CITIUS ONCOLOGY, INC.

Previous wording

The following discussion and analysis of our financial condition and results of operations for the three and six months ended March 31, 2026 and 2025 should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Report and in conjunction with the audited financial statements of Citius Oncology, Inc. included in our Annual Report on Form 10-K for the year ended September 30, 2025, filed with the SEC on December 23, 2025. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements” on page iii of this Report.

Current wording

The following discussion and analysis of our financial condition and results of operations for the three and nine months ended June 30, 2026 and 2025 should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Report and in conjunction with the audited financial statements of Citius Oncology, Inc. included in our Annual Report on Form 10-K for the year ended September 30, 2025, filed with the SEC on December 23, 2025. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements” on page iii of this Report.

Previous wording

At the time of the FDA approval for LYMPHIR, a $27.5 million milestone payment became payable to Dr. Reddy’s under the terms of the asset purchase agreement for which a balance of $17.65 million remains due as of March 31, 2026. Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.

Current wording

At the time of the FDA approval for LYMPHIR, a $27.5 million milestone payment became payable to Dr. Reddy’s under the terms of the asset purchase agreement for which a balance of $15.65 million remains due as of June 30, 2026. Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.

Previous wording

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 $2,535,318 on July 15, 2025, $2,350,000 on the 15 th of each of the subsequent four months, and make a final payment of $2,197,892 on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of payment at the rate of 2% per annum. During the six months ended March 31, 2026, we recorded $78,872 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. On December 15, 2025, we paid Eisai the balance of the outstanding milestone approval fee and accumulated interest on the license fee. At March 31, 2026, we owe Eisai approximately $6.3 million for certain other unpaid invoices.

Current wording

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 $2,535,318 on July 15, 2025, $2,350,000 on the 15 th of each of the subsequent four months, and make a final payment of $2,197,892 on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of payment at the rate of 2% per annum. During the nine months ended June 30, 2026, we recorded $112,270 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. On December 15, 2025, we paid Eisai the balance of the outstanding milestone approval fee and accumulated interest on the license fee. At June 30, 2026, we owe Eisai approximately $6.3 million for certain other unpaid invoices.

Previous wording

Product revenues for the three months ended March 31, 2026 were $1,667,298, as we began commercial distribution of LYMPHIR in December 2025. Gross profit on product revenues for the three months ended March 31, 2026 was approximately 80%.

Current wording

Product revenues for the three months ended June 30, 2026 were $1,493,788, as we began commercial distribution of LYMPHIR in December 2025. Gross profit on product revenues for the three months ended June 30, 2026 was approximately 67%.

Previous wording

For the three months ended March 31, 2026, research and development expenses were $1,079,354, as compared to $3,139,413 for the three months ended March 31, 2025. The decrease of $2,060,059 was primarily related to expense recognized in the three months ended March 31, 2025 for a pre-license inspection batch Lymphir previously manufactured.

Current wording

For the three months ended June 30, 2026, research and development expenses were $218,496, as compared to $938,277 for the three months ended June 30, 2025. The decrease of $719,781 was primarily related to lower regulatory expenses recognized in the three months ended June 30, 2026, related to a refund of FDA PDUFA fees as well as a lower allocation of internal expense as both investigator-initiated trials have been completed.

Previous wording

For the three months ended March 31, 2026, stock-based compensation expense was $3,526,710, as compared to $2,088,572 for the three months ended March 31, 2025. The increase of $1,438,138 in stock-based compensation expense was primarily related to the restricted stock unit awards granted in September 2025.

Current wording

For the three months ended June 30, 2026, stock-based compensation expense was $3,560,791, as compared to $2,125,237 for the three months ended June 30, 2025. The increase of $1,435,554 in stock-based compensation expense was primarily related to the restricted stock units granted in September 2025.

Previous wording

For the three months ended March 31, 2026, interest income was $43,721, as compared to $0 for the three months ended March 31, 2025. We have invested some of the proceeds of our recent equity offerings in a money market account.

Current wording

For the three months ended June 30, 2026, interest income was $96,848, as compared to $0 for the three months ended June 30, 2025. We have invested some of the proceeds of our recent equity offerings in a money market account.

Previous wording

For the three months ended March 31, 2026, interest expense was $33,031, as compared to $0 for the three months ended March 31, 2025. Interest expense was related to the March 28, 2025 letter agreement with Eisai.

Current wording

For the three months ended June 30, 2026, interest expense was $231,732, as compared to $160,755 for the three months ended June 30, 2025, primarily related to our new loan agreement.

Previous wording

The Company recorded a deferred income tax benefit of $231,210 in the three months ended March 31, 2026 and a deferred income tax expense of 264,240 in the three months ended March 31, 2025. Deferred income tax expense or benefit is related to the difference in amortization for taxable purposes of our in-process research and development asset and the financial statement amortization.

Current wording

The Company recorded a deferred income tax benefit of $107,347 in the three months ended June 30, 2026 and a deferred income tax expense of $264,240 in the three months ended June 30, 2025. Deferred income tax expense or benefit is related to the difference in amortization for taxable purposes of our in-process research and development asset and the financial statement amortization.

Previous wording

For the six months ended March 31, 2026, we incurred a net loss of $32,143,764, as compared to a net loss of $14,394,757 for the six months ended March 31, 2025. The increase of $17,749,007 in net loss was due to the increase of $24,492,917 in operating expenses offset by the increase in gross profit of $4,493,323, the increase in other income of $1,755,137 and the decrease in income tax expense of $495,450.

Current wording

For the three months ended June 30, 2026, we incurred a net loss of $8,923,846, as compared to a net loss of $5,369,956 for the three months ended June 30, 2025. The increase of $3,553,890 in the net loss was primarily due to the increase of $4,773,801 in operating expenses offset by the increase in gross profit of $1,001,945.

Previous wording

Six months ended March 31, 2026 compared with the Six months ended March 31, 2025

Current wording

Nine months ended June 30, 2026 compared with the Nine months ended June 30, 2025

Previous wording

Product revenues for the six months ended March 31, 2026 were $5,611,409, as we began commercial distribution of LYMPHIR in December 2025. Gross profit on product revenues for the six months ended March 31, 2026 was approximately 80%.

Current wording

Product revenues for the nine months ended June 30, 2026 were $7,105,197, as we began commercial distribution of LYMPHIR in December 2025. Gross profit on product revenues for the nine months ended June 30, 2026 was approximately 77%.

Previous wording

For the six months ended March 31, 2026, research and development expenses were $2,097,706, as compared to $4,403,921 for the six months ended March 31, 2025. The decrease of $2,306,215 was primarily related to was primarily related to expense recognized in the three months ended March 31, 2025 for a pre-license inspection batch of LYMPHIR previously manufactured.

Current wording

For the nine months ended June 30, 2026, research and development expenses were $2,316,202, as compared to $5,342,198 for the nine months ended June 30, 2025. The decrease of $3,025,996 was primarily related to additional expense recognized in the nine months ended June 30, 2025 for a pre-license inspection batch of LYMPHIR and lower regulatory expenses for the refund of FDA PDUFA fees recognized in the nine months ended June 30, 2026, as well as lower internal allocation of expense as both investigator-initiated trials have been completed.

Previous wording

Amortization of in-process research and development commenced upon revenue generation in December 2025. For the six months ended March 31, 2026, amortization was $2,293,750. In-process research and development is being amortized on a straight-line basis over the remaining FDA product exclusivity period, which ends in August 2036.

Current wording

Amortization of in-process research and development commenced upon revenue generation in December 2025. For the nine months ended June 30, 2026, amortization was $4,014,062. In-process research and development is being amortized on a straight-line basis over the remaining FDA product exclusivity period, which ends in August 2036.

Previous wording

For the three months ended March 31, 2026, general and administrative expenses were $23,625,639, as compared to $2,243,327 for the three months ended March 31, 2025. The increase of $21,382,312 was primarily related to a notice of termination from a contract manufacturing organization received in February 2026. In March 2026, we recorded a contract cancellation fee of $19,733,307.

Current wording

For the nine months ended June 30, 2026, general and administrative expenses were $30,704,141, as compared to $7,446,753 for the nine months ended June 30, 2025. The increase of $23,257,388 was primarily related to a notice of termination from a contract manufacturing organization received in February 2026. In March 2026, we recorded a contract cancellation fee of $19,733,307.

Previous wording

For the six months ended March 31, 2026, stock-based compensation expense was $7,482,760, as compared to $3,897,050 for the six months ended March 31, 2025. The increase of $3,585,710 in stock-based compensation expense was primarily related to the restricted stock unit awards granted in September 2025.

Current wording

For the nine months ended June 30, 2026, stock-based compensation expense was $11,043,551, as compared to $6,022,287 for the nine months ended June 30, 2025. The increase of $5,021,264 in stock-based compensation expense was primarily related to the restricted stock units granted in September 2025.

Previous wording

For the six months ended March 31, 2026, interest income was $72,009, as compared to $0 for the six months ended March 31, 2025. We have invested some of the proceeds of our recent equity offerings in a money market account.

Current wording

For the nine months ended June 30, 2026, interest income was $168,857, as compared to $0 for the nine months ended June 30, 2025. We have invested some of the proceeds of our recent equity offerings in a money market account.

Previous wording

We recognized a gain of $1,762,000 for the three months ended March 31, 2026, in connection with the sale of certain New Jersey income tax net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

Current wording

We recognized a gain of $1,762,000 for the nine months ended June 30, 2026, in connection with the sale of certain New Jersey income tax net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

Previous wording

For the six months ended March 31, 2026, interest expense was $78,872, as compared to $0 for the six months ended March 31, 2025. Interest expense was related to the March 28, 2025 letter agreement with Eisai.

Current wording

For the nine months ended June 30, 2026, interest expense was $310,604, as compared to $160,755 for the nine months ended June 30, 2025, primarily related to our new loan agreement.

Previous wording

The Company recorded a deferred income tax expense of $33,030 for the six months ended March 31, 2026 and a deferred income tax expense of $528,480 for the six months ended March 31, 2025. Deferred income tax expense or benefit is related to the difference in amortization for taxable purposes of our in-process research and development asset and the financial statement amortization.

Current wording

The Company recorded a deferred income tax benefit of $74,317 for the nine months ended June 30, 2026 and a deferred income tax expense of $792,720 for the nine months ended June 30, 2025. Deferred income tax expense or benefit is related to the difference in amortization for taxable purposes of our in-process research and development asset and the financial statement amortization.

Previous wording

For the three months ended March 31, 2026, we incurred a net loss of $26,609,695, as compared to a net loss of $7,735,552 for the three months ended March 31, 2025. The increase of $18,874,143 in net loss was due to the increase of $22,480,703 in operating expenses offset by the increase in gross profit of $1,338,420, the increase in other income of $1,772,690 and the decrease in income tax expense of $495,450.

Current wording

For the nine months ended June 30, 2026, we incurred a net loss of $41,067,610, as compared to a net loss of $19,764,713 for the nine months ended June 30, 2025. The increase of $21,302,897 in net loss was due to the increase of $29,266,718 in operating expenses offset by the increase in gross profit of $5,495,268, the increase in other income of $1,601,516 and the decrease in income tax expense of $867,037.

Previous wording

Citius Oncology has incurred operating losses since inception and incurred a net loss of $32,143,764 for the six months ended March 31, 2026. At March 31, 2026, we had an accumulated deficit of $131.4 million. The Company has had limited revenue commencing in December 2025 and has historically relied on funding from Citius Pharma to finance our operations. At March 31, 2026, we had accrued expenses related to LYMPHIR of $XXXXX and other accrued expenses of $YYY. At March 31, 2026, we had $2,632,634 in cash and a negative working capital of approximately $29.4 million.

Current wording

Citius Oncology has incurred operating losses since inception and incurred a net loss of $41,067,610 for the nine months ended June 30, 2026. At June 30, 2026, we had an accumulated deficit of $105.1 million. The Company has had limited revenue commencing in December 2025 and had historically relied on funding from Citius Pharma to finance our operations. At June 30, 2026, we had $16.6 million in cash and a negative working capital of approximately $16.1 million.

Previous wording

On May 5, 2026, Citius Oncology received gross proceeds of approximately $11.5 million from the exercise of certain warrants.

Current wording

On May 5, 2026, Citius Oncology received net proceeds of approximately $9.7 million from the exercise of certain warrants.

Previous wording

In addition, the Company entered into a loan agreement for up to $25.0 million, with $10.0 million funded on May 6, 2026, up to $7.0 million available on the later of (A) the date on which certain net revenue and liquidity milestones are achieved and (B) October 1, 2026, and continuing through December 31, 2026, and up to $8.0 million available beginning on the later of (A) the date on which certain additional net revenue milestones are achieved and (B) January 1, 2027, and continuing through March 31, 2027. The loans bear interest at the greater of the prime rate plus 6% or 12.75%. The loans are secured by an interest in all of the Company’s assets, including intellectual property, subject to agreed exceptions. The maturity date of the loans is November 1, 2029.

Current wording

On May 5, 2026 the Company, entered into a term loan agreement with two lenders (the “Lenders”) for up to $25.0 million (the “Loan Agreement”), with $10.0 million funded on May 6, 2026, up to $7.0 million available between October 1 and December 31, 2026, if certain net revenue and liquidity milestones are achieved (“Tranche 2”), and up to $8.0 million available between January 1 and March 31, 2027, if certain additional net revenue milestones are achieved and a loan was drawn between October 1 and December 31, 2026 (“Tranche 3”). The loans bear interest at the greater of the prime rate plus 6% or 12.75%. The loans are secured by all of the Company’s assets, subject to agreed exceptions. The maturity date of the loans is November 1, 2029.

Previous wording

During the six months ended March 31, 2026, we paid the final $2,900,000 due to Eisai in connection with the LYMPHIR approval milestone and paid $2,100,000 in connection with the milestone payment due to Dr. Reddy’s. At March 31, 2026, we owe Dr. Reddy’s $17,650,000 representing the balance of the approval milestone.

Current wording

During the nine months ended June 30, 2026, we paid the final $2,900,000 due to Eisai in connection with the LYMPHIR approval milestone and paid $4,100,000 in connection with the milestone payment due to Dr. Reddy’s. At June 30, 2026, we owe Dr. Reddy’s $15,650,000 representing the balance of the approval milestone.