Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Jun. 30, 2017
Notes to Financial Statements  

On July 27, 2017, the Company was notified by NASDAQ that its application to list its common stock and warrants on the NASDAQ Exchange was approved.


From July 1, 2017 through August 2, 2017 the Company received advances of $300,000 against the June 23, 2017 future advance convertible promissory note. Advances against this note totaled $710,000 as of August 2, 2017.


On August 8, 2017, Leonard Mazur converted $4,710,000 (which have a carrying value of $5,543,333) of outstanding convertible promissory notes and accrued interest of $76,240 into 1,547,067 shares of common stock at a conversion price per share of $3.09.


As a result of this conversion during the period ending September 30, 2017, the Company will record a beneficial conversion feature expense of $762,078, which is a result of the value of the purchased shares of $6,381,651, (1,547,067 shares at the public offering price of $4.125), netted against the carrying value and accrued interest of the notes, $5,619,573. (See Note 4.)


On August 8, 2017, the Company closed an underwritten public offering of 1,648,484 shares of common stock and warrants to purchase 1,648,484 shares of common stock at an offering price of $4.125 per share and $0.01 per warrant. The warrants have a per share exercise price of $4.125, are exercisable immediately and will expire five years from the date of issuance. The gross proceeds to Citius from this offering were approximately $6,800,000, before deducting underwriting discounts and commissions and other estimated offering expenses. The Company granted the underwriters a 45-day option to purchase up to an additional 247,272 shares of common stock and warrants to purchase 247,272 shares of common stock to cover over-allotments, if any. On August 8, 2017, the underwriters partially exercised the over-allotment to purchase an additional 247,272 warrants.


In connection with the Investor Release Agreements (see Note 6 – Private Offerings) dated June 8, 2017, the Company will issue 58,183 shares of common stock to investors that participated in the 2016 Offering. The shares of common stock are being issued to effectively reprice the sale of Units in the 2016 Offering from $6.00 per Unit to $4.125 per Unit, the price per share of common stock in our recently completed underwritten public offering. In addition, the exercise price of the warrants included in the Units will be repriced from $8.25 per warrant to $4.125 per warrant.