UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check the Appropriate Box:
☐ | Preliminary
Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) |
☒ | Definitive
Proxy Statement |
☐ | Definitive
Additional Materials |
☐ | Soliciting Material Under Rule 14a-12 |
Citius Pharmaceuticals, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☐ | Fee
paid previously with preliminary materials: |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange
Act Rules 14a-6(i)(1) and 0-11. |
Citius Pharmaceuticals, Inc.
11 Commerce Drive, First Floor
Cranford, NJ 07016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on March 12, 2024
Dear Stockholder:
You are cordially invited to attend the Annual
Meeting of Stockholders of Citius Pharmaceuticals, Inc. The meeting will be held on Tuesday, March 12, 2024 at 8:00 a.m. (Eastern time)
at the Company’s headquarters at 11 Commerce Drive, First Floor, Cranford, New Jersey 07016, for the following purposes:
| 1. | To elect seven directors to serve until the 2025 Annual Meeting of Stockholders and until their successors are duly elected and qualified; |
| 2. | To ratify the selection of Wolf & Company, P.C., an independent registered public accounting firm, as the auditor of the Company
for the year ending September 30, 2024; and |
| 3. | To transact such other business as may properly come before the meeting or any adjournment thereof. |
The record date for the Annual Meeting is January 19, 2024. Only stockholders
of record at the close of business on that date may vote at the meeting or any adjournment thereof.
|
By Order of the Board of Directors |
|
|
|
/s/ Leonard Mazur |
|
Director, Chief Executive Officer and Chairman |
You are required to register in advance of the Annual Meeting if you
plan to attend the Annual Meeting in person. If you wish to register in advance of the Annual Meeting, please contact Jaime Bartushak
by no later than March 5, 2024, by e-mail (jbartushak@citiuspharma.com), telephone (908-967-6677 x103) or U.S. mail at 11 Commerce Drive,
First Floor, Cranford, New Jersey 07016.
You are cordially invited to attend the meeting in person. However,
to assure your representation at the Annual Meeting, you are urged to vote by proxy by following the instructions contained in the accompanying
proxy statement. You may revoke your proxy in the manner described in the proxy statement at any time before it has been voted at the
Annual Meeting. Any stockholder attending the Annual Meeting may vote in person even if he or she has returned a proxy. Please note, however,
that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy
issued in your name from that record holder. Your vote is important, no matter how many shares you owned on the record date. Whether or
not you plan to attend the Annual Meeting, we hope that you will vote as soon as possible.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING TO BE HELD ON MARCH 12, 2024.
Our proxy statement and Annual Report on Form 10-K for the year ended
September 30, 2023 are available at https://www.proxyvote.com.
We are pleased to take advantage of the Securities and Exchange Commission,
or SEC, rules that allow us to furnish proxy materials, including this notice, and the proxy statement (including an electronic proxy
card for the meeting) for the Annual Meeting via the Internet. Taking advantage of these rules allows us to lower the cost of delivering
annual meeting materials to our stockholders and reduce the environmental impact of printing and mailing these materials.
Citius Pharmaceuticals, Inc.
11 Commerce Drive, First Floor
Cranford, NJ 07016
PROXY STATEMENT
FOR 2024 ANNUAL MEETING OF STOCKHOLDERS
MARCH 12, 2024
This proxy statement is furnished to stockholders
in connection with the solicitation of proxies by the Board of Directors of Citius Pharmaceuticals, Inc. (“Citius”, the “Company”,
“we”, “our”, or “us”) in connection with the 2024 Annual Meeting of stockholders of the Company to
be held on Tuesday, March 12, 2024 at 8:00 a.m. (Eastern time) at the Company’s headquarters located at 11 Commerce Drive, First
Floor, Cranford, New Jersey 07016 (the “Annual Meeting”).
In accordance with the rules of the SEC, instead
of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing proxy materials, including the notice
of meeting, this proxy statement, and a proxy card for the meeting, by providing access to them on the Internet to save printing costs
and benefit the environment. These materials were first available on the Internet on or about January 26, 2024. We mailed a Notice of
Internet Availability of Proxy Materials on or about January 26, 2024 to our stockholders of record and beneficial owners as of January
19, 2024, the record date for the meeting. This proxy statement and the Notice of Internet Availability of Proxy Materials contain instructions
for accessing and reviewing our proxy materials on the Internet and for voting by proxy over the Internet. You will need to obtain your
own Internet access if you choose to access the proxy materials and/or vote over the Internet. If you prefer to receive printed copies
of our proxy materials, the Notice of Internet Availability of Proxy Materials contains instructions on how to request the materials by
mail. You will not receive printed copies of the proxy materials unless you request them. If you elect to receive the materials by mail,
you may also vote by proxy on the proxy card or voter instruction card that you will receive in response to your request. The proxy materials
and the accompanying Annual Report on Form 10-K are available at https://www.proxyvote.com.
To ensure an orderly meeting, you are required
to register in advance of the Annual Meeting if you plan to attend the Annual Meeting in person. If you wish to register in advance of
the Annual Meeting, please contact Jaime Bartushak no later than March 5, 2024 by email (jbartushak@citiuspharma.com), telephone (908-967-6677
x103) or U.S. mail at 11 Commerce Drive, First Floor, Cranford, New Jersey 07016.
VOTING SECURITIES
The close of business on January 19, 2024 has been
fixed as the record date for determination of the stockholders entitled to notice of, and to vote at, the Annual Meeting. On that date
there were outstanding and entitled to vote 158,966,576 shares of common stock, each of which is entitled to one vote on each matter at
the Annual Meeting.
Pursuant to the Company’s bylaws, the vote
of a majority of shares of common stock either present in person or represented by proxy and entitled to vote will be required to (i)
elect directors, and (ii) ratify the selection of the independent auditors for the fiscal year ending September 30, 2024.
The presence, in person or by properly executed
proxy, of the holders of shares of common stock entitled to cast a majority of all the votes entitled to be cast at the Annual Meeting
is necessary to constitute a quorum. Holders of shares of common stock represented by a properly signed, dated and returned proxy will
be treated as present at the Annual Meeting for purposes of determining a quorum. Proxies relating to “street name” shares
that are voted by brokers will be counted as shares present for purposes of determining the presence of a quorum, but will not be treated
as votes cast at the Annual Meeting as to any proposal as to which the brokers do not have voting instructions or discretion to vote on
routine matters. These missing votes are known as “broker non-votes.”
Cost
of this Proxy Solicitation
We will pay the cost of this proxy solicitation.
In addition to soliciting proxies by mail, our directors and employees might solicit proxies personally and by telephone. None of these
individuals will receive any compensation for solicitation activities. We will, upon request, reimburse banks, brokerage firms and other
nominees for their expenses in sending proxy materials to their principals and obtaining their proxies.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Why am I receiving these materials?
We mailed a Notice of Internet Availability of
Proxy Materials and provided access to these proxy materials because the board of directors of Citius Pharmaceuticals, Inc. is soliciting
your proxy to vote at the 2024 Annual Meeting of stockholders. We invite you to attend the Annual Meeting and request that you vote on
the proposals described in this proxy statement. The meeting will be held on Tuesday, March 12, 2024 at 8:00 a.m. (Eastern time) at the
Company’s headquarters located at 11 Commerce Drive, First Floor, Cranford, New Jersey 07016. However, you do not need to attend
the meeting to vote your shares. Instead, you may follow the instructions in the Notice of Internet Availability of Proxy Materials to
vote via the Internet, by telephone or by mail.
How do I attend the Annual Meeting?
To ensure an orderly meeting, you are required
to register in advance of the Annual Meeting if you plan to attend the Annual Meeting in person. If you wish to register in advance of
the Annual Meeting, please contact Jaime Bartushak no later than March 5, 2024 by email (jbartushak@citiuspharma.com), telephone (908-967-6677
x103) or U.S. mail at 11 Commerce Drive, First Floor, Cranford, New Jersey 07016.
Who can vote at the Annual Meeting?
Only stockholders of record at the close of business
on January 19, 2024, the record date for the Annual Meeting, will be entitled to vote at the Annual Meeting. On January 19, 2024, there
were 158,966,576 shares of common stock (each entitled to one vote) outstanding.
Stockholder of Record: Shares Registered in Your Name
If on January 19, 2024, your shares of our common
stock were registered directly in your name with our transfer agent, Vstock Transfer, LLC, then you are a stockholder of record. As a
stockholder of record, you may vote in person at the Annual Meeting, or vote by proxy via the Internet, by telephone, or by mail. Whether
or not you plan to attend the meeting, we urge you to vote, in whatever manner you prefer, to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on January 19, 2024, your shares of our common
stock were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares
held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding
your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the
right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Annual Meeting.
However, since you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request
and obtain a signed letter or other valid proxy from your broker or other agent.
What am I voting on?
There are two matters scheduled for a vote at the
Annual Meeting:
| 1. | to elect seven directors to serve until the 2025 Annual Meeting of Stockholders or until their successors are duly elected and qualified;
and |
| 2. | to ratify the selection of Wolf & Company, P.C., an independent registered public accounting firm, as the auditor of the Company
for the fiscal year ending September 30, 2024. |
We will also consider any other business that properly comes before
the meeting. As of the record date, we are not aware of any other matters to be submitted for consideration at the meeting. If any other
matters are properly brought before the meeting, the persons named in the proxy card or voter instruction card will vote the shares they
represent using their best judgment.
How many votes do I have?
On each matter to be voted upon, you have one vote
for each share of common stock you owned as of January 19, 2024.
What is the quorum requirement?
A majority of our outstanding shares of
common stock entitled to vote as of the record date must be present at the Annual Meeting in order for us to hold the meeting and
conduct business. This is called a quorum. Your shares will be counted as present at the Annual Meeting if you:
| ● | are
present and entitled to vote in person at the Annual Meeting; |
| ● | properly
submitted a proxy card or voter instruction card in advance of or at the Annual Meeting; or |
| ● | do
not provide your broker with instructions on how to vote, but the broker submits the proxy nonetheless (a broker non-vote). |
If you are present in person or by proxy at the
Annual Meeting, but abstain from voting on any or all proposals, your shares are still counted as present and entitled to vote. The proposals
listed in this proxy statement identify the votes needed to approve or ratify the proposed actions. See also “How many votes
are needed to approve each Proposal?”
How do I vote?
The procedures for voting are set forth below:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote
in person at the Annual Meeting, vote by proxy via the Internet, by telephone or by mail. Whether or not you plan to attend the Annual
Meeting, we urge you to vote, in whatever manner you prefer, to ensure your vote is counted. You may still attend the Annual Meeting and
vote in person if you have already voted via the Internet, by telephone or by mail. You may vote as follows:
| ● | Via the Internet by accessing the proxy materials on the secure website https://www.proxyvote.com
and following the voting instructions on that website; |
| ● | Via telephone by calling toll free 1-800-690-6903 in the United States or
outside the United States and following the recorded instructions; |
| ● | By requesting that printed copies of the proxy materials be mailed to you
pursuant to the instructions provided in the Notice of Internet Availability of Proxy Materials and completing, dating, signing and returning
the proxy card that you receive in response to your request; or |
| ● | To vote in person, register for and attend the Annual Meeting and we will
give you a ballot when you arrive. |
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you hold your shares in “street name”
and thus are a beneficial owner of shares registered in the name of your broker, bank or other agent, you must vote your shares in the
manner prescribed by your broker or other nominee. Your broker or other nominee has provided to you a voting instruction card for you
to use in directing the broker or nominee how to vote your shares. Check the voting form used by that organization to see if it offers
internet or telephone voting. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent.
Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy
form.
How are votes counted?
You may vote “FOR” or “WITHHOLD”
on the election of seven directors to serve until the 2025 Annual Meeting of Stockholders, and you may vote “FOR,” “AGAINST”
or “ABSTAIN” on the proposal to ratify the selection of Wolf & Company, P.C., an independent registered public accounting
firm, as the auditor of the Company for the fiscal year ending September 30, 2024.
If you mail your proxy, vote via the Internet or
by telephone, but withhold or abstain from voting on one or more matters, your shares will be counted as present at the Annual Meeting
for the purpose of determining a quorum. Your shares also will be counted as present at the meeting for the purpose of calculating the
vote on the particular matter with respect to which you withheld or abstained from voting. If you abstain or withhold from voting on a
proposal, your abstention or withheld vote has the same effect as a vote against that proposal. See “How many votes are needed
to approve each Proposal?”
If you hold your shares in street name and do not
provide voting instructions to your brokerage firm, your brokerage firm may still be able to vote your shares with respect to “discretionary”
(or routine) items, but it will not be allowed to vote your shares with respect to “non-discretionary” items. In the case
of non-discretionary items, for which no instructions are received, the shares will be treated as “broker non-votes”. Shares
that constitute broker non-votes will be counted as present at the Annual Meeting for the purpose of determining a quorum, but will not
be considered entitled to vote on the proposal in question. Your broker does not have discretionary authority to vote shares for the election
of directors. Your broker does have discretionary authority to vote on the proposal relating to the ratification of the selection of the
accounting firm. As a result, if you do not vote your street name shares, your broker has the authority to vote on your behalf with respect
to Proposal 2 (the ratification of the selection of the accounting firm).
How many votes are needed to approve each Proposal?
Proposal | |
Vote Required |
| Effect
of
Withheld
Votes or
Abstentions |
| Effect of
Broker Non-Votes |
Election of seven members to our Board of Directors | |
A majority of the votes represented at the meeting and entitled to vote. |
| Vote against |
| None |
| |
|
| |
| |
Ratification of the selection of Wolf & Company, P.C., an Independent Registered Public Accounting Firm, as the auditor for our Fiscal Year Ending September 30, 2024 | |
A majority of the votes represented at the meeting and entitled to vote. |
| Vote against |
| No broker non-votes are expected |
Can I change my vote after submitting my proxy, voting via the Internet
or by telephone?
Yes. You can revoke your proxy at any time before
the final vote at the Annual Meeting. If you are a stockholder of record, you may revoke your proxy in any one of four ways:
| ● | If you voted by telephone or via the Internet, voting again by the same means
prior to 11:59 PM Eastern time on March 11, 2024. |
| ● | You may submit another properly completed proxy card with a later date. |
| ● | You may send a written notice that you are revoking your proxy to our Corporate
Secretary, Citius Pharmaceuticals, Inc., 11 Commerce Drive, First Floor, Cranford, New Jersey 07016. |
| ● | You may register for and attend the Annual Meeting and vote in person. Simply
attending the Annual Meeting will not, by itself, revoke your proxy. |
If you are a beneficial owner of shares, you
may submit new voting instructions by contacting your bank, broker, or other holder of record. You may also vote in person at the Annual
Meeting if you obtain a legal proxy from them as described in the answer to the question above “How do I vote?”.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced
at the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K within four business days after the Annual
Meeting.
What does it mean if I receive more than one Notice of Internet
Availability of Proxy Materials?
If you receive more than one Notice of Internet
Availability of Proxy Materials, your shares are registered in more than one name or are registered in different accounts. Please vote
your shares via the Internet, by telephone or by mail for each Notice of Internet Availability of Proxy Materials you received to ensure
that all of your shares are voted.
Who is paying for this proxy solicitation?
All of the expenses involved in preparing, assembling
and mailing the proxy materials and all costs of soliciting proxies will be paid by us. In addition to the delivery of the Notice of Internet
Availability of Proxy Materials, our directors, officers and employees may also solicit proxies in person, by telephone, by facsimile,
by electronic mail or by other means of communication. We will not pay our directors, officers and employees any compensation for soliciting
proxies. We will also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
PROPOSAL 1
ELECTION OF DIRECTORS
Our bylaws provide that the number of directors
constituting the Board of Directors shall be not less than six and may consist of such larger number as may be determined from time to
time by the Board. The Board has set the number of directors at seven. There are six directors presently serving on our Board, and the
number of directors to be elected at the Annual Meeting is seven; six of the nominees currently serve on the Board. Each elected director
will serve until the Company’s 2025 Annual Meeting of Stockholders or until a successor is elected and qualified.
The Board of Directors has determined that directors
Suren Dutia, Dr. Eugene Holuka, Dennis M. McGrath, Robert Smith and Carol Webb are independent under the applicable Nasdaq listing standards.
The Board has determined that director Leonard Mazur, Chief Executive Officer, Executive Chairman and Secretary, and Myron Holubiak, Executive
Vice Chairman, are not independent under that definition due to being employed by the Company. In addition to the specific bars to independence
set forth in the applicable rules, we also consider whether a director or his or her affiliates have provided any services to, worked
for or received any compensation from us or any of our subsidiaries in the past three years. None of the nominees is related by blood,
marriage or adoption to any other nominee or any of our executive officers.
All nominees have consented to serve if elected.
We expect that each of the nominees will be available for election, but if any of them is not a candidate at the time the election occurs,
a proxy will be voted for the election of another nominee to be designated by the Board to fill any such vacancy.
Biographical and certain other information concerning
the Company’s nominees for election to the Board of Directors is set forth below. Except as indicated below in their respective
biographies, none of our directors is a director in any other reporting company. We are not aware of any proceedings to which any of our
directors or any associate of any such director is a party adverse to us or any of our subsidiaries or has a material interest adverse
to us or any of our subsidiaries.
Director Nominees
The following sets forth information concerning our director nominees
as of January 19, 2024:
Name | |
Age |
Leonard Mazur | |
78 |
Myron Holubiak | |
76 |
Suren Dutia | |
81 |
Dr. Eugene Holuka | |
64 |
Dennis M. McGrath | |
66 |
Robert Smith | |
63 |
Carol Webb | |
77 |
Leonard Mazur
Leonard Mazur is the Executive Chairman and Secretary
of the Company and has been a member of the Board since September 2014 and in May 2022 became the Chief Executive Officer. Mr. Mazur also
serves as the Secretary of our majority-owned subsidiary, NoveCite, Inc. (“NoveCite”) and President and Chief Executive Officer
of our wholly-owned subsidiary, Citius Oncology, Inc. (“Citius Oncology”), and provides other guidance to NoveCite and Citius
Oncology. Since August 2021, Mr. Mazur has served on the board of directors of Hillstream BioPharma, Inc. (Nasdaq: HILS), a pre-clinical
biotechnology company developing novel therapeutic candidates targeting ferroptosis, an emerging new anti-cancer mechanism resulting in
iron mediated cell death for treatment resistant cancers. Mr. Mazur is the co-founder and Vice Chairman of Akrimax Pharmaceuticals, LLC
(“Akrimax”), a privately held pharmaceutical company specializing in producing cardiovascular and general pharmaceutical products.
Akrimax was founded in September 2008 and has successfully launched prescription drugs while acquiring drugs from major pharmaceutical
companies. From January 2005 to May 2012, Mr. Mazur co-founded and served as the Chief Operating Officer of Triax Pharmaceuticals LLC
(“Triax”), a specialty pharmaceutical company producing prescription dermatological drugs. Prior to joining Triax, he was
the founder and, from 1995 to 2005, Chief Executive Officer of Genesis Pharmaceutical, Inc. (“Genesis”), a dermatological
products company that marketed its products through dermatologists’ offices as well as co-promoting products for major pharmaceutical
companies. In 2003, Mr. Mazur successfully sold Genesis to Pierre Fabre, a leading pharmaceutical company. Mr. Mazur has extensive sales,
marketing and business development experience from his tenures at Medicis Pharmaceutical Corporation as Executive Vice President, ICN
Pharmaceuticals, Inc. as Vice President, Sales & Marketing, Knoll Pharma (a division of BASF), and Cooper Laboratories, Inc. Mr. Mazur
is a member of the Board of Trustees of Manor College, is a recipient of the Ellis Island Medal of Honor and was previously the Chairman
of the board of directors of Leonard-Meron Biosciences, Inc. (“LMB”), the Company’s wholly-owned subsidiary. Mr. Mazur
received both his B.A. and M.B.A. from Temple University and has served in the U.S. Marine Corps Reserves.
The Board believes that Mr. Mazur is qualified
to serve as a director because of his entrepreneurial experience and marketing knowledge in the pharmaceutical industry.
Myron Holubiak
Myron Holubiak is the Executive Vice Chairman,
a position he has held since May 2022, and has been a member of the Board since October 2015. From October 2015 through April 2022, Mr.
Holubiak served as our President and Chief Executive Officer. Mr. Holubiak also serves as the acting Chief Executive Officer of our majority-owned
subsidiary, NoveCite, and Secretary of our wholly-owned subsidiary, Citius Oncology. Mr. Holubiak has extensive experience in managing
and advising large and emerging pharmaceutical and life sciences companies. Mr. Holubiak was the President of Roche Laboratories, Inc.
(“Roche”), a major research-based pharmaceutical company, from December 1998 to August 2001. Prior to that, he held sales
and marketing positions at Roche during his 19-year tenure. From September 2002 to July 2016, Mr. Holubiak served on the board of directors
and for the last two years was the Chairman of the board of directors of BioScrip, Inc. (“BioScrip”) (Nasdaq: BIOS). BioScrip
is a leading national provider of infusion and home care management solutions. Since July 2010, Mr. Holubiak has served as a member of
the board of directors of Assembly Biosciences, Inc. (“Assembly”) (Nasdaq: ASMB) and its predecessor Ventrus Biosciences,
Inc. Assembly is a biopharmaceutical company developing innovative treatments for hepatitis B virus infection (HBV) and C. difficile-associated
diarrhea (CDAD). Additionally, Mr. Holubiak serves as a director for bioAffinity Technologies Inc., a privately held company. In March
2013, Mr. Holubiak founded LMB, the Company’s wholly-owned subsidiary, and he served as the Chief Executive Officer and President
of LMB until March 2016. In addition, Mr. Holubiak was also a trustee of the Academy of Managed Care Pharmacy Foundation from April 2013
to April 2015. Mr. Holubiak received a B.S. in Molecular Biology and Biophysics from the University of Pittsburgh; he received advanced
business training from the Harvard Business School and the University of London; and advanced training in health economics from the University
of York’s Centre for Health Economics.
The Board believes that Mr. Holubiak is qualified
to serve as a director because of his industry knowledge and experience managing both large and small pharmaceutical companies.
Suren Dutia
Suren Dutia has been a member of the Board since
October 2015. In addition to his role as an outside independent director of Citius Pharma, Mr. Dutia has been serving as director of Flint
Rehab and Vahan Inc, since 2016. Mr. Dutia has been involved in fostering entrepreneurship for more than 20 years and served as Senior
Fellow of the Ewing Mario Kauffman Foundation from March 2011 to December 2016 and Senior Fellow of Skandalaris Center for Entrepreneurship
and Innovation at Washington University, St. Louis from 2010 to 2013. He has served as a member of the advisory board of Center for Digital
Transformation, University of California, Irvine since May 2012. From February 2006 to May 2010, Mr. Dutia served as the Chief Executive
Officer of TiE, a non-profit organization involved in fostering entrepreneurship globally. From February 2011 to May 2013, Mr. Dutia served
as a director of LifeProof and from July 2000 to December 2011, he served as a director of Anvita Health. From 1989 to 1998, Mr. Dutia
served as the Chief Executive Officer and Chairman of the board of directors of Xscribe Corporation. Prior to his positions with Xscribe
Corporation, Mr. Dutia held several positions with Dynatech Corporation, and, in addition, he was the President of a medical instruments
company. Mr. Dutia received his B.S. and M.S. degrees in chemical engineering and B.A. in political science from Washington University,
St. Louis. In addition, he obtained an M.B.A. from the University of Dallas.
The Board believes that Mr. Dutia is qualified
to serve as a director because of his financial management background, his involvement with start-up companies and his management skills.
Dr. Eugene Holuka
Dr. Eugene Holuka has served as a director of the
Company since June 2016. Dr. Holuka is an internist and has practiced in critical care medicine for almost 35 years. He is presently an
attending physician at the Staten Island University Hospital where he has practiced since 1991. Dr. Holuka has also served as an Adjunct
Clinical Assistant Professor at the Touro College of Osteopathic Medicine since 2011. From April 2014 until the acquisition of LMB by
the Company in March 2016, he was a member of the LMB Scientific Advisory Board. Dr. Holuka received the Ellis Island Medal of Honor in
2000 and has served on the NECO Committee Board since 2005. He was an Executive Committee Member on the Forum’s Children Foundation
from 2000 until 2008.
The Board believes that Dr. Holuka is qualified
to serve as a director because of his extensive experience in the healthcare industry.
Dennis M. McGrath
Dennis M. McGrath has served as the President of
PAVmed, Inc. (Nasdaq: PAVM), a diversified commercial-stage medical technology company since March 2019 (having served as Executive Vice
President from March 2017 to March 2019) and as PAVmed’s Chief Financial Officer since March 2017. Mr. McGrath has also served as
the Chief Financial Officer of Lucid, PAVmed’s majority owned subsidiary since the consummation of Lucid’s initial public
offering. Previously, from 2000 to 2017 Mr. McGrath served in several senior level positions of PhotoMedex, Inc. (formerly, Nasdaq: PHMD),
a global manufacturer and distributor of medical device equipment and services, including from 2011 to 2017 as director, President, and
Chief Financial Officer. Prior to PhotoMedex’s reverse merger with Radiancy, Inc in December 2011, he also served as a board member
and Chief Executive Officer from 2009 to 2011 and served as Vice President of Finance and Chief Financial Officer from 2000 to 2009. He
received honors as a P.A.C.T. (Philadelphia Alliance for Capital and Technology) finalist for the 2011 Investment Deal of the Year, award
winner for the SmartCEO Magazine 2012 CEO of the Year for Turnaround Company, and finalist for the Ernst & Young 2013 Entrepreneur
of the Year. He has extensive experience in mergers and acquisitions, both domestically and internationally, particularly involving public
company acquisitions, including Surgical Laser Technologies, Inc, (formerly, Nasdaq: SLTI), ProCyte Corporation (formerly, Nasdaq: PRCY),
LCA Vision, Inc. (formerly, Nasdaq: LCAV) and Think New Ideas, Inc. (formerly, Nasdaq: THNK). Prior to PhotoMedex, he served in several
senior level positions of AnswerThink Consulting Group, Inc. (then, Nasdaq: ANSR, now, The Hackett Group, Nasdaq: HCKT), a business consulting
and technology integration company, including from 1999 to 2000 as Chief Operating Officer of the Internet Practice, the largest division
of AnswerThink Consulting Group, Inc., while concurrently during the merger of the companies, serving as the acting Chief Financial Officer
of Think New Ideas, Inc. (then, Nasdaq: THNK, now, Nasdaq: HCKT), an interactive marketing services and business solutions company. Mr.
McGrath also served from 1996 until 1999 as Chief Financial Officer, Executive Vice President and director of TriSpan, Inc., an internet
commerce solutions and technology consulting company, which was acquired by AnswerThink Consulting Group, Inc. in 1999. During his tenure
at Arthur Andersen & Co., where he began his career, he became a Certified Public Accountant in 1981 and he holds a B.S., maxima cum
laude, in accounting from LaSalle University. In addition, he serves as the audit and compensation committee chair and a director of several
medical device companies, including DarioHealth Corp. (Nasdaq: DRIO), Cagent Vascular, LLC and BioVector, Inc. Formerly from 2007 to 2009,
Mr. McGrath served as a director of Embrella Cardiovascular, Inc. (sold to Edwards Lifesciences Corporation, NYSE: EW). He also serves
on the Board of Visitors for Taylor University and as Chairman of the Board of Trustees of Manor College.
The Board believes that Mr. McGrath is qualified
to serve as a director because of his background of his extensive business experience and board service with public companies.
Robert Smith
Robert J. Smith is an accomplished biopharmaceutical executive who
has driven commercial, financial, and operational success at leading pharmaceutical companies, including Pfizer Inc. (NYSE: PFE) and Wyeth
(formerly NYSE: WYE), for more than 35 years. Mr. Smith’s extensive industry expertise has been honed by decades of executive leadership
roles in business development, mergers and acquisitions, corporate and commercial strategy, and research and development. For the past
eight years (May 2016 to January 2024), Mr. Smith served as Senior Vice President, Global Gene Therapy Business of Pfizer and was responsible
for managing and leading its gene therapy business and the rare disease early commercial development activities in partnership with the
rare disease research unit. During his tenure at Pfizer, Mr. Smith also served as Senior Vice President, Business Development (October
2009 to May 2016) and led the business development and strategic transactions teams supporting its worldwide research and development
organization. During his tenure with Pfizer, he also led the business development and strategy teams for Pfizer’s global animal
health, Capsugel, a former subsidiary of Pfizer, consumer healthcare and nutrition business units, as well as the alliance management
function supporting all of Pfizer’s global biopharmaceutical business units and the worldwide research and development organization.
Mr. Smith joined Pfizer from Wyeth Pharmaceuticals in 2009, following Pfizer’s acquisition of Wyeth, where he was Senior Vice President,
Mergers and Acquisitions (April 2008 to October 2009) responsible for leading and managing Wyeth’s global mergers and acquisitions
group. Prior to that, in his role at Wyeth as Senior Vice President of Global Licensing, he completed a wide variety of transactions in
support of Wyeth’s commercial and research and development divisions. Mr. Smith has served as a member of the Board of Directors
of private companies AM Pharma B.V. (observer), Bamboo Therapeutics Inc. (January 2016 to August 2016), and Ignite Immunotherapeutics
Inc. (December 2016 to October 2019), as well as Iterum Therapeutics Limited (observer) (Nasdaq: ITRM). Mr. Smith also serves or has served
as a member of Life Sciences PA – the Pennsylvania Biotechnology Association, Bio NJ – the New Jersey State Biotechnology
Association (since 2021), the Duke Margolis Value Based Agreements Advisory Board, the Alliance for Regenerative Medicine (ARM) (since
2018) and the Foundation for Cell and Gene Medicine (FCGM) (since 2019). He is a member of the Executive Committees of the ARM and FCGM
Board of Directors and serves as the Chairman of the ARM Board’s Governance and Operations Committee. Mr. Smith is also a member
of the Business Advisory Board of Ocugen, Inc., the Investment Advisory Committee for Venture Investors LLC, Madison, Wisconsin, and the
Cell and Gene Therapy Scientific Advisory Board of the Focused Ultrasound Foundation based in Charlottesville, Virginia. Mr. Smith obtained
a B.S. in Neuroscience from the University of Rochester and an M.B.A. in Finance and Corporate Accounting from the William E. Simon Graduate
School of Business Administration at the University of Rochester, Rochester, New York.
The Board believes that Mr. Smith is qualified
to serve as a director because of his extensive background with public companies and his business experience. Mr. Smith was brought to
the attention of the Nominating and Governance Committee for consideration by Mr. Mazur, our Chief Executive Officer and Executive Chairman.
Carol Webb
Carol Webb has served as a director of LMB since
March 17, 2014 and, upon LMB’s acquisition by the Company in March 2016, a director of the Company. From 2000 to 2005, she served
as Company Group Chairman of Johnson & Johnson. From 1987 to 2000, she served in various capacities at Ortho Biotech, including President,
Vice President, Executive Director, Product Management and Senior Product Director. From 1972 to 1983, Ms. Webb worked in various positions
at Roche Laboratories, including Sales Representative, Sales Trainer, Product Manager and Manager of Public Policy. Ms. Webb received
her B.S. in Biology from Bowling Green State University.
The Board believes that Ms. Webb is qualified to
serve as a director because she brings over 40 years of pharmaceutical sales, marketing and business development experience to our Board
of Directors.
Required Vote
Provided there is a quorum for the meeting, pursuant
to the terms of our bylaws, the election of each director requires the affirmative vote of a majority of the votes represented at the
Annual Meeting in person or by proxy and entitled to vote on this Proposal No. 1. Broker non-votes, if any, are not entitled to vote,
and therefore will have no effect on the election of directors. Withheld votes, if any, are entitled to vote, and therefore will have
the same effect as a vote against the election of directors.
Recommendation
Our Board unanimously recommends that stockholders
vote FOR the election of the seven nominees for election to the Board for a one-year term.
PROPOSAL 2
RATIFICATION OF THE SELECTION OF WOLF &
COMPANY, P.C.,
AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM, AS THE AUDITOR OF THE COMPANY
FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2024
The Company’s stockholders are being asked
to ratify the Board of Directors’ selection of Wolf & Company, P.C. (“Wolf”), an independent registered public accounting
firm, as the auditor of the Company for the fiscal year ending September 30, 2024. While the Audit Committee is solely responsible for
the appointment, compensation, retention and oversight of the independent registered public accounting firm, the Committee and the Board
are requesting that the stockholders ratify this appointment. If the stockholders ratify this appointment, the Audit Committee, in its
discretion, may appoint a different independent registered public accounting firm at any time during the year if it believes that doing
so would be in the best interests of the Company and our stockholders. If the stockholders do not ratify this appointment, the Audit Committee
may reconsider, but might not change, its appointment.
A representative of Wolf is not expected to be
present but will attend telephonically the Annual Meeting and will have an opportunity to make a statement if he or she desires to do
so. It is also expected that such representative will be available to respond to appropriate questions.
Required Vote
Provided there is a quorum for the meeting, ratification
of the appointment of Wolf as our auditor for the fiscal year ending September 30, 2024, requires the affirmative vote of a majority of
the votes represented at the Annual Meeting in person or by proxy and entitled to vote on this Proposal No. 2. Broker non-votes and abstentions,
if any, are entitled to vote, and therefore will have the same effect as a vote against this Proposal No. 2. No broker non-votes are expected
because this Proposal No. 2 is a routine matter.
Recommendation
Our Board unanimously recommends that stockholders
vote FOR the ratification of the Board of Directors’ appointment of Wolf & Company, P.C., an independent registered public
accounting firm, as the auditor of the Company for fiscal year ending September 30, 2024.
CORPORATE GOVERNANCE
Information Regarding the Board and its Committees
Board Composition
Our Board currently consists of six members. Each
director elected at this meeting will serve until the Company’s 2025 Annual Meeting of Stockholders or until a successor is duly
elected and qualified.
Our Board of Directors is responsible for the selection
of the Chairman of the Board, the Chief Executive Officer and the Lead Independent Director. Our Board does not have a policy on whether
or not the roles of Chief Executive Officer and Chairman should be separate and, if they are to be separate, whether the Chairman should
be selected from the non-employee directors or be an employee. Our Board of Directors appointed Leonard Mazur as our Chief Executive Officer
and Executive Chairman, Myron Holubiak as our Executive Vice Chairman of the Board, and Suren Dutia as Lead Independent Director.
There are no family relationships among our executive
officers and directors or director nominee.
Selection of Nominees for our Board of Directors
The Nominating and Governance Committee of our
board of directors is responsible for establishing the criteria for recommending which directors should stand for re-election to the Board
and the selection of new directors to serve on the Board. In addition, the Committee is responsible for establishing the procedures for
our stockholders to nominate candidates to the Board. Board candidates are typically identified by existing directors or members of management.
The committee considers the needs for the Board of Directors as a whole when identifying and evaluating nominees and, among other things,
considers diversity in background, age, experience, qualifications, attributes and skills in identifying nominees, although it does not
have a formal policy regarding the consideration of diversity. Each director nominee is recommended by the Nominating and Governance Committee.
Pursuant to the Company’s bylaws, our stockholders
may select individuals to be nominated for election to the Board of Directors by providing written notice to the Company no more than
90 and not less than 60 days before the meeting. Such notice must set forth the following:
| ● | the name and address, as they appear on the Company’s books, of the
stockholder who intends to make the nomination and the name and residence address of the person or persons to be nominated; |
| ● | the class and number of shares of the Company that are beneficially owned
by the stockholder; |
| ● | a representation that the stockholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting; |
| ● | a description of all arrangements or understandings between the stockholder
and each nominee and any other person or persons pursuant to which the nomination was made; |
| ● | such other information regarding each nominee proposed by such stockholder
as would be required to be disclosed in solicitations of proxies for election of directors, pursuant to Regulation 14A under the Securities
Exchange Act, as amended, or the Exchange Act, including any information that would be required to be included in a proxy statement filed
pursuant to Regulation 14A had the nominee been nominated by the board of directors; and |
| ● | the written consent of each nominee to be named in a proxy statement and
to serve as director of the Company if so elected. |
Our Nominating and Governance Committee will evaluate
a nominee recommended by a stockholder in the same manner in which the Committee evaluates nominees recommended by other persons as well
as its own nominee recommendations. No stockholder has nominated anyone for election as a director at this Annual Meeting.
Board Independence
After review of all relevant transactions or relationships
between each nominee for director, or any of his or her family members, and the Company, its senior management and Wolf, the Company’s
independent registered public accounting firm, the Board of Directors has determined that all of the Company’s directors and the
Company’s nominees for director are independent within the meaning of the applicable Nasdaq listing standards, except Leonard Mazur,
the Chief Executive Officer and Chairman of the Company, and Myron Holubiak, the Executive Vice Chairman of the Company, due to their
employment with the Company.
Board Committees
The Company has a Nominating and Governance Committee,
Audit and Risk Committee, and Compensation Committee. The Board has determined that each of the members of the Nominating and Governance,
Audit and Risk and Compensation Committees is independent. The adopted written charters for each of these committees are available under
the Investors – Governance – Governance Documents section of our website at www.citiuspharma.com. Each committee
is required to perform an annual evaluation of its charter, and each committee may engage outside independent advisors as the committee
deems appropriate. A brief description of the responsibilities of the Nominating and Governance, Audit and Risk and the Compensation Committees
follows.
Audit and Risk Committee
Our Audit and Risk Committee currently consists
of Messrs. McGrath (Chair), Dutia and Ms. Webb. Contingent and effective upon his election to the Board, Mr. Smith is appointed to the
Audit and Risk Committee and will replace Ms. Webb. Each of Messrs. Dutia, McGrath and Smith and Ms. Webb satisfy the independence requirements
of Rule 5605(a)(2) of the Nasdaq Listing Rules and SEC Rule 10A-3. Our Audit and Risk Committee is responsible for, among other things:
| ● | appointing, terminating, compensating, and overseeing the work of any accounting
firm engaged to prepare or issue an audit report or other audit, review or attestation services; |
| ● | reviewing and approving, in advance, all audit and non-audit services to
be performed by the independent auditor, taking into consideration whether the independent auditor’s provision of non-audit services
to us is compatible with maintaining the independent auditor’s independence; |
| ● | reviewing and discussing the adequacy and effectiveness of our accounting
and financial reporting processes and controls and the audits of our financial statements; |
| ● | establishing and overseeing procedures for the receipt, retention, and treatment
of complaints received by us regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential,
anonymous submission by our employees regarding questionable accounting or auditing matters; |
| ● | monitoring and evaluating the independent auditor’s qualifications,
performance, and independence on an ongoing basis; and |
| ● | reviewing and approving related-party transactions for potential conflict
of interest situations on an ongoing basis. |
Our board of directors has affirmatively determined
that Messrs. McGrath and Dutia are designated as the “audit committee financial experts.” The designation does not impose
on Messrs. McGrath and Dutia any duties, obligations or liabilities that are greater than those generally imposed on members of our audit
committee and our board of directors.
Compensation Committee
Our Compensation Committee consists of Mr. Dutia
(Chair), Dr. Holuka and Ms. Webb. Our Compensation Committee is responsible for, among other things:
| ● | reviewing and approving the compensation, employment
agreements and severance arrangements, and other benefits of all of our executive officers and key employees; |
| ● | reviewing and approving, on an annual basis,
the corporate goals and objectives relevant to the compensation of the executive officers, and evaluating their performance in light thereof; |
| ● | reviewing and making recommendations, on an annual
basis, to the Board with respect to director compensation; and |
| ● | reviewing any analysis or report on executive compensation required to be
included in the annual proxy statement and periodic reports pursuant to applicable federal securities rules and regulations, and recommending
the inclusion of such analysis or report in our proxy statement and period reports. |
Pursuant to its written charter, our Compensation
Committee has the authority to engage the services of outside advisors as it deems appropriate to assist it in the evaluation of the compensation
of our directors, principal executive officer or other executive and non-executive officers, and in the fulfillment of its other duties.
Additionally, our Compensation Committee has the authority to review and approve the compensation of our other officers and employees
and may delegate its authority to review and approve the compensation of other non-executive officer employees to specified executive
officers.
Nominating and Governance Committee
Our Nominating and Governance Committee currently
consists of Dr. Holuka (Chair), Mr. McGrath and Ms. Webb. It is responsible for, among other things:
| ● | identifying and screening candidates for our
Board, and recommending nominees for election as directors; |
| ● | establishing procedures to exercise oversight
of the evaluation of the Board and management; |
| ● | reviewing the structure of the Board’s
committees and recommending to the board for its approval directors to serve as members of each committee, and where appropriate, making
recommendations regarding the removal of any member of any committee; |
| ● | developing and reviewing our code of conduct,
evaluating management’s communication of the importance of our code of conduct, and monitoring compliance with our code of conduct;
and |
| ● | generally advising our Board on corporate governance
and related matters. |
Information Regarding Meetings of the Board and Committees
The business of our Company is under the general oversight of our Board
as provided by the laws of Nevada and our bylaws. During the year ended September 30, 2023, our Board held nine meetings, our Audit and
Risk Committee held four meetings, our Compensation Committee held no meetings (acting instead with the full Board on all matters requiring
Compensation Committee approval) and our Nominating and Governance Committee held two meetings. In fiscal 2023, each director nominee
attended at least 75% of the Board meetings and the meetings of the committee on which he or she served since being appointed to the Board
and respective committees. Our Board and our Compensation Committee also took certain actions by unanimous written consent during fiscal
2023.
We do not have a formal policy regarding attendance
of Board members at annual meetings, but we encourage them to do so. Director Leonard Mazur attended the 2023 Annual Meeting in person;
other directors participated via telephone.
Code of Ethics
We have adopted a code of ethics relating to the
conduct of our business by all of our employees, officers and directors. We have also adopted a corporate communications policy for our
employees and directors establishing guidelines for the disclosure of information related to the Company to the investing public, market
analysts, brokers, dealers, investment advisors, the media, and any persons who are not our employees or directors. Additionally, we have
adopted an insider trading policy to establish guidelines for our employees, officers, directors, and consultants regarding transactions
in our securities and the disclosure of material nonpublic information related to our Company, which are reasonably designed to promote
compliance with insider trading laws, rules and regulations, and any listing standards applicable to the registrant. Each of these policies
is posted under the Investors – Governance – Governance Documents section of our website at www.citiuspharma.com.
Anti-Hedging and Anti-Pledging Policy
Our Board of Directors
has not adopted an anti-hedging or anti-pledging policy. However, our Insider Trading Policy strongly discourages our directors,
officers and employees from engaging in any hedging activity in our securities or pledging any of our securities as collateral for loans
or margin accounts.
Risk Oversight
While management is responsible for managing the
day-to-day issues faced by the Company, our Board of Directors has an active role in the oversight of the Company’s risk management
efforts. The Board of Directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered
appropriate regarding the Company’s assessment of risks. The Board of Directors focuses on the most significant risks facing the
Company and the Company’s general risk management strategy, and also ensures that risks undertaken by the Company are consistent
with the Board’s appetite for risk. We believe this division of responsibilities is the most effective approach for addressing the
risks facing the Company and that our Board leadership structure supports this approach.
The Board also relies on its committees for specific
risk oversight. In particular, the Audit and Risk Committee oversees risk related to our accounting, tax, financial and public disclosure
processes, as well as risks associated with our financial assets. The Compensation Committee oversees risks related to our compensation
and benefit plans and policies to ensure sound pay practices that do not cause risks to arise that are reasonably likely to have a material
adverse effect on our Company.
In order to promote open discussion among non-employee
directors, our Board of Directors has a policy of regularly conducting executive sessions of non-employee directors at scheduled meetings
and at such other times requested by any non-employee director. In December 2023, following the death of director Howard Safir, Suren
Dutia was selected by the Board to serve as lead independent director until a successor is elected and qualified. As lead independent
director, Mr. Dutia provides valuable leadership to the independent directors, presides over meetings and sessions of the independent
directors, and advises the Board on matters where there may be an actual or perceived conflict of interest.
Clawback Policy
We have adopted a clawback policy to provide for
the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Act, final SEC rules and applicable listing
standards.
Board Diversity
We are committed to fostering
an environment of diversity and inclusion, including among the members of our Board of Directors. Therefore, while the Board has not adopted
a formal diversity policy, in considering director nominees, the Nominating and Governance Committee considers candidates who represent
a mix of backgrounds and a diversity of gender, race, ethnicity, age, background, professional experience and perspectives that enhance
the quality of the deliberations and decisions of our Board, in the context of both the perceived needs of the structure of our Board
and the Company’s business and structure at that point in time.
The following chart summarizes
certain self-identified personal characteristics of our directors, in accordance with Nasdaq Listing Rule 5605(f). The chart only includes
information regarding directors nominated for reelection at the Annual Meeting. Each term used in the table has the definition provided
in the rule and related instructions. To see our Board Diversity Matrix for the prior year, please see our proxy statement filed with
the SEC on December 22, 2022.
Board Diversity Matrix (as of January 19, 2024) |
Total Number of Directors | |
6 |
| |
|
| |
Female | | |
Male | | |
Non-Binary | | |
Did Not Disclose Gender | |
Part I: Gender Identity | |
| | |
| | |
| | |
| |
Directors | |
1 | | |
5 | | |
— | | |
— | |
Part II: Demographic Background | |
| | |
| | |
| | |
| |
African American or Black | |
— | | |
— | | |
— | | |
— | |
Alaskan Native or Native American | |
— | | |
— | | |
— | | |
— | |
Asian | |
— | | |
1 | | |
— | | |
— | |
Hispanic or Latinx | |
— | | |
— | | |
— | | |
— | |
Native Hawaiian or Pacific Islander | |
— | | |
— | | |
— | | |
— | |
White | |
1 | | |
4 | | |
— | | |
— | |
Two or More Races or Ethnicities | |
— | | |
— | | |
— | | |
— | |
LGBTQ+ | |
— | | |
— | | |
— | | |
— | |
Did Not Disclose Demographic Background | |
— | | |
— | | |
— | | |
— | |
Stockholder Proposals
Our bylaws establish procedures for bringing business
before any annual meeting or special meeting of stockholders and stockholder director nominations. A stockholder entitled to vote in the
election of directors may submit a stockholder proposal or nominate one or more persons for election as directors at a meeting only if
written notice of such stockholder’s intent to make such proposal or nomination has been delivered to our Corporate Secretary at
our principal executive offices not less than 60 days nor more than 90 days prior to the meeting.
A stockholder’s notice must set forth:
| ● | a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting
and, if such business includes a proposal to amend our bylaws, the language of the proposed amendment; |
| ● | the name and address, as they appear on the Company’s books, of the stockholder proposing such business; |
| ● | the class and number of shares that are beneficially owned by such stockholder; |
| ● | a representation that the stockholder is a holder of record of stock entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to propose such business; and |
| ● | any material interest of the stockholder in such business. |
A stockholder must also comply with all applicable
laws, rules and regulations, including the Securities Act of 1933, as amended, and rules promulgated thereunder governing proxies and
stockholder proposals.
In the absence of such notice to the Company meeting
the above requirements, a stockholder will not be entitled to present any business at any meeting of stockholders.
See “Selection of Nominees for our Board
of Directors” for procedures for proxy access for stockholder director nominations.
EXECUTIVE OFFICERS
The names of our executive officers and their ages,
positions, and biographies as of January 19, 2024, are set forth below.
Name |
|
Age |
|
Title |
Leonard Mazur |
|
78 |
|
Chief Executive Officer, Chairman, Secretary and Director |
|
|
|
|
|
Myron Holubiak |
|
76 |
|
Executive Vice-Chairman and Director |
|
|
|
|
|
Jaime Bartushak |
|
56 |
|
Chief Financial Officer and Chief Business Officer |
|
|
|
|
|
Myron S. Czuczman, M. D. |
|
64 |
|
Chief Medical Officer and Executive Vice President |
In May 2022, Mr. Mazur was appointed as Chief Executive
Officer of the Company and Mr. Holubiak was appointed Executive Vice Chairman of the Company. In November 2017, Mr. Bartushak was appointed
as Chief Financial Officer and in May 2022, he also was appointed as Chief Business Officer of the Company. In July 2020, Dr. Czuczman
was appointed Chief Medical Officer and Executive Vice President of the Company. The biographies for Leonard Mazur and Myron Holubiak
are contained in the information disclosures relating to the Company’s nominees for director.
Jaime Bartushak
From April 1, 2014 until November 2017, Mr. Bartushak
served as Chief Financial Officer of Leonard-Meron Biosciences, Inc. (“LMB”), a wholly-owned subsidiary of the Company. November
2017, he became our Chief Financial Officer upon the acquisition of LMB by the Company. In November 2022, he was appointed Chief Business
Officer of the Company. Mr. Bartushak also serves as Treasurer and Chief Financial Officer of our wholly-owned subsidiary, Citius Oncology.
Mr. Bartushak is an experienced finance professional for early stage pharmaceutical companies, and has over 20 years of corporate finance,
business development, restructuring, and strategic planning experience. Mr. Bartushak was one of the founders of LMB in 2014 and was instrumental
in its startup as well as in obtaining initial investment capital. In 2014, prior to his work at LMB, Mr. Bartushak helped lead the sale
of PreCision Dermatology, Inc. to Valeant Pharmaceuticals International, Inc.
Myron S. Czuczman, M.D.
Dr. Czuczman joined Citius Pharma in July 2020.
Prior to his employment with Citius Pharma, Dr. Czuczman was Vice President, Global Clinical Research and Development, Therapeutic Area
Head of Lymphoma/CLL at Celgene Corporation, a position he held from June 2015 to January 2020. Prior to working in the pharmaceutical
industry, Dr. Czuczman practiced medicine for over two decades at Roswell Park Cancer Institute, an NCI-designated comprehensive cancer
center in Buffalo, NY, where he served as chief of the Lymphoma/Myeloma Service and head of the Lymphoma Translational Research Laboratory.
In addition to his extensive publications record, membership and leadership roles on national and international research organizations,
and consulting and advisory to dozens of pharma companies, Dr. Czuczman also attained the positions of tenured Professor of Medicine at
the State University of New York at Buffalo School of Medicine and Biomedical Sciences and Professor of Oncology at Roswell Park Comprehensive
Cancer Center. Dr. Czuczman received his medical degree from the Pennsylvania State University College of Medicine after graduating magna
cum laude in Biochemistry from the University of Pittsburgh. He completed his Internal Medicine residency training at Weill Cornell North
Shore University/MSKCC Program, followed by Medical Oncology/Hematology fellowship training at Memorial Sloan-Kettering Cancer Center
in New York City.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table shows the amount of our common
stock beneficially owned as of January 19, 2024 by (i) each person or group as those terms are used in Section 13(d)(3) of the Exchange
Act believed by us to beneficially own more than 5% of our common stock, (ii) each of our current directors and our director nominee,
(iii) each of our named executive officers, and (iv) all of our directors and named executive officers as a group. Except as otherwise
noted, each person named in the table has sole voting and investment power with respect to all shares shown as beneficially owned by them,
subject to applicable community property laws.
Name of Beneficial Owner (1) | |
Number of
Shares of
Common Stock
Beneficially
Owned (2) | | |
Percentage of
Shares of
Common Stock
Beneficially
Owned (3) | |
Executive Officers and Directors | |
| | |
| |
Leonard Mazur (4) | |
| 18,394,013 | | |
| 11.0 | % |
Myron Holubiak (5) | |
| 4,822,938 | | |
| 3.0 | % |
Jaime Bartushak (6) | |
| 795,287 | | |
| * | |
Myron S. Czuczman, M.D. (7) | |
| 800,000 | | |
| * | |
Suren Dutia (8) | |
| 326,667 | | |
| * | |
Carol Webb (9) | |
| 325,405 | | |
| * | |
Eugene Holuka (10) | |
| 315,749 | | |
| * | |
Dennis M. McGrath (11) | |
| 75,000 | | |
| * | |
All executive officers, directors and director nominee as a group (9 people) | |
| 25,855,059 | | |
| 15.0 | % |
(1) |
The address for our officers and directors is c/o of the Company, 11 Commerce Drive, First Floor, Cranford, New Jersey 07016. |
|
|
(2) |
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of January 19, 2024 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person. |
|
|
(3) |
Percentage based on 158,966,576 shares of common stock issued and outstanding at January 19, 2024. |
|
|
(4) | Consists of (i) 10,255,343 shares of common stock, (ii) 1,601,667 shares of common stock issuable upon exercise of options and (iii)
warrants to purchase an aggregate of 6,537,003 shares of common stock. |
(5) | Consists of (i) 1,992,243 shares of common stock, (ii) 1,358,334 shares of common stock issuable upon exercise of options and (iii)
warrants to purchase an aggregate of 1,472,361 shares of common stock. |
(6) | Consists of (i) 60,353 shares of common stock and (ii) 734,934 shares of common stock issuable upon exercise of options. |
(7) | Consists of 800, 000 shares of common stock issuable upon exercise and options. |
(8) | Consists of 326,667 shares of common stock issuable upon exercise of options. |
(9) | Consists of 325,405 shares of common stock issuable upon exercise of options. |
(10) | Consists of 315,749 shares of common stock issuable upon exercise of options. |
(11) | Consists of 75,000 shares of common stock issuable upon exercise of options. |
Director
Compensation
Director Compensation for the Fiscal Year ended September 30, 2023
In July 2021, the Board approved a compensation
plan for non-employee directors after receiving input from Frederic W. Cook & Co. (“FW Cook”), an independent compensation
consultant. Non-employee directors each receive an annual retainer of $40,000 and no additional compensation for meetings attended. In
addition: (i) the Lead Independent Director receives an additional annual retainer of $15,000, (ii) the Audit and Risk Committee Chair
receives an additional annual retainer of $17,000, the Compensation Committee Chair receives an additional annual retainer of $12,000,
and the Nominating and Corporate Governance Committee Chair receives an additional annual retainer of $10,000, and (iii) Audit Committee
members receive an annual retainer of $8,500, Compensation Committee members receive an annual retainer of $6,000, and Nominating and
Governance Committee members receive an annual retainer of $5,000.
Also, as part of the non-employee director compensation
plan, non-employee directors are entitled to receive 75,000 stock options as part of their annual compensation.
Director compensation for the year ended September
30, 2023 was as follows:
Name | |
Fees
Earned or
Paid in
Cash (1) | | |
Stock
Awards | | |
Option Awards (1) | | |
All Other
Compensation | | |
Total | |
Suren Dutia (2)(3) | |
$ | 57,000 | | |
| -- | | |
$ | 139,970 | | |
| -- | | |
$ | 196,970 | |
Carol Webb (2)(3) | |
$ | 51,000 | | |
| -- | | |
$ | 139,970 | | |
| -- | | |
$ | 190,970 | |
Dr. William Kane (4) | |
$ | 20,800 | | |
| -- | | |
$ | 79,970 | | |
| -- | | |
$ | 100,770 | |
Howard Safir (5) | |
$ | 75,500 | | |
| -- | | |
$ | 114,203 | | |
| -- | | |
$ | 189,703 | |
Dr. Eugene Holuka (2)(3) | |
$ | 51,000 | | |
| -- | | |
$ | 139,970 | | |
| -- | | |
$ | 190,970 | |
Dennis McGrath (2)(3) | |
$ | 37,700 | | |
| -- | | |
$ | 112,429 | | |
| -- | | |
$ | 150,129 | |
(1) |
The dollar amount set forth in the table represents the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year on an accrual basis for fees earned and in accordance with FASB ASC Topic 718 for option awards. |
|
|
(2) |
At September 30, 2023, the non-employee directors held the following
options to purchase shares of Citius common stock: Mr. Dutia, 326,667; Ms. Webb, 325,405; Mr. McGrath, 75,000; and Dr. Holuka 315,749. |
|
|
(3) |
At September 30, 2023, the non-employee directors held the following
options to purchase shares of Citius Oncology, Inc. common stock: Mr. Dutia, 150,000; Ms. Webb, 150,000; Mr. McGrath, 150,000; and Dr.
Holuka, 150,000, the value of which are $60,000 each. |
|
|
(4) |
Dr. Kane’s service as a director ended on February 7, 2023. |
|
|
(5) |
Mr. Safir died on September 11, 2023. |
EXECUTIVE COMPENSATION
Executive Compensation Objectives
We seek to achieve the following broad goals in
our executive compensation programs and decisions regarding individual compensation:
|
● |
Attract and retain executives critical to our overall success. |
|
● |
Reward executives for contributions to achieving strategic goals that enhance stockholder value. |
|
● |
Foster and maintain a company culture of ownership, creativity and innovation. |
|
● |
Motivate our executive officers to achieve critical long- and short-term development, product and financial milestones set by the Board in consultation with management. |
Named Executive Officers
Our “Named Executive
Officers” for the year ended September 30, 2023 consist of Mr. Mazur, who served as our principal executive officer during fiscal
2023, and Mr. Holubiak, our Executive Vice Chairman, and Dr. Czuczman, our Chief Medical Officer and Executive Vice President, who were
the two most highly compensated executive officers other than Mr. Mazur serving as executive officers as of September 30, 2023.
General Compensation Process
The Compensation Committee is responsible for determining
the elements and levels of compensation for our Named Executive Officers. In doing so, the Compensation Committee reviews our corporate
performance against financial and corporate achievement measures, assesses individual performance and evaluates recommendations of the
Chief Executive Officer regarding compensation for other Named Executive Officers. Deliberations of the Compensation Committee may occur
within a meeting of the full Board of Directors at which all members of the Compensation Committee are in attendance and the Board of
Directors may take action in such meetings upon the advice of the Compensation Committee Chair and/or its members.
To assist in its deliberations regarding executive
compensation, in fiscal 2018 and again in fiscal 2021 the Compensation Committee directly engaged FW Cook as its compensation consultant.
FW Cook does not undertake any work for us other than its services for the Compensation Committee. The Compensation Committee has determined
that FW Cook is independent and that its services do not raise any conflict of interest with us or any of our executive officers or directors.
In carrying out its work for the Compensation Committee, FW Cook interacts from time to time directly with our management, as it determines
appropriate, regarding its work product prior to presentation to the Compensation Committee in order to confirm alignment with our business
strategy and obtain data or information necessary for its work.
FW Cook reviewed and discussed with the Compensation
Committee competitive market compensation data for consideration when determining different levels and mix of compensation. The Compensation
Committee reviewed publicly available compensation information of executive officers as well as aggregate share usage and dilution of
a peer group of companies within the biotechnology and pharmaceuticals industries. These companies were selected by the Compensation Committee
with FW Cook’s assistance and were similar to the Company in terms of size, business model and state of development.
The peer group consisted of the following companies:
|
● |
Arbutus Biopharma Corporation |
● |
Matinas BioPharma Holdings, Inc. |
|
|
|
|
|
|
● |
Cidara Therapeutics, Inc. |
● |
Novan, Inc. |
|
|
|
|
|
|
● |
ContraFect Corporation |
● |
OpGen, Inc. |
|
|
|
|
|
|
● |
CorMedix Inc. |
● |
Oragenics, Inc. |
|
|
|
|
|
|
● |
Cue Biopharma, Inc. |
● |
Regulus Therapeutics Inc. |
|
|
|
|
|
|
● |
Genocea Biosciences, Inc. |
● |
SCYNEXIS, Inc. |
|
|
|
|
|
|
● |
Heat Biologics, Inc. |
● |
Spero Therapeutics, Inc. |
|
|
|
|
|
|
● |
Hepion Pharmaceuticals, Inc. |
● |
XBiotech Inc. |
|
|
|
|
|
|
● |
HOOKIPA Pharma Inc. |
|
|
The peer company compensation data provided by
FW Cook is used by the Compensation Committee as a general reference point in its compensation review. The Compensation Committee does
not set compensation levels at any specific level or percentile against this compensation data (i.e., the Compensation Committee does
not “benchmark” our executive compensation levels). The peer group data is only one point of information taken into account
by the Compensation Committee in making compensation decisions.
After review and approval by the Compensation Committee
of FW Cook’s recommendations, in August 2021, the Board adopted the Committee’s recommendation for stock option grant guidelines
as well as increases in executive compensation.
Components of Compensation
The key components of our executive compensation
package are cash compensation (salary and annual bonuses), long-term equity incentive awards and change in control provisions in employment
agreements. These components are administered with the goal of providing total compensation that recognizes meaningful differences in
individual performance, is competitive, varies the opportunity based on individual and corporate performance, and is valued by our Named
Executive Officers.
Base Salary
It is the Compensation Committee’s objective
to set a competitive rate of annual base salary for each Named Executive Officer. The Compensation Committee believes competitive base
salaries are necessary to attract and retain top quality executives, since it is common practice for public companies to provide their
named executive officers with a guaranteed annual component of compensation that is not subject to performance risk. The Compensation
Committee, on its own or with outside consultants, namely FW Cook, may establish salary ranges for our Named Executive Officers, with
minimum to maximum opportunities that cover the normal range of market variability. The actual base salary for each Named Executive Officer
is then derived from those salary ranges based on his responsibility, tenure and past performance and market comparability. Annual base
salaries for the Named Executive Officers are reviewed and approved by the Compensation Committee. Changes in base salary are based on
the scope of an individual’s current job responsibilities, individual performance in the previous performance year, target pay position
relative to the peer group, and our salary budget guidelines. The Compensation Committee reviews established goals and objectives, and
determines an individual’s achievement of those goals and objectives and considers the recommendations provided by the Chief Executive
Officer to assist it in determining appropriate salaries for the Named Executive Officers other than the Chief Executive Officer.
The base salary information for our Named Executive
Officers for fiscal 2022 and 2023 is set forth in the Summary Compensation Table below. We entered into an employment agreement with each
of Leonard Mazur, our Chief Executive Officer and Executive Board Chairman, Myron Holubiak, our Executive-Vice Chairman, and Myron S.
Czuczman, M.D., our Chief Medical Officer and Executive Vice President, in October 2017, March 2016, and July 2020, respectively. We entered
into an amended and restated employment agreement with Myron Holubiak on April 12, 2022, effective May 1, 2022. These agreements provide
for a salary for each Named Executive Officer and are described under the caption “Employment Agreements” below.
Annual Bonuses
As part of their compensation package, and pursuant
to the terms of their employment agreements, our Named Executive Officers generally have the opportunity to earn annual non-equity incentive
bonuses. Annual non-equity bonuses are designed to reward superior executive performance while reinforcing our short-term strategic operating
goals. Annual bonus targets as a percentage of salary increase with executive rank so that for the more senior executives, a greater proportion
of their total cash compensation is contingent upon annual performance. Each year the Compensation Committee establishes corporate goals
for our Company in consultation with our Chief Executive Officer, with weights assigned to each goal, depending on the extent to which
each Named Executive Officer is responsible for each specific goal. The extent to which these goals are met will determine the amount
of the non-equity bonus that each Named Executive Officer receives. Pursuant to the terms of their employment agreements, the target award
for each Named Executive Officer is based on a percentage of his base salary, and subject to the applicable terms in his individual employment
agreement. Pursuant to their respective employment agreements, Mr. Mazur, Mr. Holubiak, and Dr. Czuczman are each eligible for an annual
bonus, which may equal up to 50%, 50%, and 35%, respectively, of his base salary then in effect, as determined by our Board or the Compensation
Committee.
For fiscal 2023, the annual non-equity incentive
bonuses for our executive officers were based on the achievement of company goals during fiscal 2023, which were established in December
2022 and related to financing of the Company’s product candidates, market capitalization of the Company, the clinical development
of Mino-Lok, Halo-Lido and Mino-Wrap, and the approval, launch and commercialization of LYMPHIR. These specific goals were evaluated and
selected because they were considered key drivers for creating and growing Company value. For fiscal 2023, Mr. Mazur, Mr. Holubiak and
Dr. Czuczman were potentially entitled to cash bonuses of up to $237,500, $225,000 and $157,500, respectively. Most of the corporate goals
for fiscal 2023 were met to a substantial extent, which resulted in an average of 85% achievement of the goals. Based on this achievement,
the Board approved the following payments of cash compensation: Mr. Mazur, $201,875 (85% of his potential 2023 bonus), Mr. Holubiak, $191,500
(approximately 85%) and Dr. Czuczman, $133,875 (approximately 85%).
Long-Term Incentive Equity Awards
We believe that long-term corporate success is
achieved with an ownership culture that encourages high performance by our employees through the use of stock-based awards. Our 2014 Stock
Incentive Plan, 2018 Omnibus Stock Incentive Plan, 2020 Omnibus Stock Incentive Plan, 2021 Omnibus Stock Incentive Plan and 2023 Omnibus
Stock Incentive Plan were each established to provide our employees, including our Named Executive Officers, with incentives to help align
employees’ interests with the interests of our stockholders. The Compensation Committee believes that the use of stock-based awards
offers the best approach to achieving our compensation goals of incentivizing long-term performance. We have historically elected to use
stock options as the primary long-term equity incentive vehicle; however, the Compensation Committee has the ability under our stock plans
to grant restricted stock and other equity awards as part of our long-term incentive program, although no such awards have been granted
to date. We have selected the Black-Scholes method of valuation for stock-based compensation. Due to the early stage of our business and
our desire to preserve cash, we may provide a greater portion of total compensation to our Named Executive Officers through stock options
or other equity awards than through cash-based compensation. The Compensation Committee generally oversees the administration of our stock
plans. The 2023 Omnibus Stock Incentive Plan is the only plan under which equity grants may be made at this time because all of the shares
reserved under the 2014, 2018, 2020 and 2021 plans have been allocated to outstanding or expired awards.
Stock Options
Our 2023 Omnibus Stock Incentive Plan, as did our
prior plans, authorizes us to grant options to purchase shares of common stock to our employees, directors and consultants.
The Compensation Committee reviews and approves
stock option awards to Named Executive Officers based upon a review of competitive compensation data, an assessment of individual performance,
a review of each Named Executive Officer’s existing long-term incentives, and retention considerations. Periodic stock option grants
are made at the discretion of the Compensation Committee to eligible employees and, in appropriate circumstances, after consideration
of any recommendations of our Chief Executive Officer.
Stock options granted to employees have an exercise
price equal to the fair market value of our common stock on the day of grant, typically vest over a time or upon the achievement of certain
performance-based milestones and are based upon continued employment, and generally expire 10 years after the date of grant. The fair
value of the options granted to the Named Executive Officers and reflected in the Summary Compensation Table is determined in accordance
with the Black-Scholes method of valuation for share-based compensation. Incentive stock options also include certain other terms necessary
to ensure compliance with the Code.
We expect to continue to use stock options as a
long-term incentive vehicle because:
| ● | Stock options align the interests of our Named Executive Officers with those
of our stockholders, supporting a pay-for performance culture, foster employee stock ownership, and focus the management team on increasing
value for our stockholders. |
| | |
| ● | Stock options are performance-based. All of the value received by the recipient
of a stock option is based on the growth of the stock price. In addition, stock options can be issued with vesting based on the achievement
of specified milestones although we have not used such performance-based vesting to date. |
| | |
| ● | Stock options help provide balance to the overall executive compensation
program as base salary and annual bonuses focus on short-term compensation, while stock options focus on long-term compensation. |
| | |
| ● | The vesting period of stock options over time encourages executive retention
and is designed to increase stockholder value. In determining the number of stock options to be granted to our Named Executive Officers,
we take into account the individual’s position, scope of responsibility, ability to affect profits and stockholder value and the
individual’s historic and recent performance and the value of stock options in relation to other elements of the individual Named
Executive Officer’s total compensation. |
Executive Benefits and Perquisites
Our Named Executive Officers, all of whom currently
are parties to employment agreements, will continue to be parties to such agreements in their current form until the expiration or termination
of the employment agreement or until such time as the Compensation Committee determines in its discretion that revisions to such agreements
are advisable. In addition, consistent with our compensation philosophy, we intend to continue to maintain our current benefits for our
Named Executive Officers, including medical, dental and life insurance and the ability to contribute to a 401(k) plan; however, the Compensation
Committee in its discretion may revise, amend or add to the officer’s executive benefits if it deems it advisable. We believe these
benefits are currently comparable to benefit levels for comparable companies.
Pension Benefits
We do not maintain any qualified or non-qualified
defined benefit plans. As a result, none of our Named Executive Officers participate in or have account balances in qualified or non-qualified
defined benefit plans sponsored by us. Our Compensation Committee or Board of Directors may elect to adopt qualified or non-qualified
benefit plans in the future if it determines that doing so is in our best interests.
Nonqualified Deferred Compensation
None of our Named Executive Officers participate
in or have account balances in nonqualified defined contribution plans or other non-qualified deferred compensation plans maintained by
us. Our Compensation Committee or Board of Directors may elect to provide our officers and other employees with non-qualified defined
contribution or other non-qualified deferred compensation benefits in the future if it determines that doing so is in our best interests.
Summary Compensation Table
The following table sets forth information regarding
compensation paid to our Named Executive Officers for the years ended September 30, 2023 and 2022.
Name & Position | |
Fiscal Year | |
Salary | | |
Nonequity
Incentive Plan
Compensation | | |
Option
Awards (1) | | |
All Other
Compensation | | |
Total | |
Leonard Mazur | |
2023 | |
$ | 475,000 | | |
$ | 201,875 | | |
$ | 1,304,238 | (2) | |
| - | | |
$ | 1,981,113 | |
Chief Executive Officer and Executive Chairman | |
2022 | |
$ | 400,000 | | |
$ | 170,000 | | |
$ | 620,056 | (3) | |
| - | | |
$ | 1,190,056 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Myron Holubiak | |
2023 | |
$ | 450,000 | | |
$ | 191,250 | | |
$ | 953,123 | (2) | |
| - | | |
$ | 1,594,373 | |
Executive Vice Chairman | |
2022 | |
$ | 450,000 | | |
$ | 170,000 | | |
$ | 620,056 | (3) | |
| - | | |
$ | 1,240,056 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Myron S. Czuczman, M.D. (5) | |
2023 | |
$ | 437,500 | | |
$ | 133,875 | | |
$ | 599,127 | (2) | |
| - | | |
$ | 1,170,502 | |
Chief Medical Officer and Executive Vice President | |
2022 | |
$ | 400,000 | | |
$ | 150,000 | | |
$ | 336,929 | (3) | |
$ | 917 | (4) | |
$ | 887,846 | |
(1) | The dollar amount set forth in the table above represents the dollar amount recognized for financial statement reporting purposes
for all options granted to the executive officer with respect to the fiscal year in accordance with FASB ASC Topic 718. |
(2) | The option awards for 2023 include options to purchase shares of common stock of our wholly owned subsidiary Citius Oncology, Inc.,
the value of which was $508,750 for Mr. Mazur, $206,250 for Mr. Holubiak and $192,500 for Dr. Czuczman. |
(3) | The option awards for 2022 include options to purchase shares of common stock of our majority owned subsidiary NoveCite, Inc., the
value of which was $17,700 for each of Mr. Mazur and Mr. Holubiak and $11,800 for Dr. Czuczman. |
(4) | Health insurance premiums paid by the Company. |
Outstanding Equity Awards at Fiscal Year-End 2023
The following table contains certain information concerning unexercised
options for our executive officers as of September 30, 2023.
Name (a) | |
Number of Securities Underlying Unexercised Options Exercisable (b) | | |
Number of Securities Underlying Unexercised Options Unexercisable (c) | | |
Option Exercise Price (e) | | |
Option Expiration Date (f) |
Leonard Mazur | |
| 220,000 | | |
| -- | | |
$ | 6.75 | | |
9/12/2024 |
Chief Executive Officer and Executive Chairman | |
| 40,000 | | |
| -- | | |
$ | 3.45 | | |
9/13/2027 |
| |
| 150,000 | | |
| -- | | |
$ | 1.62 | | |
9/04/2028 |
| |
| 175,000 | | |
| -- | | |
$ | 0.67 | | |
10/08/2029 |
| |
| 200,000 | | |
| -- | | |
$ | 1.01 | | |
10/06/2030 |
| |
| 200,000 | | |
| 100,000 | | |
$ | 2.00 | | |
7/22/2031 |
| |
| 433,333 | | |
| 216,667 | | |
$ | 2.04 | | |
10/11/2031 |
| |
| 183,333 | | |
| 366,667 | | |
$ | 1.25 | | |
10/4/2032 |
| |
| -- | | |
| 550,000 | | |
$ | 0.70 | | |
10/10/2033 |
| |
| | | |
| | | |
| | | |
|
Myron Holubiak | |
| 26,667 | | |
| -- | | |
$ | 8.10 | | |
10/01/2025 |
Executive Vice Chairman | |
| 40,000 | | |
| -- | | |
$ | 3.45 | | |
9/13/2027 |
| |
| 150,000 | | |
| -- | | |
$ | 1.62 | | |
9/04/2028 |
| |
| 175,000 | | |
| -- | | |
$ | 0.67 | | |
10/08/2029 |
| |
| 200,000 | | |
| -- | | |
$ | 1.01 | | |
10/06/2030 |
| |
| 200,000 | | |
| 100,000 | | |
$ | 2.00 | | |
7/22/2031 |
| |
| 433,333 | | |
| 216,667 | | |
$ | 2.04 | | |
10/11/2031 |
| |
| 133,333 | | |
| 266,667 | | |
$ | 1.25 | | |
10/4/2032 |
| |
| -- | | |
| 400,000 | | |
$ | 0.70 | | |
10/10/2033 |
| |
| | | |
| | | |
| | | |
|
Myron S. Czuczman, M.D. | |
| 500,000 | | |
| -- | | |
$ | 1.19 | | |
7/14/2030 |
Chief Medical Officer and Executive Vice President | |
| 200,000 | | |
| 100,000 | | |
$ | 2.04 | | |
10/11/2031 |
| |
| 100,000 | | |
| 200,000 | | |
$ | 1.25 | | |
10/04/2032 |
| |
| -- | | |
| 300,000 | | |
$ | 0.70 | | |
10/10/2033 |
Option Repricings
We did not engage in any repricings or other modifications to any of
our executive officers’ outstanding options during the year ended September 30, 2023.
Pay Versus Performance
As required by Section 953(a) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the
relationship between executive compensation actually paid and certain financial performance of our Company for each of the last two completed
fiscal years. In determining the “compensation actually paid” to our Named Executive Officers, we are required to make various
adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation
methods for this section differ from those required in the Summary Compensation Table. The table below summarizes compensation values
both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section for the 2022 and 2023
fiscal years. Note that for our Named Executive Officers other than our CEO, or principal executive officer (“PEO”), compensation
is reported as an average.
|
| |
Leonard Mazur (“PEO”) (1) | | |
Myron Holubiak (“Former PEO”) (1) | | |
| | |
| | |
Value of
Initial
Fixed $100 | | |
| |
Year |
| |
Summary
Compensation
Table Total for PEO (2) | | |
Compensation
Actually Paid to PEO (3) | | |
Summary
Compensation
Table Total
for Former
PEO (2) | | |
Compensation
Actually Paid
to Former
PEO (3) | | |
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs(4) | | |
Average
Compensation
Actually Paid
to Non- PEO
NEOs(5) | | |
Investment
Based On
Total
Shareholder
Return
(“TSR”)(6) | | |
Net Income
(Loss)(7) | |
2023 |
| |
$ | 1,981,113 | | |
$ | 6,286,648 | | |
$ | 1,594,373 | | |
$ | 2,657,348 | | |
$ | 1,382,438 | | |
$ | 2,753,342 | | |
$ | 33.69 | | |
$ | (33,694,120 | ) |
2022 |
| |
$ | 1,190,056 | | |
$ | 479,349 | | |
$ | 1,240,056 | | |
$ | 529,349 | | |
$ | 848,424 | | |
$ | 405,779 | | |
$ | 59.61 | | |
$ | (33,640,646 | ) |
(1) | Myron Holubiak was our PEO from October 1, 2021 until Leonard Mazur’s appointment to be our PEO, effective on May 1, 2022. |
(2) | Represents the amounts of total compensation reported for our PEO and Former PEO during for each corresponding year in the “Total”
column of the Summary Compensation Table above or the Summary Compensation Table included in our definitive proxy statement filed with
the SEC on December 22, 2022, as applicable. |
(3) | Represents the amount of “compensation actually paid” to our PEO and Former PEO, as computed in accordance with Item 402(v)
of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to our PEO and Former PEO during
the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made our PEO
and Former PEO’s total compensation for each year to determine the compensation actually paid: |
| |
Year | |
Reported Summary Compensation Table Total for PEO ($) | | |
Reported Value of Option Awards (a)(b)($) | | |
Equity Award Adjustments (b)($) | | |
Compensation Actually Paid to PEO ($) | |
Leonard
Mazur
| |
2023 | |
$ | 1,981,113 | | |
$ | (1,304,238 | ) | |
$ | 5,609,773 | | |
$ | 6,286,648 | |
PEO | |
2022 | |
$ | 1,190,056 | | |
$ | (620,056 | ) | |
$ | (90,651 | ) | |
$ | 479,349 | |
Myron Holubiak
| |
2023 | |
$ | 1,594,373 | | |
$ | (953,123 | ) | |
$ | 2,016,097 | | |
$ | 2,657,348 | |
Former PEO | |
2022 | |
$ | 1,240,056 | | |
$ | (620,056 | ) | |
$ | (90,651 | ) | |
$ | 529,349 | |
(a) | The grant date fair value of equity awards represents the
total of the amounts reported in the “Option Awards” columns in the Summary Compensation Table for the applicable year. |
(b) | In order to calculate the average compensation “actually
paid” to our PEO and Former PEO, we are required under the SEC rules to subtract from the value in the Summary Compensation Table
the grant date fair value of equity awards, and add back the following: (i) the year-end fair value of any equity awards granted in the
applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable
year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as
of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting
date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date
(from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the
applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior
fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior
to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation
for the applicable year. The amounts deducted or added in calculating the equity award adjustments are as follows: |
| |
Year | | |
Year End
Fair Value of
Outstanding
and Unvested
Equity
Awards
Granted in
the Year ($) | | |
Year over
Year Change
in Fair
Value of
Outstanding
and Unvested
Equity
Awards
Granted in
Prior Years ($) | | |
Fair
Value as
of Vesting
Date of
Equity
Awards
Granted
and
Vested in
the Year ($) | | |
Change
in Fair Value
as of the Vesting
Date from
Prior Year
End of Equity
Awards
Granted
in Prior
Years
that Vested
in the Year
($) | | |
Fair Value
at the End
of the
Prior Year
of Equity
Awards
that Failed
to Meet
Vesting
Conditions
in the Year ($) | | |
Value of
Dividends or
other
Earnings
Paid on
Stock or
Option
Awards not
Otherwise
Reflected in
Fair Value
or Total
Compensation ($) | | |
Total Equity Award Adjustments ($) | |
Leonard | |
2023 | | |
$ | 6,171,119 | | |
$ | (567,880 | ) | |
| - | | |
$ | 6,533 | | |
| -- | | |
| - | | |
$ | 5,609,773 | |
Mazur PEO | |
2022 | | |
$ | 521,643 | | |
$ | (612,295 | ) | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
$ | (90,651 | ) |
Myron Holubiak | |
2023 | | |
$ | 2,577,444 | | |
$ | (567,880 | ) | |
| -- | | |
$ | 6,533 | | |
| -- | | |
| -- | | |
$ | 2,016,097 | |
Former PEO | |
2022 | | |
$ | 521,643 | | |
$ | (612,295 | ) | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
$ | (90,651 | ) |
(4) | Represents the average of the amounts reported for our NEOs
as a group (excluding our PEO and our Former PEO) in each applicable year in the “Total” column of the Summary Compensation
Table above or the Summary Compensation Table included in our definitive proxy statement filed with the SEC on December 22, 2022, as
applicable, which includes for 2023, Mr. Holubiak and Dr. Czuczman, and for 2022, Mr. Bartushak and Dr. Czuczman (the “Non-PEO
NEOs”). |
(5) | Represents the average amount of “compensation actually
paid” to the Non-PEO NEOs, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not
reflect the actual average amount of compensation earned by or paid to the Non-PEO NEOs during the applicable year. In accordance with
the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for
the Non-PEO NEOs for each year to determine the compensation actually paid, using the same methodology described above in Note (2): |
Year | |
Average Reported
Summary
Compensation
Table Total
for Non-PEO
NEOs ($) | | |
Average Reported Value of
Equity
Awards ($) | | |
Average Equity Award
Adjustments(a) ($) | | |
Average Compensation Actually Paid to Non-PEO
NEOs ($) | |
2023 | |
$ | 1,382,438 | | |
$ | (776,125 | ) | |
$ | 2,147,029 | | |
$ | 2,753,342 | |
2022 | |
$ | 848,424 | | |
$ | (308,982 | ) | |
$ | (133,663 | ) | |
$ | 405,779 | |
(a) |
The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Year | |
Year End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year ($) | | |
Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years ($) | | |
Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | | |
Year over Year Change in Fair
Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | | |
Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | | |
Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | | |
Total Equity Award Adjustments ($) | |
2023 | |
$ | 2,475,862 | | |
$ | (330,700 | ) | |
| -- | | |
$ | 1,867 | | |
| -- | | |
| -- | | |
$ | 2,147,029 | |
2022 | |
$ | 240,758 | | |
$ | (374,422 | ) | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
$ | (133,663 | ) |
(6) | TSR is cumulative for the measurement periods beginning on
September 30, 2021 and ending on September 30 for each of 2023 and 2022, respectively, calculated by dividing the difference between
our Company’s share price at the end and the beginning of the measurement period by our company’s share price at the beginning
of the measurement period. No dividends were paid in 2022 or 2023. |
(7) | The dollar amounts reported represent the amount of net income
(loss) reflected in our consolidated audited financial statements for the applicable year. |
Analysis of the Information Presented in the Pay Versus Performance
Table
We generally seek to incentivize long-term performance,
and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance
with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following
descriptions of the relationships between information presented in the Pay Versus Performance table.
Compensation Actually Paid and Net Income (Loss)
Because we are not a commercial-stage company,
we did not have any revenue during the periods presented. Consequently, our company has not historically looked to net income (loss) as
a performance measure for our executive compensation program. In 2022 and 2023, our net income (loss) has generally remained flat, but
the compensation actually paid for both our PEO and non-PEO NEOs increased between 2022 and 2023.
Compensation Actually Paid and Cumulative TSR
As shown in the following graph, the compensation
actually paid to our PEO and Former PEO and the average amount of compensation actually paid to our Non-PEO NEOs during the periods presented
are not directly correlated with TSR. We do utilize several performance measures to align executive compensation with our performance,
but those tend not to be financial performance measures, such as TSR. For example, as described in more detail above in the section “Narrative
to Summary Compensation Table – Cash Bonuses” part of the compensation our NEOs are eligible to receive consists of annual
performance-based cash bonuses which are designed to provide appropriate incentives to achieve defined annual corporate goals and to reward
our executives for individual achievement towards these goals, subject to certain other criteria as described above under “-Employment
and Other Contracts.” Additionally, we view stock options, which are an integral part of our executive compensation program, as
related to company performance although not directly tied to TSR, because they provide value only if the market price of our common stock
increases, and if the executive officer continues in our employment over the vesting period. These stock option awards strongly align
our executive officers’ interests with those of our stockholders by providing a continuing financial incentive to maximize long-term
value for our stockholders and by encouraging our executive officers to continue in our employment for the long-term.
All information provided above under the “Pay
Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our company under the Securities
Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such
filing.
Employment Agreements
Leonard Mazur
On October 19, 2017, the Company and Leonard L.
Mazur, the Company’s Executive Chairman and Secretary of the Company’s Board of Directors, entered into an Amended and Restated
Employment Agreement (the “Mazur Employment Agreement”) with the following terms:
Compensation and Benefits. In exchange for
his services with the Company, Mr. Mazur will receive an annual salary of $250,000, subject to later adjustment by the Board, and will
be eligible for an annual bonus of up to 50% of his annual salary. Mr. Mazur’s bonus will be based on his attainment of certain
financial, clinical development and business milestones, as established annually by the Board. Mr. Mazur will also be entitled to participate
in any benefit plans that the Company may from time to time establish and have in effect for all or most of its senior executives.
On November 20, 2020, the Company’s Compensation
Committee approved an increase to Mr. Mazur’s annual salary to $375,000, effective January 1, 2021. Mr. Mazur’s annual salary
was increased to $400,000, effective August 1, 2021. This increase was made upon the recommendation of FW Cook. Effective October 1, 2022,
Mr. Mazur’s salary was increased to $475,000 in recognition of his duties as Chief Executive Officer, which position he assumed
on May 1, 2022.
Term and Termination. The Mazur Employment
Agreement has an initial three-year initial term that ended on October 19, 2020, but which will automatically renew for additional one-year
terms unless terminated by the Company or by Mr. Mazur. Pursuant to this provision, the Mazur Employment Agreement has been extended for
an additional one-year period, most recently on October 19, 2023. If the Company terminates Mr. Mazur’s employment for Cause or
if Mr. Mazur resigns without Good Reason (as such terms are defined in the Mazur Employment Agreement), he will be entitled only to payment
of his accrued compensation as of such date. If the Company terminates Mr. Mazur’s employment without Cause or Mr. Mazur resigns
for Good Reason, then conditioned upon Mr. Mazur executing a release following such termination, Mr. Mazur will continue to receive his
annual salary and certain benefits for a period of 12 months following the effective date of the termination of his employment. In addition,
the portion of Mr. Mazur’s unvested options to purchase shares of the Company’s common stock that would have vested at the
next immediate vesting event following his termination date will vest and become immediately exercisable upon his termination date. In
the event Mr. Mazur is terminated under either of these circumstances within 90 days prior to a Change of Control (as defined in the Mazur
Employment Agreement) or within two years following a Change of Control, Mr. Mazur will receive a lump sum payment for 18 months’
salary, continue to receive benefits for a period of 18 months, and all of Mr. Mazur’s unvested Company stock options will vest
and become immediately exercisable.
If Mr. Mazur’s employment is relieved during
a period of Disability(as defined in the Mazur Employment Agreement), notwithstanding any removal or reassignment, he will continue to
receive his full salary, subject to certain adjustments that may apply, for up to 90 consecutive days or 180 days in the aggregate during
any consecutive 12-month period.
Appointment to Board of Directors. In connection
with Mr. Mazur’s employment, the Company agrees to use its best efforts to cause Mr. Mazur to be elected as a member of the Board
and to include him in management’s slate of nominees for election to the Board at every stockholders meeting during the term of
the Mazur Employment Agreement at which Mr. Mazur’s term as a director would otherwise expire. In addition, Mr. Mazur agrees to
accept election, and to serve during the term of the Mazur Employment Agreement, as a member of the Board without any compensation other
than as specified in the Mazur Employment Agreement.
Covenants. The Mazur Employment Agreement
also includes certain non-competition and non-solicitation of customer and employee restrictions during Mr. Mazur’s employment and
for a period of nine months and 24 months, respectively, following any termination of employment, in addition to other customary terms,
including provisions covering confidentiality and return of Company property.
Myron Holubiak
On March 30, 2016, in connection with the merger
by and among the Company, Citius LMB Acquisition Corp. and LMB, the Company’s Board of Directors appointed Myron Holubiak to serve
as the Chief Executive Officer of the Company and entered into an Employment Agreement (the “Holubiak Employment Agreement”).
The Holubiak Employment Agreement was amended and restated effective as of May 1, 2022, with the following terms:
Compensation and Benefits. In exchange for
his services as Executive Vice Chairman of the Company, Mr. Holubiak will receive an annual salary of $450,000, subject to later adjustment
by the Board, and will be eligible for an annual bonus of up to 50% of his annual salary. Mr. Holubiak’s bonus will be based on
his attainment of certain financial, clinical development and business milestones, as established annually by the Board. Mr. Holubiak
will also be entitled to participate in any benefit plans that the Company may from time to time establish and have in effect for all
or most of its senior executives.
Term and Termination. The Holubiak Employment
Agreement has an 18-month initial term, and automatically renews for additional one-year terms unless terminated by the Company or by
Mr. Holubiak. If the Company terminates Mr. Holubiak’s employment for Cause or if Mr. Holubiak resigns without Good Reason (as such
terms are defined in the Holubiak Employment Agreement), he will be entitled only to payment of his accrued compensation as of such date.
If Mr. Holubiak’s employment is terminated as a result of his Disability (as defined in the Holubiak Employment Agreement), if the
Company terminates Mr. Holubiak’s employment without Cause or if Mr. Holubiak resigns for Good Reason, then conditioned upon Mr.
Holubiak executing a release following such termination, Mr. Holubiak will continue to receive his annual salary and certain benefits
for the remaining period of the then-current term or a period of six months following the effective date of the termination of his employment,
whichever is longer. In the event Mr. Holubiak is terminated in connection with a Change of Control (as defined in the Holubiak Employment
Agreement) or within six months following a Change of Control, Mr. Holubiak will receive a lump sum payment equal to his base salary due
for the remainder of the then-current term, his full annual bonus, and continue to receive benefits for the remainder of the then-current
term.
Covenants. The Holubiak Employment Agreement
also includes certain non-competition and non-solicitation of customer and employee restrictions during Mr. Holubiak’s employment
and for a period of 12 months following any termination of employment, in addition to other customary terms, including provisions covering
confidentiality and assignment of inventions.
Myron S. Czuczman, M.D.
On July 14, 2020, Myron Czuczman was hired to serve
as the Chief Medical Officer and Executive Vice President of the Company and entered into an Employment Agreement (the “Czuczman
Employment Agreement”) with the following terms:
Compensation and Benefits. In exchange
for his services with the Company, Dr. Czuczman will receive an annual base salary of $400,000, subject to later adjustment by the Board,
and will be eligible for an annual bonus of up to 35% of his annual salary. Dr. Czuczman’s bonus will be based on his attainment
of certain financial, clinical development and business milestones, as established annually by the Board. Dr. Czuczman will also be entitled
to participate in any benefit plans that the Company may from time to time establish and have in effect for all or most of its senior
executives. Effective January 1, 2023, Dr. Czuczman’s salary was increased to $450,000.
Term and Termination. Under the Czuczman
Employment Agreement, Dr. Czuczman’s employment will be at will and continue until terminated by either party. If the Company terminates
Dr. Czuczman’s employment for Cause or if Dr. Czuczman resigns without Good Reason (as such terms are defined in the Czuczman Employment
Agreement), he will be entitled only to payment of his accrued compensation as of such date. If the Company terminates Dr. Czuczman’s
employment without Cause or Dr. Czuczman resigns for Good Reason, then conditioned upon Dr. Czuczman executing a release following such
termination, Dr. Czuczman will continue to receive his annual salary and certain benefits for a period of 12 months following the effective
date of the termination of his employment and his annual bonus prorated based on the date of termination. The definition of Good Reason
includes any “Change in Control”, which is defined as including the sale of substantially all the assets of the Company, any
merger, consolidation or acquisition of the Company by or into another party, entity or person, and or any change in the ownership of
more than 50% of the voting capital stock of the Company in one or more related transactions.
Covenants. The Czuczman Employment Agreement
also includes certain non-competition and non-solicitation of customer and employee restrictions during Dr. Czuczman’s employment
and for a period of six months following any termination of employment, in addition to other customary terms, including provisions covering
confidentiality and assignment of inventions.
AUDITOR AND AUDIT COMMITTEE MATTERS
Report of the Audit and Risk Committee
The Audit and Risk Committee has reviewed and discussed
with management our audited financial statements for the fiscal year ended September 30, 2023, which were audited by Wolf & Company,
P.C. (“Wolf”), an independent registered public accounting firm. The Audit and Risk Committee discussed with Wolf the matters
required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the
Commission. The Audit and Risk Committee received the written disclosures and letter from the independent registered public accounting
firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications
with the Audit and Risk Committee concerning independence, and discussed with the independent registered public accounting firm the independent
registered public accounting firm’s independence. The Audit and Risk Committee also considered whether the provision of services
other than the audit of our financial statements for the fiscal year ended September 30, 2023 were compatible with maintaining the independence
of Wolf.
Based on the review and discussions referred to
in the foregoing paragraph, the Audit and Risk Committee recommended to the Board of Directors that the audited financial statements be
included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 for filing with the SEC.
Our Audit and Risk Committee
is currently composed of the following three directors: Mr. McGrath (Chair), Mr. Dutia, and Ms. Webb. All are independent directors as
defined in Rules 5605(a)(2) and 5605(c)(2) of the Nasdaq Listing Rules and Section 10A-3 of the Exchange Act. The Board of Directors has
determined that Messrs. McGrath and Dutia are each an “audit committee financial expert” as such term is defined in Item 407(d)(5)(ii)
of Regulation S-K promulgated by the SEC. Our Audit and Risk Committee operates under a written charter adopted by the board, a copy of
which is available under Investor Relations—Governance section of our website at www.citiuspharma.com.
Wolf has served as our
auditor since 2014 and audited our consolidated financial statements for the years ended September 30, 2014 through September 30, 2023.
THE AUDIT AND RISK COMMITTEE
Dennis McGrath, Chair
Suren Dutia
Carol Webb
Fees Paid to the Independent Registered Public Accounting Firm
Audit Fees
The aggregate audit fees billed for professional
services rendered by our auditor, Wolf, an independent registered public accounting firm, for the audit of our financial statements as
of and for the years ended September 30, 2023 and 2022, our filings with the SEC and other audit fees were $160,000 and $141,000, respectively.
Audit Related Fees
The aggregate audit related fees billed for professional
services by Wolf for the years ended September 30, 2023 and 2022 were $3,000 and $0, respectively.
Tax Fees
The aggregate tax fees billed for professional
services by Wolf for the years ended September 30, 2023 and 2022 were $24,000 and $18,800, respectively. Tax fees are for the preparation
of federal and state income tax returns.
All Other Fees
No other fees were billed by or paid to Wolf during
the years ended September 30, 2023 and 2022.
Pre-Approval Policies and Procedures of Audit and Non-Audit Services
of Independent Registered Public Accounting Firm
All fees reported above under the headings Audit
Fees, Audit Related Fees, Tax Fees and All Other Fees were approved by the Audit and Risk Committee before the respective services were
rendered, which concluded that the provision of such services was compatible with the maintenance of the independence of Wolf in the conduct
of its auditing functions.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Other than as set forth
below, there were no transactions since October 1, 2021 to which Citius was or is a party in which:
| ● | the
amount involved exceeded or exceeds the lesser of (i) $120,000 and (ii) one percent of the average of our total assets at year end for
the last two completed fiscal years; and |
| ● | any
of our directors or executive officers, any holder of 5% of our capital stock or any member of their immediate family had or will have
a direct or indirect material interest. |
Warrant Extension
In August 2023, we extended
the term by one year to August 14, 2024 for an aggregate of 3,921,569 warrants with an exercise price of $1.15 per share of common stock.
The warrants are held by Leonard Mazur, the Company’s Chief Executive Officer and Chairman of the Board of Directors, and Myron
Holubiak, the Company’s Executive Vice President and a member of the Board of Directors, and were originally issued in August 2018
in a private placement conducted simultaneously with a registered direct offering of shares of common stock (the “2018 Offering”)
managed by H. C. Wainwright & Co., LLC (“Wainwright”). Mr. Mazur and Mr. Holubiak participated in the private placement
on the same basis as all other investors. Additionally, 189,412 placement agent warrants with an exercise price of $1.5938 per share issued
in connection with the 2018 Offering were extended by one year to August 8, 2024. Such placement agent warrants are held by certain representatives
of Wainwright. There are no other warrants remaining outstanding from the 2018 Offering and if such warrants are fully exercised, the
Company would receive $4,811,680 in cash proceeds.
Procedures for Review and Approval of Transactions with Related
Persons
Pursuant to the Audit and Risk Committee charter,
the Audit and Risk Committee is responsible for reviewing and approving all related party transactions as defined under Item 404 of Regulation
S-K, after reviewing each such transaction for potential conflicts of interests and other improprieties. Our policies and procedures for
review and approval of transactions with related persons are in writing in our Code of Conduct and Ethics available under the Investors—Governance—Governance
Documents section of our website at www.citiuspharma.com.
STOCKHOLDER COMMUNICATIONS
Stockholders may send any communications regarding
our Company’s business to the Board in care of our Corporate Secretary at our principal executive offices located at 11 Commerce
Drive, First Floor, Cranford, New Jersey 07016. The Secretary will forward all such communications to the addressee.
DEADLINE FOR STOCKHOLDER PROPOSALS FOR 2025
ANNUAL MEETING
Stockholders may present proposals
for action at meetings of stockholders only if they comply with the proxy rules established by the SEC and applicable Nevada law. We have
not received any stockholder proposals for consideration at our 2024 Annual Meeting of Stockholders.
Under SEC Rule 14a-8, in order
for a stockholder proposal to be included in our proxy solicitation materials for the 2025 Annual Meeting of stockholders, it must be
delivered to our principal executive offices located at Corporate Secretary, Citius Pharmaceuticals, Inc., 11 Commerce Drive, First Floor,
Cranford, New Jersey 07016 by September 28, 2024; however, if the date of the 2025 annual meeting of stockholders is changed by more than
30 days from the date of the first anniversary of the 2024 Annual Meeting, then the deadline is a reasonable time before we begin to print
and mail our proxy statement for the 2025 Annual Meeting of stockholders.
In addition, our bylaws require
that we be given advance notice of stockholder nominations for election to the Board of Directors and of other matters that stockholders
wish to present for action at an annual meeting of stockholders, other than matters included in our proxy statement. Under our bylaws,
stockholder proposals to be considered at our next Annual Meeting, including nominees for director, must be received by us not more than
90 days and not less than 60 days before the Annual Meeting. All submissions must comply with all of the requirements of our bylaws and
Rule 14a-8 of the Exchange Act.
In addition to satisfying
the foregoing requirements under our bylaws, to comply with the “universal proxy rules,” stockholders who intend to solicit
proxies in support of director nominees at the 2025 Annual Meeting and who are not nominating directors through proxy access as described
above must include the additional information required by Rule 14a-19(b) under the 1934 Act by January 11, 2025. If the
date of the 2025 Annual Meeting has changed by more than 30 calendar days from the 2024 Annual Meeting, then notice must be provided by
the later of 60 calendar days prior to the date of the 2025 Annual Meeting or the 10th calendar day following the day on which public
announcement of the date of the 2025 Annual Meeting is first made by the Company.
Management’s proxy holders
for the 2025 Annual Meeting of stockholders will have discretion to vote proxies given to them on any stockholder proposal of which our
Company does not have notice prior to December 12, 2024.
DELIVERY OF DOCUMENTS TO
STOCKHOLDERS SHARING AN ADDRESS
The SEC has adopted rules that permit companies
to deliver a single copy of proxy materials to multiple stockholders sharing an address unless a company has received contrary instructions
from one or more of the stockholders at that address. Upon request, we will promptly deliver a separate copy of proxy materials to one
or more stockholders at a shared address to which a single copy of proxy materials was delivered. Stockholders may request a separate
copy of proxy materials by contacting us either by calling (908) 967-6677 or by mailing a request to 11 Commerce Drive, First Floor, Cranford,
New Jersey 07016. Stockholders at a shared address who receive multiple copies of proxy materials may request to receive or a single copy
of proxy materials in the future in the same manner as described above.
ANNUAL REPORT ON FORM 10-K
Our Annual Report on Form 10-K for the fiscal year
ended September 30, 2023 as filed with the SEC is accessible free of charge on the SEC’s website at www.sec.gov. It contains audited
financial statements covering the fiscal years ended September 30, 2023 and 2022. You can request a copy of our Annual Report on Form
10-K free of charge by calling (908) 967-6677 or by mailing a request to our Corporate Secretary, 11 Commerce Drive, First Floor, Cranford,
New Jersey 07016. Please include your contact information with the request.
OTHER MATTERS
The Board of Directors knows of no other matters
that will be presented for consideration at the Annual Meeting, but if other matters properly come before the meeting, the persons named
as proxies in the proxy will vote according to their best judgment. Stockholders are requested to vote promptly via the Internet, by telephone
or by mail. If you attend the Annual Meeting, you may revoke your proxy at that time and vote in person, if you wish. Otherwise, your
proxy will be voted for you.
|
By Order of the Board of Directors |
|
|
|
/s/ Leonard Mazur |
|
Director, Chief Executive Officer and Chairman |
DIRECTIONS TO CITIUS PHARMACEUTICALS, INC.
2024 ANNUAL MEETING
AT
11 COMMERCE DRIVE, FIRST FLOOR
CRANFORD, NEW JERSEY 07016
From New York City:
Any Hudson River Crossing to the New Jersey Turnpike South to Route
78 West. From Route 78 West take Exit 52, the Garden State Parkway South to Exit 136 (Linden, Roselle, and Winfield Park). Follow to Centennial
Avenue and then Commerce Drive. 11 Commerce Drive is marked accordingly.
From North of Newark:
Take the Garden State Parkway South to Exit 136 (Linden, Roselle, and
Winfield Park). Follow to Centennial Avenue and then Commerce Drive. 11 Commerce Drive is marked accordingly.
From South of Newark:
Take the Garden State Parkway North to Exit 136 (Linden, Roselle, and
Winfield Park). Follow to Centennial Avenue and then Commerce Drive. 11 Commerce Drive is marked accordingly.
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