Citius Oncology announces up to $36.5 million in loan and warrant financing

Citius Oncology, Inc. (Nasdaq: CTOR) announced in a pricing press release dated May 5, 2026, filed as an exhibit to a Form 8-K, two financings totaling up to $36.5 million. The company describes them as support for the commercial launch of LYMPHIR, its approved lymphoma drug.

The loan and its conditions

The first financing is a senior secured term loan credit facility with Avenue Venture Opportunities Fund II, L.P., a fund of Avenue Capital Group. It provides up to $25 million over a term of 3.5 years. An initial tranche of $10 million is to be fully funded at closing. Two further tranches, up to an aggregate $15 million, depend on predefined revenue milestones and liquidity conditions. The release describes Avenue Capital Group as a New York-headquartered investment firm founded in 1995 that manages assets of approximately $9.8 billion.

The company agreed to issue Avenue warrants for up to 11,111,111 shares at $0.90 per share, exercisable for five years after stockholder approval takes effect. It will also issue warrants equal to 10% of each later tranche funded, divided by $0.90. Avenue may convert up to $4.0 million of loan principal into common stock at 120% of the warrant exercise price, subject to beneficial ownership limits.

H.C. Wainwright & Co. is the exclusive origination, structuring and placement agent for both financings. The release names no counsel for either side and no administrative or collateral agent for the loan.

The warrant exercise

A single healthcare-focused institutional investor agreed to exercise warrants for up to 12,777,778 shares immediately, at a reduced exercise price of $0.90. Those warrants were issued in July 2025, September 2025 and December 2025. Expected gross proceeds are approximately $11.5 million before placement agent fees and other expenses.

In exchange, the company will issue unregistered warrants for up to 25,555,556 shares at $0.90, exercisable after stockholder approval. It also agreed to cut the exercise price of warrants for up to 15,697,024 shares, issued to the same investor in December 2025, from $1.09 to $0.90. The company must file a resale registration statement for the shares underlying the new warrants. The new warrant offering is expected to close on or about May 6, 2026.

Where the company stands

The annual report for the fiscal year ended September 30, 2025, filed December 23, 2025, puts the net loss at $24.8 million for that year, up from $21.1 million the year before. Research and development expense was $6.4 million, against $4.9 million. Cash used in operations was $5.5 million in fiscal 2025.

The same annual report says that as of December 17, 2025, Citius Pharmaceuticals owned about 77.9% of the company, after a transaction that closed on December 11, 2025 and excluded pre-funded warrants for up to 15,229,358 shares. Citius Pharma owned about 92% after the 2024 merger. The parent has funded the company since 2021, and it continues to do so.

LYMPHIR was approved by the FDA in August 2024 and launched in December 2025. The annual report estimates the market for the drug exceeds $400 million, a figure the company presents as its own belief.

Chief Executive Leonard Mazur said the facility is "aligning capital access with commercial performance." The later tranches, however, depend on revenue and liquidity conditions that the release does not spell out.

What the release leaves out

The release gives no cash balance for the quarter or for year-end 2025, and no net proceeds figure after fees. It does not say when the stockholder vote will be held, which controls when the new and amended warrants can be exercised. It also does not say which revenue milestones trigger the later $15 million.

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