.
The foreclosure on, or loss of, substantially all of our assets, including our intellectual property, could result in a complete loss of our ability to operate our business and would likely render us unable to continue as a going concern. Our intellectual property, including patents, trademarks, trade secrets, and proprietary technology, constitutes a critical component of our competitive position and revenue-generating capabilities. The loss of such assets to the Lenders in a foreclosure action would have a material adverse effect on our business and could result in a total loss of stockholder value.
Debt & Financing - Risk 3
Additional funding tranches under the Loan Agreement are conditioned upon the achievement of specified milestones, and there can be no assurance that such milestones will be achieved.Added
The availability of Tranche 2 and Tranche 3 under the Loan Agreement is conditioned upon our achievement of specified net revenue and liquidity milestones. If we fail to achieve the required milestones within the applicable time periods, Tranche 2 and/or Tranche 3 will not become available to us, and we will not have access to the additional committed capital contemplated by the Loan Agreement.
Our failure to access these additional tranches could significantly impair our ability to fund ongoing operations, pursue growth initiatives, or meet our working capital requirements. In such event, we may be required to seek alternative sources of financing, which may not be available on terms acceptable to us, or at all, or we may be required to curtail our operations or delay or abandon planned expenditures. Any of these outcomes could have a material adverse effect on our business, financial condition, results of operations, and prospects.
Debt & Financing - Risk 4
Our substantial indebtedness and debt service obligations could adversely affect our financial condition and our ability to fulfill our obligations under the Loan Agreement.Added
We have incurred significant indebtedness under the Loan Agreement, which features a tiered tranche structure with a floating interest rate subject to a floor of 12.75% per annum. During the interest-only period, we will not reduce the outstanding principal balance of the loan, and upon expiration of such period, we will be required to make amortizing payments of principal and interest. In addition, we are obligated to make a final payment of $1,062,500 at maturity, which creates a balloon-type obligation that we may be unable to satisfy from available cash flows or other sources. There can be no assurance that our business will generate sufficient cash flow from operations or that future borrowings or other sources of capital will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. If we are unable to generate sufficient cash flow to service our debt and meet our other obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital expenditures, or seek additional equity capital, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Corporate Activity and Growth4 | 7.1%
Corporate Activity and Growth - Risk 1
We expect to need to increase the size of our organization to further develop our product candidates, and we may experience difficulties in managing growth.Corporate Activity and Growth - Risk 2
Any termination, or breach by, or conflict with our strategic partners could harm our business.If we or any of our current or future collaborators fail to renew or terminate any of our collaboration or license agreements or if either party fails to satisfy its obligations under any of our collaboration or license agreements or complete them in a timely manner, we could have difficulty continuing marketing and sales efforts for LYMPHIR and the development and commercialization of any future product candidate and potentially lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition as well as volatility in any future revenue. In addition, the agreements with our collaborators may have provisions that give rise to disputes regarding the rights and obligations of the parties. These and other possible disagreements could lead to termination of the agreement or delays in collaborative research, development, supply, or commercialization of LYMPHIR and any future product candidate, or could require or result in litigation or arbitration. Any such conflicts with the collaborators could reduce our ability to obtain future collaboration agreements and could have a negative impact on our relationship with existing collaborators, adversely affecting our business and revenues. Finally, any of our collaborations may prove to be unsuccessful.
Under the license agreement for the intellectual property for LYMPHIR, 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. By breaching any of our covenants, including failure to make timely payments, we risk the loss of the license, which would have a material adverse effect on our business.
Corporate Activity and Growth - Risk 3
In the event we do not successfully complete a strategic transaction, should this be deemed necessary, our Board may decide to pursue a dissolution and liquidation of our Company. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.There can be no guarantee that the process to identify strategic transactions will result in successfully completed transactions when necessary. If additional transactions are not completed that enable us to successfully commercialize LYMPHIR and sustain our business operations, our Board may decide that it is in the best interest of our stockholders to dissolve our Company and liquidate our assets. In that event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation since the amount of cash available for distribution continues to decrease as we fund our operations and evaluate our strategic alternatives. In addition, if our Board were to approve and recommend, and our stockholders were to approve, a dissolution of our Company, we would be required under Delaware corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our stockholders. As a result of this requirement, a portion of our assets may need to be reserved pending the resolution of such obligations. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation of our Company. If a dissolution and liquidation were pursued, our Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of our common stock could lose all or a significant portion of their investment in the event of a dissolution, liquidation or winding up of our Company.
Corporate Activity and Growth - Risk 4
Our ongoing exploration of alternative strategic paths may not result in entering into or completing transactions, when necessary, and the process of reviewing alternative strategic paths or their conclusion could adversely affect our stock price.We continue to evaluate strategic paths to provide the resources necessary to successfully commercialize LYMPHIR and maximize stockholder value. Potential strategic paths may include partnerships, joint ventures, mergers, acquisitions, or licensing transactions, a combination of these, or other strategic transactions. There can be no assurance, however, that our evaluation will result in transactions or other alternatives, even when deemed necessary. There is no set timetable for our strategic process, and we do not intend to provide updates unless or until the Board approves a specific action or otherwise determines that disclosure is appropriate or necessary.
Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to third parties in a potential transaction with us on reasonable terms. The process of reviewing alternative strategic paths may be time consuming and may involve the dedication of significant resources and may require us to incur significant costs and expenses. It could negatively impact our ability to attract, retain and motivate employees, and expose us to potential litigation in connection with this process or any resulting transaction. If we are unable to effectively manage the process, our financial condition and results of operations could be adversely affected. In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of our Company could cause our stock price to fluctuate significantly. Further, any alternative strategic paths that may be pursued and completed ultimately may not deliver the anticipated benefits or enhance stockholder value. There can be no guarantee that the process of evaluating alternative strategic paths will result in our Company entering into or completing potential transactions within the anticipated timing or at all.
Tech & Innovation
Total Risks: 9/56 (16%)Below Sector Average
Innovation / R&D3 | 5.4%
Innovation / R&D - Risk 1
We have one approved product and have an unproven business strategy and may never achieve successful commercialization of LYMPHIR or any future product candidates or achieve or maintain profitability.Innovation / R&D - Risk 2
We face significant risks in our commercialization efforts of LYMPHIR and development of any future product candidate.Our business depends on the successful commercialization of LYMPHIR. We are not permitted to market any product candidate in the U.S. until we receive approval from the FDA, or in any foreign jurisdiction until we receive the requisite approvals from such jurisdiction. We received approval from the FDA for LYMPHIR in August 2024. The process of developing new drugs and/or therapeutic products is inherently complex, unpredictable, time-consuming, expensive and uncertain. We must make long-term investments and commit significant resources before knowing whether our development programs will result in products that will receive regulatory approval and achieve market acceptance. As an example, in response to the submission of our BLA for LYMPHIR, the FDA issued a CRL on July 28, 2023. The FDA required us to incorporate enhanced product testing and additional controls agreed to with the FDA during the market application review. There were no concerns relating to the safety and efficacy clinical data package submitted with the BLA, or the proposed prescribing information. In September 2023, we announced that the FDA had agreed with our plans to address the requirements outlined in the CRL, which guidance provided us with a path for completing the necessary activities to support the resubmission of the BLA for LYMPHIR and we received approval from the FDA in August 2024.
Product candidates that appear to be promising at some or all stages of development may not receive approval or reach the market for a number of reasons that may not be predictable based on results and data of the clinical program. Product candidates may be found ineffective or may cause harmful side effects during clinical trials, may take longer to progress through clinical trials than had been anticipated, may not be able to achieve the pre-defined clinical endpoints due to statistical anomalies even though clinical benefit may have been achieved, may fail to receive necessary regulatory approvals, may prove impracticable to manufacture in commercial quantities at reasonable cost and with acceptable quality, or may fail to achieve market acceptance.
In addition, we expect that it will take time for LYMPHIR to be accepted in the market, generate revenues and a return on investment. For example, while LYMPHIR received FDA approval in August 2024, we had incurred significant expenses in its development and planned commercialization prior to its launch in December 2025; as of September 30, 2025, we had outstanding commitments of approximately $38.4 million to third parties for LYMPHIR licensing, supply and other costs. We cannot, therefore, predict the timing of any future revenues from LYMPHIR or any other product candidate.
The FDA has substantial discretion in the drug approval process, including the ability to delay, limit or deny approval of our future product candidates, if any, for many reasons. For example, the FDA:
- may not find the data from clinical trials sufficient to support the submission of a BLA for our future product candidates or to obtain marketing approval in the U.S., including any findings that the clinical and other benefits of our future product candidates outweigh their safety risks;- could determine that the information provided by us is inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness of any of our future product candidates for any indication;- may disagree with the trial design or our interpretation of data from preclinical studies or clinical trials, or may change the requirements for approval even after the FDA has reviewed and commented on the design for the trials;- may identify deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for the manufacture of our future product candidates;- may approve our future product candidates for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical trials;- may change the FDA approval policies or adopt new regulations that could adversely impact our future product candidate development programs; or - may not approve the labeling claims that we believe are necessary or desirable for the successful commercialization of our future product candidates, or may require labeling claims that impair the potential market acceptance of our future product candidates.
These same risks are generally applicable to the regulatory process in foreign countries. Any failure to obtain regulatory approval of our future product candidates, if any, would significantly limit our ability to generate revenues, and any failure to obtain such approval for all of the indications and labeling claims we deem desirable could reduce our potential revenues.
Innovation / R&D - Risk 3
The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current and any future product candidates may not have favorable results in later studies or trials.Pre-clinical studies and Phase 1 and Phase 2 clinical trials are not primarily designed to test the efficacy of a product candidate in the general population, but rather to test initial safety, to study pharmacokinetics and pharmacodynamics, to study limited efficacy in a small number of study patients in a selected disease population, and to identify and attempt to understand the product candidate's side effects at various doses and dosing schedules. Success in pre-clinical studies or completed clinical trials does not ensure that later studies or trials, including continuing pre-clinical studies and large-scale clinical trials, will be successful nor does it predict future results. Favorable results in early studies or trials may not be repeated in later studies or trials, and product candidates in later stage trials may fail to show acceptable safety and efficacy despite having progressed through earlier trials. In addition, the placebo rate in larger studies may be higher than expected.
We may be required to demonstrate through large, long-term outcome trials that our future product candidates, if any, are safe and effective for use in a broad population prior to obtaining regulatory approval. This would increase the duration and cost of any such trial.
There is typically a high rate of attrition from the failure of product candidates proceeding through clinical trials. In addition, certain subjects in clinical trials may respond positively to placebo treatment – these subjects are commonly known as "placebo responders" – making it more difficult to demonstrate efficacy of the trial drug compared to placebo.
If any of our future product candidates fail to demonstrate sufficient safety and efficacy in any clinical trial, we will experience potentially significant delays and cost increases in, or may decide to abandon development of, that product candidate. If we abandon or are delayed, or experience increased costs in our development efforts related to any of our product candidates, we may not have sufficient resources to continue or complete development of that potential product candidate or any other product candidates. We may not be able to continue our operations and clinical studies, or generate any revenue or become profitable. Our reputation in the industry and in the investment community would likely be significantly damaged. Further, it might not be possible for us to raise funds in the public or private markets, and the stock price would likely decrease significantly.
Trade Secrets5 | 8.9%
Trade Secrets - Risk 1
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition and our business, financial condition and results of operations may be adversely affected.Trade Secrets - Risk 2
If we infringe the rights of third parties we might have to forego developing and/or selling any approved products, pay damages, or defend against litigation.If our product candidates, methods, processes, and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we might have to:
- obtain licenses, which might not be available on commercially reasonable terms, if at all;- abandon an infringing product candidate;- redesign our product candidates or processes to avoid infringement;- stop using the subject matter claimed in the patents held by others;- pay damages; and/or - defend litigation or administrative proceedings which might be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.
Any of these events could substantially harm our earnings, financial condition, and operations.
Trade Secrets - Risk 3
We rely on trade secret protections through confidentiality agreements with our employees and other parties, and the breach of these agreements could adversely affect our business and prospects.We rely on trade secrets, which we seek to protect, in part, through confidentiality and non-disclosure agreements with our employees, collaborators, suppliers, and other parties. There can be no assurance that these agreements will not be breached, that we would have adequate remedies for any such breach or that our trade secrets will not otherwise become known to or independently developed by our competitors. We might be involved from time to time in litigation to determine the enforceability, scope and validity of our proprietary rights. Any such litigation could result in substantial cost and divert management's attention from our operations.
Trade Secrets - Risk 4
Our business depends on protecting our intellectual property.Without the intellectual property rights we have already obtained, as well as the further rights we expect to pursue, our competitors would have opportunity to take advantage of our research and development efforts to develop competing products. Our success, competitive position, and future revenues, if any, depend in part on our ability and the abilities of our licensors to obtain and maintain patent protection for our product candidates, methods, processes and other technologies, to preserve our trade secrets, to prevent third parties from infringing on our proprietary rights and to operate without infringing the proprietary rights of third parties. We anticipate filing additional patent applications both in the U.S. and in other countries, as appropriate. However, the patent process is subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following:
- our patent rights might be challenged, invalidated, or circumvented, or otherwise might not provide any competitive advantage;- our competitors, many of which have substantially greater resources than we do and many of which might make significant investments in competing technologies, might seek, or might already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our product candidates either in the U.S. or in international markets;- countries other than the U.S. might have less restrictive patent laws than those upheld by U.S. courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products; and - as a matter of public policy regarding worldwide health concerns, there might be significant pressure on the U.S. government and other international governmental bodies to limit the scope of patent protection both inside and outside the U.S. for product candidates that prove successful.
In addition, the U.S. Patent and Trademark Office ("USPTO") and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and/or biotechnology-related inventions be limited or narrowed substantially to cover only the specific innovations exemplified in the patent application, thereby limiting the scope of protection against competitive challenges. Thus, even if we or our licensors are able to obtain patents, the patents might be substantially narrower than anticipated.
Because the time period from filing a patent application to the issuance, if ever, of the patent is often more than three years and because any regulatory approval and marketing for a pharmaceutical product often occurs several years after the related patent application is filed, the resulting market exclusivity afforded by any patent on drug candidates and technologies will likely be substantially less than 20 years. In the U.S., the European Union and some other jurisdictions, patent term extensions are available for certain delays in either patent office proceedings or marketing and regulatory approval processes. However, due to the specific requirements for obtaining these extensions, there is no assurance that our patents will be granted extensions even if we encounter significant delays in patent office proceedings or marketing and regulatory approval.
Additionally, patent law is subject to change and varies among the U.S. and foreign countries. Depending on decisions by the U.S. Congress, the U.S. federal courts, the USPTO or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors' abilities to obtain new patents or to enforce existing patents that we and our licensors or partners may obtain in the future.
Patent and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate. Our business and prospects will be harmed if these protections prove insufficient.
Trade Secrets - Risk 5
We are and may be required to make milestone payments to the licensor and former licensee of the LYMPHIR intellectual property in connection with our development and commercialization of LYMPHIR, which could adversely affect the profitability of LYMPHIR.Under the terms of the License Agreement with Eisai, we were required to pay Eisai a $5.9 million development milestone payment upon initial approval by the FDA of LYMPHIR for the CTCL indication, which occurred in August 2024, and an aggregate of up to $22 million related to the achievement of net product sales thresholds. Under the terms of the agreement with Dr. Reddy's, we are obligated to pay up to an aggregate of $40 million related to CTCL approvals in the U.S. and other markets, up to $70 million in development milestones for additional indications, and up to $300 million for commercial sales milestones. Further, under the agreement with Dr. Reddy's, we are required to (i) use commercially reasonable efforts to make commercially available products in the CTCL indication, peripheral T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator initiated immuno-oncology trials, (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) complete each specified immuno-oncology investigator trial on or before September 1, 2025, the four-year anniversary of the effective date of the definitive agreement. Additionally, we are required to commercially launch a product in a territory within six months of receiving regulatory approval for such product in each such jurisdiction; the launch of LYMPHIR in December 2025 satisfied this requirement in the U.S.
Pending further discussions with Dr. Reddy's, Dr. Reddy's agreed to a partial deferral without penalty of a milestone payment by Citius Oncology, which was triggered upon regulatory approval of LYMPHIR by the FDA and due on September 9, 2024, pursuant to the terms of the Asset Purchase Agreement. These development and milestone obligations impose substantial additional costs on us, and could divert resources from other aspects of our business and adversely affect the overall profitability of LYMPHIR. We need to obtain additional financing to satisfy these milestone payments, and cannot be sure that any additional funding will be available on terms favorable to us, or at all.
On March 28, 2025, Citius Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the milestone payment and certain unpaid invoices. We agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter on the 15th of each of the next four months to pay Eisai $2.35 million and make a final payment of $2,197,892 to Eisai on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment under the letter agreement at the rate of 2% per annum. During the year ended September 30, 2025, we recorded $218,032 in interest expense under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or related to our failure to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect. During the year ended September 30, 2025 we paid $3 million of the development milestone and the balance of $2.9 million is included in license fee payable at September 30, 2025. On July 21, 2025, we made a payment to Eisai of $1,616,522 for other invoices and accumulated interest associated with the letter agreement.
Cyber Security1 | 1.8%
Cyber Security - Risk 1
We are subject to information technology and cyber-security threats which could have an adverse effect on our business and results of operations.Legal & Regulatory
Total Risks: 5/56 (9%)Below Sector Average
Regulation3 | 5.4%
Regulation - Risk 1
We might not obtain the necessary U.S. or foreign regulatory approvals to commercialize any future product candidates.Regulation - Risk 2
Following the regulatory approval of LYMPHIR, we remain subject to ongoing regulatory obligations and restrictions, which may result in significant expense and limit our ability to commercialize LYMPHIR and any future approved products.Following the approval by the FDA of LYMPHIR in August 2024, we remain required to comply with extensive regulations for product manufacturing, labeling, packaging, adverse event reporting, storage, distribution, advertising, promotion and record keeping. Such regulatory approval is also subject to significant limitations on the indicated uses or marketing of the products or to whom and how we may distribute the approved product.
Manufacturers of pharmaceutical products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP regulations, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation. Similar regulatory programs exist in foreign jurisdictions. Further, regulatory agencies must approve these manufacturing facilities before they can be used to manufacture an approved product and these facilities are subject to ongoing regulatory inspections. In addition, regulatory agencies subject an approved pharmaceutical product, its manufacturer and the manufacturer's facilities to continual review and inspections. The subsequent discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, may result in restrictions on the marketing of that product, up to and including, withdrawal of the product from the market. If the manufacturing facilities of our suppliers fail to comply with applicable regulatory requirements, it could result in regulatory action and additional costs to us. Failure to comply with applicable FDA and other regulatory requirements may subject us to administrative or judicially imposed sanctions, either before or after product approval, if any.
In addition, the law or regulatory policies governing pharmaceutical products may change. New statutory requirements may be enacted or additional regulations may be enacted that could prevent or delay regulatory approval of our future product candidates. CMOs and their vendors or suppliers may also face changes in regulatory requirements from governmental agencies in the U.S. and other countries. We cannot predict the likelihood, nature, extent or effects of government regulation that may arise from future legislation or administrative action, either in the U.S. or elsewhere. If we are not able to maintain regulatory compliance, we might not be permitted to market any future approved products and our business could suffer.
Regulation - Risk 3
The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.If we are found to have improperly promoted any off-label use of LYMPHIR or for any product candidates, if approved, or if we are found to have improperly engaged in pre-approval promotion prior to the approval of such product candidates, we may become subject to significant liability. Such enforcement has become more common in the pharmaceutical industry. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as LYMPHIR and any product candidates that might be approved. In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product's approved labeling. If we receive marketing approval for our product candidates for the proposed indications, physicians may nevertheless use the product for their patients in a manner that is inconsistent with the approved label, if the physicians believe in their professional medical judgment, it could be used in such manner. However, if we are found to have promoted a product for any off-label uses, the federal government could levy civil, criminal and/or administrative penalties, and seek fines against us. The FDA, Department of Justice or other regulatory authorities could also request that we enter into a consent decree or a corporate integrity agreement, or seek a permanent injunction against us under which specified promotional conduct is monitored, changed or curtailed. If we cannot successfully manage the promotion of LYMPHIR or any product candidates that receive approval, we could become subject to significant liability, which would materially adversely affect our business, financial condition and results of operations.
Litigation & Legal Liabilities2 | 3.6%
Litigation & Legal Liabilities - Risk 1
A material breach or default under any of our license agreements, including failure to make timely payments when due, gives the licensor party to such agreement the right to terminate the license agreement, which termination would materially harm our business.Litigation & Legal Liabilities - Risk 2
We could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful.The use of any of our product candidates in pre-clinical and clinical trials, and the sale of any approved products, may expose us to liability claims and financial losses resulting from the use or sale of our product candidates, namely LYMPHIR. We have obtained limited product liability insurance coverage for our pre-clinical and clinical trials of $5 million per occurrence and in the aggregate, subject to a deductible of $25,000 per bodily injury and property damage occurrence, and a medical expense per person limit of $25,000. We intend to obtain similar product liability insurance coverage for LYMPHIR. There can be no assurance that our existing insurance coverage will extend to any other product candidates in the future. Any product liability insurance coverage may not be sufficient to satisfy all liabilities resulting from product liability claims. A successful claim may prevent us from obtaining adequate product liability insurance in the future on commercially desirable terms, if at all. Even if a claim is not successful, defending such a claim would be time consuming and expensive, may damage that product's and our reputations in the marketplace, and would likely divert management's attention, any of which could have a material adverse effect on us.
Ability to Sell
Total Risks: 5/56 (9%)Above Sector Average
Competition1 | 1.8%
Competition - Risk 1
The markets in which we operate are highly competitive and we might be unable to compete successfully against new entrants or established companies.Demand1 | 1.8%
Demand - Risk 1
Our projections regarding the market opportunity for our LYMPHIR may not be accurate, and the actual market for LYMPHIR may be smaller than we estimate.Sales & Marketing3 | 5.4%
Sales & Marketing - Risk 1
We will not be able to create a market for LYMPHIR or any future product candidate if we fail to establish marketing, sales, and distribution capabilities.Sales & Marketing - Risk 2
LYMPHIR may not gain market acceptance among physicians, patients, healthcare payers or the medical community and may not generate significant revenue.LYMPHIR may not gain market acceptance among physicians, patients, healthcare payers or the medical community. Coverage and reimbursement of our product candidates by third-party payers, including government payers, generally is also necessary for commercial success. We believe that the degree of market acceptance and our ability to generate revenues from any approved product candidate or acquired approved product will depend on a number of factors, including:
- strength of sales, marketing and distribution support;- perceptions by members of the health care community, including physicians, about the safety and effectiveness of LYMPHIR;- perceptions by members of the health care community, including physicians, about the use of LYMPHIR versus the respective standards of care or other alternatives for the disease or problem that we seek to address with LYMPHIR;- results of any post-approval studies of the product;- availability of coverage and reimbursement from government and other third-party payers;- the willingness of patients to pay out of pocket in the absence of government or third-party coverage;- the relative convenience and ease of administration and dosing schedule;- product labeling or product insert requirements of the FDA or other regulatory authorities;- prevalence and severity of any side effects;- price of any future products, if approved, both in absolute terms and relative to alternative treatments;- the effectiveness of our or any future collaborators' sales and marketing strategies;- patient access programs that require patients to provide certain information prior to receiving new and refill prescriptions; and - requirements for prescribing physicians to complete certain educational programs for prescribing drugs.
We expect sales of LYMPHIR to generate substantially all of our revenues for the foreseeable future, and as a result, the failure of LYMPHIR to find market acceptance would harm our business and would require us to seek additional financing. In addition, our efforts to educate the medical community and third-party payers on the benefits of LYMPHIR may require significant resources and may never be successful. These risks also apply to any future approved product candidate.
Sales & Marketing - Risk 3
Our ability to generate product revenues will be diminished if LYMPHIR, or any of our future product candidates that may be approved, sells for inadequate prices or patients are unable to obtain adequate levels of reimbursement.Our ability to commercialize our approved product candidates, namely LYMPHIR, alone or with collaborators, will depend in part on the extent to which reimbursement will be available from:
- government and health administration authorities;- private health maintenance organizations (HMOs) and health insurers; and - other healthcare payers.
Significant uncertainty exists as to the reimbursement status of newly approved healthcare products. Healthcare payers, including Medicare, are challenging the prices charged for medical products and services. Government and other healthcare payers increasingly attempt to contain healthcare costs by limiting both coverage and the level of reimbursement for drugs. Even if our product candidates are approved by the FDA, insurance coverage might not be available, and reimbursement levels might be inadequate, to cover our products. If government and other healthcare payers do not provide adequate coverage and reimbursement levels for LYMPHIR, or any of our future product candidates that may be approved, market acceptance of such products could be reduced. We cannot predict whether federal or state legislation will be passed that may impact reimbursement policies nor what the impact of any such legislation would be on the healthcare industry in general or on our business specifically.
We are actively engaged with CMS in order to obtain the necessary coverage to facilitate reimbursement for LYMPHIR. However, we can offer no assurance as to any reimbursement coverage. In February, CMS assigned LYMPHIR a unique, permanent Healthcare Common Procedure Coding System J-code, which is expected to provide coding clarity for physicians and facilities who administer LYMPHIR, thereby facilitating reimbursement. This achievement is a key step in ensuring that LYMPHIR is accessible to patients with commercial and government insurance (VA, DoD, Medicare) coverage.
Health administration authorities in countries other than the U.S. may not provide reimbursement for our products at rates sufficient for us to achieve profitability, or at all. Like the U.S., these countries have considered health care reform proposals and could materially alter their government-sponsored health care programs by reducing reimbursement rates. Any reduction in reimbursement rates under Medicare or foreign health care programs could negatively affect the pricing of our approved product candidates. If we are not able to charge a sufficient amount for an approved product candidate, then our margins and our profitability will be adversely affected.
Production
Total Risks: 3/56 (5%)Below Sector Average
Employment / Personnel2 | 3.6%
Employment / Personnel - Risk 1
If we are unable to retain or hire additional qualified personnel, our ability to grow our business might be harmed.Employment / Personnel - Risk 2
We rely on the significant experience and specialized expertise of our executive management and other key personnel and the loss of any of our executive management or key personnel or our inability to successfully hire their successors could harm our business.The Company's performance is substantially dependent on the continued services and on the performance of our executive management and other key personnel through the A&R Shared Services Agreement with Citius Pharma, all who have extensive experience and specialized expertise in our business. Our Chief Executive Officer, Leonard Mazur, our Secretary and Director, Myron Holubiak, our Chief Financial Officer and Chief Business Officer, Jaime Bartushak, and our Chief Medical Officer, Myron Czuczman, in particular have significant experience in the running of pharmaceutical companies and/or drug development itself. This depth of experience is of significant benefit to us, especially given the small size of our management team and company. The loss of the services of any of Mr. Mazur, Mr. Holubiak, Mr. Bartushak or Dr. Czuczman, as well as any other member of our executive management or any key employees could harm our ability to attract capital, commercialize LYMPHIR and develop any future product candidates. We do not have key man life insurance policies.
Supply Chain1 | 1.8%
Supply Chain - Risk 1
We rely exclusively on third parties to formulate and manufacture our product candidates. Our failure to abide by our contractual obligations with these third parties, including timely payment, could result in a delay or the loss of necessary third-party support.Macro & Political
Total Risks: 1/56 (2%)Below Sector Average
Economy & Political Environment1 | 1.8%
Economy & Political Environment - Risk 1
Healthcare reform measures could hinder or prevent LYMPHIR's commercial success, or any of our future product candidates that may be approved.See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.