Citius Pharmaceuticals (CTXR) S-1/A 13 Jul 17 IPO registration (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2017	Dec. 01, 2016
Document And Entity Information
Entity Registrant Name	Citius Pharmaceuticals, Inc.
Entity Central Index Key	1,506,251
Document Type	S1
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		74,113,060
Document Fiscal Year Focus	2,017

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015
Current Assets
Cash and cash equivalents	$ 61,110	$ 294,351	$ 676,137
Prepaid expenses	282,136	598,484	60,000
Total Current Assets	343,246	892,835	736,137
Property and Equipment, Net of Accumulated Depreciation of $4,780	2,399	3,742
Other Assets
Trademarks			5,401
Deposits	2,167	2,167
Deferred offering costs		64,801
In-process research and development	19,400,000	19,400,000
Goodwill	1,586,796	1,586,796
Total Other Assets	20,988,963	21,053,764	5,401
Total Assets	21,334,608	21,950,341	741,538
Current liabilities:
Accounts payable	1,862,940	909,156	559,150
Accrued expenses	1,856,372	958,101	8,260
Accrued compensation	1,082,365	903,250
Accrued interest	63,950	30,871
Notes payable - related parties	2,022,970	672,970
Derivative warrant liability	426,264	1,681,973	738,955
Due to related party	27,637	27,637	70,386
Total Current Liabilities	7,342,498	5,183,958	1,376,751
Commitments and contingencies
Stockholders' Equity (Deficit)
Preferred stock - $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Common stock - $0.001 par value; 200,000,000 shares authorized; 4,875,871 and 2,274,526 shares issued and outstanding at September 30, 2016 and 2015, respectively	5,034	4,876	2,275
Additional paid-in capital	36,242,584	34,097,754	8,403,061
Accumulated deficit	(22,255,508)	(17,336,247)	(9,040,549)
Total Stockholders' Equity (Deficit)	13,992,110	16,766,383	(635,213)
Total Liabilities and Stockholders' Equity (Deficit)	$ 21,334,608	$ 21,950,341	$ 741,538

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015
ASSETS
Property and Equipment, Net of Accumulated Depreciation	$ 6,123	$ 4,780
Stockholders' Equity (Deficit)
Preferred Stock Par Value	$ 0.001	$ 0.001	$ 0.001
Preferred Stock Shares Authorized	10,000,000	10,000,000	10,000,000
Preferred Stock Shares Issued	0	0	0
Preferred Stock Shares Outstanding	0	0	0
Common Stock Par Value	$ 0.001	$ 0.001	$ 0.001
Common Stock Shares Authorized	200,000,000	200,000,000	200,000,000
Common Stock Shares Issued	5,033,616	4,875,871	2,274,526
Common Stock Shares Outstanding	5,033,616	4,875,871	2,274,526

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended	12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Operations
Revenues
Operating Expenses
Research and development	859,915	(200,300)	2,271,074	628,856	574	2,933,199	1,797,045
General and administrative	1,383,771	756,297	2,515,954	1,050,518	183,044	3,783,941	946,613
Stock-based compensation - general and administrative	300,030	115,614	541,544	236,913	470,185	732,151	486,271
Total Operating Expenses	2,543,716	671,611	5,328,572	1,916,287	653,803	7,449,291	3,229,929
Operating Loss	(2,543,716)	(671,611)	(5,328,572)	(1,916,287)	(653,803)	(7,449,291)	(3,229,929)
Other Income (Expense), Net:
Interest income		3		18	555	806	3,066
Gain (loss) on revaluation of derivative warrant liability	(179,796)	(197,846)	442,390	(173,906)	8,588	(838,219)	332,095
Interest expense	(19,851)		(33,079)		(93,067)	(8,994)	(7,500)
Total Other Income (Expense), Net	(199,647)	(197,843)	409,311	(173,888)	(83,924)	(846,407)	327,661
Loss before Income Taxes	(2,743,363)	(869,454)	(4,919,261)	(2,090,175)	(737,727)	(8,295,698)	(2,902,268)
Income tax benefit
Net Loss	$ (2,743,363)	$ (869,454)	$ (4,919,261)	$ (2,090,175)	$ (737,727)	$ (8,295,698)	$ (2,902,268)
Net Loss Per Share - Basic and Diluted	$ (0.55)	$ (0.35)	$ (0.99)	$ (0.88)	$ (0.57)	$ (2.29)	$ (1.37)
Weighted Average Common Shares Outstanding Basic and diluted	4,993,454	2,482,895	4,947,945	2,388,098	1,288,147	3,623,208	2,122,363

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended		9 Months Ended	12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015
Cash Flows From Operating Activities:
Net loss	$ (4,919,261)	$ (2,090,175)	$ (737,727)	$ (8,295,698)	$ (2,902,268)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt issuance costs			14,000
Stock-based compensation	541,544	236,913	470,185	732,151	486,271
(Gain) loss on revaluation of derivative warrant liability	(442,390)	173,906	(8,588)	838,219	(332,095)
Stock issued for services	298,774	90,000		150,000
Depreciation	1,343			1,343
Loss on abandoned trademarks				5,401
Changes in operating assets and liabilities, net of effect of acquired business:
Prepaid expenses	316,348	60,000	9,174	(40,759)	(60,000)
Accounts payable	953,784	(437,232)	(66,320)	105,230	452,981
Accrued expenses	898,271	396,825	56,764	351,182	(52,057)
Accrued compensation	179,115			288,250
Accrued interest	33,079		79,067	7,009	7,500
Due to related party		(1,775)	281	(42,749)	14,252
Net Cash Used In Operating Activities	(2,139,393)	(1,571,538)	(183,164)	(5,900,421)	(2,385,416)
Cash Flows From Investing Activities:
Cash acquired in acquisition		255,748		255,748
Net Cash Used In Investing Activities		255,748		255,748
Cash Flows From Financing Activities:
Proceeds from notes payable - related parties	1,350,000
Proceeds from notes payable				500,000
Repayment of notes payable				(600,000)
Proceeds from issuance of common stock			50,000
Net proceeds from private placement	556,152	4,398,688	1,630,834	5,427,688	1,509,493
Deferred offering costs				(64,801)
Net Cash Provided by Financing Activities	1,906,152	4,398,688	1,680,834	5,262,887	1,509,493
Increase (Decrease) in Cash and Cash Equivalents	(233,241)	3,082,898	1,497,670	(381,786)	(875,923)
Cash and Cash Equivalents - Beginning of Period	294,351	676,137	54,390	676,137	1,552,060
Cash and Cash Equivalents - End of Period	61,110	3,759,035	1,552,060	294,351	676,137
Supplemental Disclosures of Cash Flow Information and Non-cash Transactions:
Interest paid				1,985
Income taxes paid
Fair value of warrants recorded as derivative warrant liability		704,005	1,459,531	1,198,564	768,435
Fair value of warrants issued for services				477,181
Reclassification of derivative warrant liability to additional paid-in capital	$ 813,319	$ 114,308		1,093,765	1,148,328
Conversion of promissory notes and accrued interest into common stock					633,333
Conversion of convertible promissory notes and accrued interest into common stock			1,836,813
Conversion of subordinated convertible promissory note and accrued interest into common stock			$ 394,245

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($)	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Shares at Dec. 31, 2013		1,183,823
Beginning Balance, Amount at Dec. 31, 2013		$ 1,184	$ 2,497,616	$ (5,400,554)	$ (2,901,754)
Issuance of common stock, Shares		13,333
Issuance of common stock, Amount		$ 13	49,987		50,000
Conversion of subordinated convertible promissory note and accrued interest, Shares		40,436
Conversion of subordinated convertible promissory note and accrued interest, Amount		$ 41	394,204		394,245
Conversion of convertible promissory notes and accrued interest, Shares		204,090
Conversion of convertible promissory notes and accrued interest, Amount		$ 204	1,836,609		1,836,813
Issuance of common stock in private placement, net of costs, Shares		226,671
Issuance of common stock in private placement, net of costs, Amount		$ 227	146,076		146,303
Issuance of common stock in reverse acquisition, Shares		333,333
Issuance of common stock in reverse acquisition, Amount		$ 333	(333)
Stock-based compensation			470,185		470,185
Net loss				(737,727)	(737,727)
Ending Balance, Shares at Sep. 30, 2014		2,001,686
Ending Balance, Amount at Sep. 30, 2014		$ 2,002	5,394,344	(6,138,281)	(741,935)
Conversion of convertible promissory notes and accrued interest, Shares		70,371
Conversion of convertible promissory notes and accrued interest, Amount		$ 70	633,263		633,333
Issuance of common stock in private placement, net of costs, Shares		202,469
Issuance of common stock in private placement, net of costs, Amount		$ 203	740,855		741,058
Reclassification of derivative warrant liability to additional paid-in capital			1,148,328		1,148,328
Stock-based compensation			486,271		486,271
Net loss				(2,902,268)	(2,902,268)
Ending Balance, Shares at Sep. 30, 2015		2,274,526
Ending Balance, Amount at Sep. 30, 2015		$ 2,275	8,403,061	(9,040,549)	(635,213)
Issuance of common stock in private placement, net of costs, Shares		641,111
Issuance of common stock in private placement, net of costs, Amount		$ 641	4,228,483		4,229,124
Reclassification of derivative warrant liability to additional paid-in capital			1,093,765		1,093,765
Issuance of common stock for services, Shares		17,778
Issuance of common stock for services, Amount		$ 18	149,982		150,000
Issuance of common stock, warrants and stock options for acquisition, Shares		1,942,456
Issuance of common stock, warrants and stock options for acquisition, Amount		$ 1,942	19,013,131		19,015,073
Issuance of warrants for services			477,181		477,181
Stock-based compensation			732,151		732,151
Net loss				(8,295,698)	(8,295,698)
Ending Balance, Shares at Sep. 30, 2016		4,875,871
Ending Balance, Amount at Sep. 30, 2016		$ 4,876	34,097,754	(17,336,247)	16,766,383
Issuance of common stock in private placement, net of costs, Shares		128,016
Issuance of common stock in private placement, net of costs, Amount		$ 128	491,223		491,351
Reclassification of derivative warrant liability to additional paid-in capital			813,319		813,319
Issuance of common stock for services, Shares		29,729
Issuance of common stock for services, Amount		$ 30	298,744		298,774
Stock-based compensation			541,544		541,544
Net loss				(4,919,261)	(4,919,261)
Ending Balance, Shares at Mar. 31, 2017		5,033,616
Ending Balance, Amount at Mar. 31, 2017		$ 5,034	$ 36,242,584	$ (22,255,508)	$ 13,992,110

NATURE OF OPERATIONS AND BASIS

NATURE OF OPERATIONS AND BASIS OF PRESENTATION	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes to Financial Statements
NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION	Business Citius Pharmaceuticals, Inc. (“Citius” or the “Company”) is a specialty pharmaceutical company dedicated to the development and commercialization of critical care products targeting unmet needs with a focus on anti-infectives, cancer care and unique prescription products. The Company was founded as Citius Pharmaceuticals, LLC, a Massachusetts limited liability company, on January 23, 2007. On September 12, 2014, Citius Pharmaceuticals, LLC entered into a Share Exchange and Reorganization Agreement with Citius Pharmaceuticals, Inc. (formerly Trail One, Inc.), a publicly traded company incorporated under the laws of the State of Nevada. Citius Pharmaceuticals, LLC became a wholly-owned subsidiary of Citius. On March 30, 2016, Citius acquired Leonard-Meron Biosciences, Inc. (“LMB”) as a wholly-owned subsidiary (see “Acquisition of Leonard-Meron Biosciences, Inc.” below). The Company had one approved product, Suprenza (phentermine hydrochloride), which it licensed out for promotion in the United States, Canada and Mexico. On July 1, 2016, the Company announced that it was discontinuing Suprenza. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital. Citius is subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, risks related to the development by Citius or its competitors of research and development stage products, market acceptance of its products, competition from larger companies, dependence on key personnel, dependence on key suppliers and strategic partners, the Company’s ability to obtain additional financing and the Company’s compliance with governmental and other regulations. Reverse Stock Split On June 9, 2017, the Company affected a 1-for-15 reverse stock split of its issued and outstanding shares of common stock, $0.001 par value. Under the terms of the reverse stock split, fractional shares issuable to stockholders were rounded up to the nearest whole share, resulting in a reverse split slightly less than 1-for-15 in the aggregate. All per share amounts and number of shares (other than authorized shares) in the consolidated financial statements and related notes have been retroactively restated to reflect the reverse stock split. Acquisition of Leonard-Meron Biosciences, Inc. On March 30, 2016, the Company acquired all of the outstanding stock of Leonard-Meron Biosciences, Inc. (“LMB”) by issuing 1,942,456 shares of its common stock.As of March 30, 2016, the stockholders of LMB received approximately 41% of the issued and outstanding common stock of the Company. In addition, the Company converted the outstanding common stock warrants of LMB into 243,020 common stock warrants of the Company and converted the outstanding common stock options of LMB into 77,252 common stock options of the Company. The Company acquired tangible assets consisting of cash of $255,748, prepaid expenses of $20,544, property and equipment of $5,085, deposits of $2,167, and identifiable intangible assets of $19,400,000 related to in-process research and development. The Company assumed accounts payable of $244,776, accrued expenses of $598,659, accrued compensation of $615,000, accrued interest of $23,862, and notes payable of $772,970. Accordingly, the net assets acquired amounted to $17,428,277. The fair value of LMB’s net assets acquired on the date of the acquisition, based on management’s analysis of the fair value of the 1,942,456 shares of the Company’s common stock issued for LMB’s outstanding stock, the 243,020 Company common stock warrants issued for LMB’s outstanding common stock warrants, and the vested portion of the 77,252 Company common stock options issued for LMB’s outstanding common stock options was $19,015,073. The fair value of the common stock issued was estimated at $17,482,093, the fair value of the warrants issued was estimated at $1,071,172 and the fair value of the vested options was estimated at $461,808. The Company recorded goodwill of $1,586,796 for the excess of the purchase price of $19,015,073 over the net assets acquired of $17,428,277. In-process research and development represents the value of LMB’s leading drug candidate which is an antibiotic solution used to treat catheter-related bloodstream infections (Mino-Lok™) and is expected to be amortized on a straight-line basis over a period of eight years commencing upon revenue generation. Goodwill represents the value of LMB’s industry relationships and its assembled workforce. Goodwill will not be amortized but will be tested at least annually for impairment. Unaudited pro forma operating results for the six months ended March 31, 2016, assuming the acquisition of LMB had been made as of October 1, 2015, are as follows: 2016 Revenues $ — Net loss $ (5,343,124 ) Net loss per share – basic and diluted $ (1.24 ) Basis of Presentation and Summary of Significant Accounting Policies Basis of Preparation Reverse Stock Split Use of Estimates Basic and Diluted Net Loss per Common Share	Business Citius Pharmaceuticals, Inc. (“Citius” or the “Company”) is a specialty pharmaceutical company dedicated to the development and commercialization of critical care products targeting unmet needs with a focus on anti-infectives, cancer care and unique prescription products. The Company was founded as Citius Pharmaceuticals, LLC, a Massachusetts limited liability company, on January 23, 2007. On September 12, 2014, Citius Pharmaceuticals, LLC entered into a Share Exchange and Reorganization Agreement (the “Exchange Agreement”), with Citius Pharmaceuticals, Inc. (formerly Trail One, Inc.), a publicly traded company incorporated under the laws of the State of Nevada. Citius Pharmaceuticals, LLC became a wholly-owned subsidiary of Citius (see “Reverse Acquisition” below). On March 30, 2016, Citius acquired Leonard-Meron Biosciences, Inc. (“LMB”) as a wholly-owned subsidiary (see “Acquisition of Leonard-Meron Biosciences, Inc.” below). The Company had one approved and marketed product, Suprenza (phentermine hydrochloride), which it had out licensed for promotion in the United States, Canada and Mexico. On July 1, 2016, the Company announced that it was discontinuing Suprenza. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital. Citius is subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, risks related to the development by Citius or its competitors of research and development stage products, market acceptance of its products, competition from larger companies, dependence on key personnel, dependence on key suppliers and strategic partners, the Company’s ability to obtain additional financing and the Company’s compliance with governmental and other regulations. Reverse Stock Split On June 9, 2017, the Company affected a 1-for-15 reverse stock split of its issued and outstanding shares of common stock, $0.001 par value. Under the terms of the reverse stock split, fractional shares issuable to stockholders were rounded up to the nearest whole share, resulting in a reverse split slightly less than 1-for-15 in the aggregate. All per share amounts and number of shares (other than authorized shares) in the consolidated financial statements and related notes have been retroactively restated to reflect the reverse stock split. Reverse Acquisition On September 12, 2014, Citius completed a reverse acquisition transaction with Citius Pharmaceuticals, LLC, which became a wholly-owned subsidiary of Citius. As part of the reverse acquisition, the former members of Citius Pharmaceuticals, LLC received 1,441,681 shares of the Company’s common stock in exchange for their interest in Citius Pharmaceuticals, LLC and, immediately after the transaction, owned 72% of the outstanding common stock. Immediately prior to the transaction, Citius had 333,333 shares of common stock outstanding. In connection with the Exchange Agreement, the Company completed the first closing of a Private Offering (see Note 7). Following the acquisition, Citius Pharmaceuticals, LLC began operating as a wholly-owned subsidiary of Citius Pharmaceuticals, Inc. Accounting principles generally accepted in the United States generally require that a company whose security holders retain the majority voting interest in the combined business be treated as the acquirer for financial reporting purposes. The acquisition was accounted for as a reverse acquisition whereby Citius Pharmaceuticals, LLC was deemed to be the accounting acquirer. Accordingly, the historical consolidated financial statements are those of Citius Pharmaceuticals, LLC as the accounting acquirer. The post-merger combination of Citius Pharmaceuticals, Inc. and Citius Pharmaceuticals, LLC is referred to throughout these notes to consolidated financial statements as the “Company.” As the accounting acquirer, Citius Pharmaceuticals, LLC did not acquire any tangible assets from Citius and did not assume any liabilities of Citius. This transaction is not considered a business combination because Citius, the non-operating public corporation, did not meet the definition of a business. Instead, this transaction is considered to be a capital transaction of Citius Pharmaceuticals, LLC and is equivalent to the issuance of shares by Citius Pharmaceuticals, LLC for the net assets of Citius accompanied by a recapitalization. In connection with the reverse acquisition, Citius Pharmaceuticals, LLC adopted the fiscal year end of Citius, thereby changing our fiscal year end from December 31 to September 30. Acquisition of Leonard-Meron Biosciences, Inc. On March 30, 2016, the Company acquired all of the outstanding stock of Leonard-Meron Biosciences, Inc. (“LMB”) by issuing 1,942,456 shares of its common stock. As of March 30, 2016, the stockholders of LMB received approximately 41% of the issued and outstanding common stock of the Company. In addition, the Company converted the outstanding common stock warrants of LMB into 243,020 common stock warrants of the Company and converted the outstanding common stock options of LMB into 77,252 common stock options of the Company. The Company acquired tangible assets consisting of cash of $255,748, prepaid expenses of $20,544, property and equipment of $5,085, deposits of $2,167, and identifiable intangible assets of $19,400,000 related to in-process research and development. The Company assumed accounts payable of $244,776, accrued expenses of $598,659, accrued compensation of $615,000, accrued interest of $23,862, and notes payable of $772,970. Accordingly, the net assets acquired amounted to $17,428,277. The fair value of LMB’s net assets acquired on the date of the acquisition, based on management’s analysis of the fair value of the 1,942,456 shares of the Company’s common stock issued for LMB’s outstanding stock, the 243,020 Company common stock warrants issued for LMB’s outstanding common stock warrants, and the vested portion of the 77,252 Company common stock options issued for LMB’s outstanding common stock options was $19,015,073. The fair value of the common stock issued was estimated at $17,482,093, the fair value of the warrants issued was estimated at $1,071,172 and the fair value of the vested options was estimated at $461,808. The Company recorded goodwill of $1,586,796 for the excess of the purchase price of $19,015,073 over the net assets acquired of $17,428,277. In-process research and development represents the value of LMB’s leading drug candidate which is an antibiotic solution used to treat catheter-related bloodstream infections (Mino-Lok™). Goodwill represents the value of LMB’s industry relationships and its assembled workforce. In-process research and development and goodwill will not be amortized but will be tested at least annually for impairment. Unaudited pro forma operating results, assuming the acquisition of LMB had been made as of October 1, 2014, are as follows: Year Ended September 30, 2016 2015 Revenues $ - $ - Net loss $ (11,548,647 ) $ (6,640,600 ) Net loss per share - basic and diluted $ (2.52 ) $ (1.64 ) Basis of Presentation As a result of the reverse acquisition, the accompanying consolidated financial statements include the operations of Citius Pharmaceuticals, LLC (the accounting acquirer). The accompanying consolidated financial statements also include the operations of Citius Pharmaceuticals, Inc. (formerly Trail One, Inc.) since the September 12, 2014 reverse acquisition and the operations of Leonard-Meron Biosciences, Inc. (“LMB”) since the March 30, 2016 acquisition. All significant inter-company balances and transactions have been eliminated in consolidation. All share and per share amounts presented in these consolidated financial statements reflect the one-for-one exchange ratio of Citius Pharmaceuticals, LLC member interests to common shares in the reverse acquisition.

GOING CONCERN UNCERTAINTY AND M

GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLAN	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes to Financial Statements
NOTE 2. GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLAN	The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company experienced negative cash flows from operations of $2,139,393 for the six months ended March 31, 2017. At March 31, 2017, the Company had a working capital deficit of $6,999,252. The Company has no revenue and has relied on proceeds from equity transactions and debt to finance its operations. At March 31, 2017, the Company had limited capital to fund its operations.This raises substantial doubt about the Company’s ability to continue as a going concern. The Company plans to raise capital through equity financings from outside investors as well as raise additional funds from existing investors and continued borrowings under related party debt agreements. There is no assurance, however, that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of the above uncertainty.	The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company experienced negative cash flows from operations of $5,900,421, $2,385,416, and $183,164, for the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014, respectively. At September 30, 2016, the Company had a working capital deficit of $4,291,123. The Company has no revenue and has relied on proceeds from equity transactions and debt to finance its operations. At September 30, 2016, the Company had limited capital to fund its operations. This raises substantial doubt about the Company’s ability to continue as a going concern. The Company plans to raise capital through equity financings from outside investors as well as raise additional funds from existing investors. There is no assurance, however, that that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of the above uncertainty.

BUSINESS AGREEMENTS

BUSINESS AGREEMENTS	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes to Financial Statements
NOTE 3. BUSINESS AGREEMENTS	Alpex Pharma S.A. On June 12, 2008, the Company entered into a collaboration and license agreement (the “Alpex Agreement”) with Alpex Pharma S.A. (“Alpex”), in which Alpex granted the Company an exclusive right and license to use certain Alpex intellectual property in order to develop and commercialize orally disintegrating tablet formulations of pharmaceutical products in United States, Canada and Mexico. In addition, Alpex manufactures Suprenza, the Company’s commercialized pharmaceutical product, on a contract basis.The agreement was amended on November 15, 2011 as part of an Amendment and Coordination Agreement (see the “Three-Party Agreement” below). Under the terms of the Alpex Agreement, as amended by the Three-Party Agreement dated November 15, 2011 (see below), Alpex is entitled to a payment per tablet manufactured and a percentage of all milestone, royalty and other payments received by the Company from Prenzamax, LLC, pursuant to a sublicense agreement (see below).In addition, under the terms of the Alpex Agreement, Alpex retained the right to use the clinical data generated by the Company to file for regulatory approval and market Suprenza in the rest of the world. In the event that Alpex has such sales, Alpex will pay the Company a percentage royalty on net sales, as defined (“Alpex Revenue”). No milestone, royalty or other payments were earned or received by the Company except for the reimbursement of certain regulatory fees under the Three-Party Agreement. On July 1, 2016, the Company announced that it notified the Food and Drug Administration (“FDA”) and Alpex that it was discontinuing Suprenza. Prenzamax, LLC On November 15, 2011, the Company entered into an exclusive license agreement (the “Sublicense Agreement”) with Prenzamax, LLC (“Prenzamax”), in which the Company granted Prenzamax and its affiliates the exclusive right to commercialize Suprenza in the United States. Prenzamax is an affiliate of Akrimax, a related party (see Note 7) and was formed for the specific purpose of managing the Sublicense Agreement. Under the terms of the Sublicense Agreement, Prenzamax is to pay the Company a percentage of the product’s EBITDA, as defined (“Profit Share Payments”). In addition, Prenzamax is to reimburse the Company directly for certain development costs. These payments are to commence once Prenzamax has achieved profitability, as defined in the Sublicense Agreement. Further, under the terms of the Sublicense Agreement, Prenzamax is required to share in the royalty payment due to Alpex under the Alpex Agreement. In addition, Prenzamax is entitled to a percentage of the Alpex Revenue received by the Company. The Company has not been reimbursed for any development costs nor has it earned any Profit Share Payments. On July 1, 2016, the Company announced that it notified Prenzamax that it was discontinuing Suprenza. Three-Party Agreement On November 15, 2011, the Company, Alpex and Prenzamax entered into the Three-Party Agreement wherein the terms of the Alpex Agreement were modified and Prenzamax and the Company agreed to each pay a portion of certain regulatory filing fees for as long as Prenzamax is purchasing Suprenza from Alpex pursuant to the Three-Party Agreement. During the three months ended March 31, 2016, the Company received $292,575 from Alpex as reimbursement for regulatory filing fees that were previously expensed during the three months ended December 31, 2015. The reimbursement was recorded as a reduction of research and development expenses. On July 1, 2016, the Company announced that it notified Alpex and Prenzamax that it was discontinuing Suprenza. Patent and Technology License Agreement LMB has a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc., (“NAT”) to develop and commercialize Mino-Lok™ on an exclusive worldwide sub licensable basis. Since May 2014, LMB has paid an annual maintenance fee of $30,000 that increases over five years to $90,000, until commercial sales of a product subject to the license. LMB will also pay annual royalties on net sales of licensed products, with royalties ranging from the mid-single digits to the low double digits. In limited circumstances in which the licensed product is not subject to a valid patent claim and a competitor is selling a competing product, the royalty rate is in the low-single digits. After a commercial sale is obtained, LMB must pay minimum aggregate annual royalties that increase in subsequent years. LMB must also pay NAT up to $1,390,000 upon achieving specified regulatory and sales milestones. Finally, LMB must pay NAT a specified percentage of payments received from any sub licensees.	Alpex Pharma S.A. On June 12, 2008, the Company entered into a collaboration and license agreement (the “Alpex Agreement”) with Alpex Pharma S.A. (“Alpex”), in which Alpex granted the Company an exclusive right and license to use certain Alpex intellectual property in order to develop and commercialize orally disintegrating tablet formulations of pharmaceutical products in United States, Canada and Mexico. In addition, Alpex manufactures Suprenza, the Company’s commercialized pharmaceutical product, on a contract basis. The agreement was amended on November 15, 2011 as part of an Amendment and Coordination Agreement (see the “Three-Party Agreement” below). Under the terms of the Alpex Agreement, as amended by the Three-Party Agreement dated November 15, 2011 (see below), Alpex is entitled to a payment per tablet manufactured and a percentage of all milestone, royalty and other payments received by the Company from Prenzamax, LLC, pursuant to a sublicense agreement (see below). A milestone is generally understood as a completion of a specific defined task towards the completion of a project or performance of a contract. For example, pursuant to the Company’s agreement with Alpex, the Company is required to pay Alpex for the completion of certain tasks including, but not limited to, the development of the analytical methods, formulations and filings of the NDA. In addition, under the terms of the Alpex Agreement, Alpex retained the right to use the clinical data generated by the Company to file for regulatory approval and market Suprenza in the rest of the world. In the event that Alpex has such sales, Alpex will pay the Company a percentage royalty on net sales, as defined (“Alpex Revenue”). No milestone, royalty or other payments have been earned or received by the Company through September 30, 2016 except for the reimbursement of regulatory fees under the Three-Party Agreement. On July 1, 2016, the Company announced that it notified the Food and Drug Administration (“FDA”) and Alpex that it was discontinuing Suprenza. Prenzamax, LLC On November 15, 2011, the Company entered into an exclusive license agreement (the “Sublicense Agreement”) with Prenzamax, LLC (“Prenzamax”), in which the Company granted Prenzamax and its affiliates the exclusive right to commercialize Suprenza in the United States. Prenzamax is an affiliate of Akrimax, a related party (see Note 8) and was formed for the specific purpose of managing the Sublicense Agreement. Under the terms of the Sublicense Agreement, Prenzamax is to pay the Company a percentage of the product’s EBITDA, as defined (“Profit Share Payments”). In addition, Prenzamax is to reimburse the Company directly for certain development costs. These payments are to commence once Prenzamax has achieved profitability, as defined in the Sublicense Agreement. Further, under the terms of the Sublicense Agreement, Prenzamax is required to share in the royalty payment due to Alpex under the Alpex Agreement. In addition, Prenzamax is entitled to a percentage of the Alpex Revenue received by the Company. The Company has not been reimbursed for any development costs nor has it earned any Profit Share Payments through September 30, 2016. On July 1, 2016, the Company announced that it notified Prenzamax that it was discontinuing Suprenza. Three-Party Agreement On November 15, 2011, the Company, Alpex and Prenzamax entered into the Three-Party Agreement wherein the terms of the Alpex Agreement were modified and Prenzamax and the Company agreed to each pay a portion of certain regulatory filing fees for as long as Prenzamax is purchasing Suprenza from Alpex pursuant to the Three-Party Agreement. During the three months ended March 31, 2016, the Company received $292,575 from Alpex as reimbursement for regulatory filing fees that were previously expensed during the three months ended December 31, 2015. The reimbursement was recorded as a reduction of research and development expenses. On July 1, 2016, the Company announced that it notified Alpex and Prenzamax that it was discontinuing Suprenza. Patent and Technology License Agreement LMB has a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc., (“NAT”) to develop and commercialize Mino-Lok™ on an exclusive, worldwide, sub licensable basis. LMB expensed a one-time license fee of $350,000 during the year ended May 31, 2014. LMB will pay an annual maintenance fee of $30,000 that increases over five years to $90,000, until commercial sales of a product subject to the license. LMB will also pay annual royalties on net sales of licensed products, with royalties ranging from the mid-single digits to the low double digits. In limited circumstances in which the licensed product is not subject to a valid patent claim and a competitor is selling a competing product, the royalty rate is in the low-single digits. After a commercial sale is obtained, LMB must pay minimum aggregate annual royalties that increase in subsequent years. LMB must also pay NAT up to $1,050,000 upon achieving specified regulatory and sales milestones. Finally, LMB must pay NAT a specified percentage of payments received from any sub licensees.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	A summary of the significant accounting policies followed by the Company in the preparation of the consolidated financial statements is as follows: Use of Estimates The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates having relatively higher significance include the accounting for acquisitions, stock-based compensation, valuation of warrants, and income taxes. Actual results could differ from those estimates and changes in estimates may occur. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturities of less than three months at the time of purchase to be cash equivalents. From time to time, the Company may have cash balances in financial institutions in excess of insurance limits. The Company has never experienced any losses related to these balances. Property and Equipment Property and equipment are valued at cost and are being depreciated over their useful lives using the straight-line method for financial reporting purposes. Routine maintenance and repairs are charged to expense as incurred. Expenditures which materially increase the value or extend useful lives are capitalized. Property and equipment are depreciated over estimated useful lives of three to five years. Property and equipment consisted of the following at September 30, 2016: 2016 Computer equipment $ 8,522 Less accumulated depreciation (4,780 ) $ 3,742 Depreciation and amortization expense for the year ended September 30, 2016 was $1,343. There was no depreciation and amortization expense for the year ended September 30, 2015 and the nine months ended September 30, 2014. Research and Development Research and development costs, including upfront fees and milestones paid to collaborators who are performing research and development activities under contractual agreement with the Company, are expensed as incurred. The Company defers and capitalizes its nonrefundable advance payments that are for research and development activities until the related goods are delivered or the related services are performed. When the Company is reimbursed by a collaboration partner for work the Company performs, it records the costs incurred as research and development expenses and the related reimbursement as a reduction to research and development expenses in its consolidated statement of operations. Research and development expenses primarily consist of clinical and non-clinical studies, materials and supplies, third-party costs for contracted services, and payments related to external collaborations and other research and development related costs. In-process Research and Development and Goodwill In-process research and development represents the value of LMB’s leading drug candidate which is an antibiotic solution used to treat catheter-related bloodstream infections (Mino-Lok™). Goodwill represents the value of LMB’s industry relationships and its assembled workforce. In-process research and development and goodwill will not be amortized but will be tested at least annually for impairment. The Company reviews intangible assets annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life of any intangible asset. If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value in the period identified. No triggering events occurred since the acquisition of LMB that would suggest that a potential impairment may have occurred through September 30, 2016. The Company evaluates the recoverability of goodwill annually or more frequently if events or changes in circumstances indicate that the carrying value of an asset might be impaired. Goodwill is first qualitatively assessed to determine whether further impairment testing is necessary. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy and changes in the composition or carrying amount of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step process is then performed. The Company performed a qualitative assessment for our 2016 analysis of goodwill. Based on this assessment, management does not believe that it is more likely than not that the carrying value of the reporting unit exceeds its fair value. Accordingly, no further testing was performed as management believes that there are no impairment issues in regards to goodwill as of September 30, 2016. Patents and Trademarks Certain costs of outside legal counsel related to obtaining trademarks for the Company are capitalized. Patent costs are amortized over the legal life of the patents, generally twenty years, starting at the patent issuance date. The costs of unsuccessful and abandoned applications are expensed when abandoned. The cost of maintaining existing patents are expensed as incurred. Revenue Recognition The Company recognizes revenue using the four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the selling price is fixed and determinable, and (4) collectability is reasonably assured. Provisions for discounts, rebates, estimated returns and allowances, and other adjustments are provided in the period that the revenue is recorded. The Company’s license and collaboration agreements with certain partners also provide for contingent payments to us based solely upon the performance of the respective partner. For such contingent amounts we expect to recognize the payments as revenue when earned under the applicable contract, which is generally upon completion of performance by the respective partner, provided that collection is reasonably assured. The Company’s license and collaboration agreements with its partners also provide for payments to us upon the achievement of specified sales volumes of approved drugs. We consider these payments to be similar to royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured. Stock-Based Compensation The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees and directors, net of expected forfeitures, as an expense in the consolidated statement of operations over the requisite service period based on the fair value for each stock award on the grant date. The fair value of each option grant is estimated as of the date of grant using the Black-Scholes option pricing model. Due to its limited operating history, limited number of sales of its common stock and limited history of its shares being publicly traded, the Company estimates its volatility in consideration of a number of factors including the volatility of comparable public companies. The estimated forfeiture rate is based on historical forfeiture information as well as subsequent events occurring prior to the issuance of the financial statements. Because our stock options have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, the existing model may not necessarily provide a reliable single measure of fair value of our stock options The Company recognizes compensation costs resulting from the issuance of stock-based awards to non-employees as an expense in the consolidated statement of operations over the service period based on the measurement of fair value for each stock award. Derivative Instruments The Company generally does not use derivative instruments to hedge exposures to cash-flow or market risks; however, certain warrants to purchase common stock that do not meet the requirements for classification as equity are classified as liabilities. In such instances, net-cash settlement is assumed for financial reporting purposes, even when the terms of the underlying contracts do not provide for a net-cash settlement. Such financial instruments are initially recorded at fair value with subsequent changes in fair value charged (credited) to operations in each reporting period. If these instruments subsequently meet the requirements for classification as equity, the Company reclassifies the fair value to equity. Income Taxes Citius Pharmaceuticals, LLC was treated as a partnership for federal and state income taxes prior to the September 12, 2014 Reverse Acquisition. A partnership’s income or loss is allocated directly to the Members for income tax purposes. The Company follows accounting guidance regarding the recognition, measurement, presentation and disclosure of uncertain tax positions in the consolidated financial statements. Tax positions taken or expected to be taken in the course of preparing our tax returns, including the position that Citius Pharmaceuticals, LLC qualified as a pass-through entity, are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authorities. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded in the consolidated financial statements. There are no uncertain tax positions that require accrual or disclosure as of September 30, 2016. Any interest or penalties are charged to expense. During the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014, the Company did not recognize any interest and penalties. Tax years subsequent to December 31, 2012 are subject to examination by federal and state authorities. After the Reverse Acquisition, we recognize deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. We provide a valuation allowance, if necessary, for deferred tax assets for which we do not consider realization of such assets to be “more-likely-than-not”. The deferred tax benefit or expense for the period represents the change in the deferred tax asset or liability from the beginning to the end of the period. Basic and Diluted Net Loss per Common Share Basic and diluted net loss per common share is computed by dividing net loss in each period by the weighted average number of shares of common stock outstanding during such period. For the periods presented, common stock equivalents, consisting of options, warrants and convertible securities were not included in the calculation of the diluted loss per share because they were anti-dilutive. Fair Value of Financial Instruments The financial statements include various estimated fair value information. Financial instruments are initially recorded at historical cost. If subsequent circumstances indicate that a decline in the fair value of a financial asset is other than temporary, the financial asset is written down to its fair value. Unless otherwise indicated, the fair values of financial instruments approximate their carrying amounts. By their nature, all financial instruments involve risk, including credit risk for non-performance by counterparties. The fair values of cash and cash equivalents, accounts payable, accrued interest, accrued expenses, notes payable and due to related party approximate their recorded amounts because of their relatively short settlement terms. The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. The Company’s financial liabilities measured at fair value on September 30, 2016 and 2015 consists solely of the derivative warrant liability which is classified as Level 3 in fair value hierarchy (see Note 6). The Company uses a valuation method, the Black-Scholes option pricing model, and the requisite assumptions in estimating the fair value for the warrants considered to be derivative instruments. The Company has no financial assets measured at fair value. The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the years ended September 30, 2016 and 2015, and the nine month period ended September 30, 2014. Segment Reporting The Company currently operates as a single segment. Concentrations of Credit Risk The Company has no significant off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other hedging arrangements. Recently Issued Accounting Standards In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” which applies should a company be facing probable liquidation within one year of the issuance of the financial statements, but is not actually in liquidation at the time of issuance. The applicable accounting basis for presentation remains as a going concern, but if liquidation within one year is probable, then certain disclosures must be included in the financial statement presentation. ASU 2014-15 is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently in the process of evaluating the impact of adoption of this ASU on the consolidated financial statements. In August 2015, the FASB also issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date which deferred the effective date of ASU 2014-09 by one year. Originally scheduled to be effective for fiscal years beginning after December 15, 2016, ASU 2015-14 is effective for the year ended September 30, 2019. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The new standard is effective for annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of the adoption of this ASU on the financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation” to require changes to several areas of employee share-based payment accounting in an effort to simplify share-based reporting. The update revises requirements in the following areas: minimum statutory withholding, accounting for income taxes, forfeitures, and intrinsic value accounting for private entities. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of this ASU on the financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” to address how certain cash receipts and cash payments are presented and classified in the statement of cash flows in an effort to reduce existing diversity in practice. The update includes eight specific cash flow issues and provides guidance on the appropriate cash flow presentation for each. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017. The Company does not expect the adoption of this guidance to have a material impact on the financial statements.

NOTES PAYABLE

NOTES PAYABLE	12 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
NOTE 5. NOTES PAYABLE	Convertible Promissory Notes Between July 12, 2010 and November 30, 2012, the Company issued several convertible promissory notes (collectively the “Convertible Notes”) to two existing investors in aggregate total principal amount of $1,460,000. The Convertible Notes accrued interest at 3.00% per annum and were payable on demand only after their respective 10-year maturities. Between January 1, 2013 and March 25, 2013, the Company issued additional Convertible Notes to existing investors in aggregate total principal amount of $225,000. The additional Convertible Notes accrued interest at 5.00% per annum and were payable on demand only after their respective 10-year maturities. The unpaid principal and accrued interest were only convertible into common stock following a reorganization or conversion into a corporation at the option of the holder. The unpaid principal and accrued interest will convert into common stock at the greater of the fair value of the common stock on the date of the conversion or $3.75 ($10.35 if the Company’s common stock is admitted to trade on a national exchange prior to the date of conversion). On July 31, 2014, in anticipation of the completion of the reverse acquisition and the Private Offering, the note holders demanded conversion of the outstanding $1,685,000 Convertible Notes and accrued interest of $151,813 into 204,090 shares of common stock at a conversion price of $9.00 per share. Promissory Notes In November 2013, the Company issued two promissory notes (the “Promissory Notes”) to two existing investors in aggregate total principal amount of $600,000. The Promissory Notes accrued interest at 5.00% per annum and were due at the earliest of (1) December 19, 2014, (2) the occurrence of an event of default as defined in the Promissory Notes, (3) an initial installment of $100,000 principal amount, to each investor, upon the receipt by the Company of a minimum $6,500,000 in aggregate proceeds under any financing transaction, (4) a second installment of $100,000 principal amount, to each investor, upon the receipt by the Company of a minimum $8,500,000 in aggregate proceeds under any financing transaction, and (5) a third installment of $100,000 principal amount, to each investor, upon the receipt by the Company of a minimum $10,000,000 in aggregate proceeds under any financing transaction. At September 30, 2014, the Promissory Notes had an outstanding aggregate principal balance of $600,000. On December 31, 2014, the note holders requested conversion of the outstanding $600,000 Promissory Notes and accrued interest of $33,333 into 70,371 shares of common stock at a conversion price of $9.00 per share. Subordinated Convertible Promissory Note In 2013, the Company entered into an investment banking agreement to raise up to $6 million of 10% subordinated convertible promissory notes. The agreement contemplated a reverse acquisition with a public company and an automatic conversion of the notes into units of common stock and warrants, as defined therein. In April 2013, the Company issued a $350,000 subordinated convertible promissory note (the “Subordinated Note”). The Subordinated Note accrued interest at 10% per annum and was payable on demand any time after April 2014. If the Company has not repaid the Subordinated Note at the closing of a reverse acquisition, the unpaid principal and accrued interest will automatically convert into common stock by dividing the amount due by a price per unit of $9.75. Also, upon automatic conversion, the purchaser of the Subordinated Note will receive a warrant to purchase the same number of shares in to which the Subordinated Note converts. On July 31, 2014, in anticipation of the completion of the reverse acquisition and the Private Offering, the note holder demanded conversion of the outstanding $350,000 Subordinated Note and accrued interest of $44,245 into 40,436 shares of common stock at a conversion price of $9.75 per share. Notes Payable - Related Parties On March 30, 2016, the Company assumed $772,970 of demand notes payable in the acquisition of LMB. The principal balance of the notes payable to our Chairman, Leonard Mazur, was $760,470 and the principal balance of the notes payable to our Chief Executive Officer, Myron Holubiak, was $12,500. Notes with a principal balance of $704,000 accrue interest at the “Prime Rate”, as published in the Wall Street Journal on the last day of each month plus 1% and notes with a principal balance of $68,970 accrue interest at 12% per annum. In April 2016, $600,000 of the “Prime Rate” plus 1% demand notes payable and accrued interest of $1,985 was repaid to Leonard Mazur. On September 7, 2016, the Company issued a $500,000 demand promissory note to our Chairman, Leonard Mazur which matures on the earlier of December 31, 2016 or demand by the lender. The note accrues interest at the “Prime Rate”, as published in the Wall Street Journal on the last day of each month, plus 1%. Interest Expense During 2013, the Company incurred $42,000 of debt issuance costs related to the Subordinated Note which was amortized over the term of the underlying debt. Amortization of debt issuance costs recorded as interest expense for the nine months ended September 30, 2014 amounted to $14,000. Interest expense on the notes for the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014, including non-cash interest related to debt issuance costs, was $8,994, $7,500, and $93,067, respectively.

NOTES PAYABLE RELATED PARTIES

NOTES PAYABLE RELATED PARTIES	6 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
NOTE 6. NOTES PAYABLE RELATED PARTIES	On March 30, 2016, the Company assumed $772,970 of demand notes payable in the acquisition of LMB.The principal balance of the notes payable to our Chairman, Leonard Mazur, was $760,470 and the principal balance of the notes payable to our Chief Executive Officer, Myron Holubiak, was $12,500. Notes with a principal balance of $704,000 accrue interest at the prime rate plus 1.0% per annum and notes with a principal balance of $68,970 accrue interest at 12% per annum. In April 2016, $600,000 of the prime rate plus 1.0% demand notes payable and accrued interest of $1,985 was repaid to Leonard Mazur. The Board of Directors has authorized revolving demand promissory notes with Leonard Mazur in an aggregate principal amount of up to $2,500,000, of which $1,850,000 is outstanding at March 31, 2017. On September 7, 2016, the Company issued a $500,000 demand promissory note to our Chairman, Leonard Mazur which matures on demand by the lender. The Company then issued $1,350,000 of additional demand promissory notes to Leonard Mazur during the six months ended March 31, 2017 which mature on the earlier of December 31, 2017 or demand by the lender. These notes accrue interest at the prime rate plus 1%. Interest expense on notes payable – related parties was $19,851 and $33,079 for the three and six months ended March 31, 2017.

DERIVATIVE WARRANT LIABILITY

DERIVATIVE WARRANT LIABILITY	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes to Financial Statements
NOTE 7. DERIVATIVE WARRANT LIABILITY	Derivative financial instruments are recognized as a liability on the consolidated balance sheet and measured at fair value. At March 31, 2017 and September 30, 2016, the Company had outstanding warrants to purchase 126,667 shares and 307,778 shares, respectively, of its common stock that are considered to be derivative instruments since the agreements contain “down round” provisions whereby the exercise price of the warrants is subject to adjustment in the event that the Company issues common stock for less than $9.00 per share within one-year of the original issuance of the warrants (see Note 6). The Company performs valuations of the warrants using the Black-Scholes option pricing model which value was also compared to a Binomial Option Pricing Model for reasonableness. The Black-Scholes option pricing model requires input of assumptions including the risk-free interest rates, volatility, expected life and dividends. Selection of these inputs involves management’s judgment and may impact net loss. Due to our limited operating history and limited number of sales of our common stock, we estimate our volatility based on a number of factors including the volatility of comparable publicly traded pharmaceutical companies. The volatility factor used in the Black-Scholes option pricing model has a significant effect on the resulting valuation of the derivative liabilities on our balance sheet. The volatility calculated at March 31, 2017 was 85%. We used a risk-free interest rate of 1.96%, estimated lives of 4.04 to 4.07 years, which are the remaining contractual lives of the warrants subject to “down round” provisions, and no dividends to our common stock. The volatility calculated at September 30, 2016 was 73%. We used a risk-free interest rate of 1.14%, estimated lives of 4.10 to 4.57 years, which are the remaining contractual lives of the warrants subject to “down round” provisions, and no dividends to our common stock. During the six months ended March 31, 2017, anti-dilution rights related to warrants to purchase 181,111 shares of common stock expired which resulted in a reclassification from derivative warrant liability to additional paid-in capital of $813,319. The table below presents the changes in the derivative warrant liability, which is measured at fair value on a recurring basis and classified as Level 3 in the fair value hierarchy: Six Months Ended March 31, 2017 Six Months Ended March 31, 2016 Derivative warrant liability, beginning of period $ 1,681,973 $ 738,955 Fair value of warrants issued — 704,005 Total realized/unrealized losses (gains) included in net loss (442,390 ) 173,906 Reclassification of liability to additional paid-in capital (813,319 ) (114,308 ) Derivative warrant liability, end of period $ 426,264 $ 1,502,558	Derivative financial instruments are recognized as a liability on the consolidated balance sheet and measured at fair value. At September 30, 2016 and 2015, the Company had outstanding warrants to purchase 307,778 and 202,469 shares, respectively, of its common stock that are considered to be derivative instruments since the agreements contain “down round” provisions whereby the exercise price of the warrants is subject to adjustment in the event that the Company issues common stock for less than $9.00 per share within one-year of the issuance of the warrants (see Note 7). The Company performs valuations of the warrants using a probability weighted Black-Scholes option pricing model which value was also compared to a Binomial Option Pricing Model for reasonableness. This model requires input of assumptions including the risk-free interest rates, volatility, expected life and dividend rates, and has also considered the likelihood of “down-round” financings. Selection of these inputs involves management’s judgment and may impact net income. Due to our limited operating history and limited number of sales of our common stock, we estimate our volatility based on a number of factors including the volatility of comparable publicly traded pharmaceutical companies. The volatility factor used in the Black-Scholes option pricing model has a significant effect on the resulting valuation of the derivative liabilities on our balance sheet. The volatility calculated at September 30, 2016 was 73% and we used a risk-free interest rate of 1.14%, estimated lives of 4.10 to 4.57 years, which are the remaining contractual lives of the warrants subject to “down-round” provisions, and no dividends to our common stock. The volatility calculated at September 30, 2015 was 57% and we used a risk-free interest rate of 1.37%, estimated lives of 4.47 to 4.96 years, which are the remaining contractual lives of the warrants subject to “down-round” provisions, and no dividends to our common stock. On September 12, 2015, anti-dilution rights related to warrants to purchase 338,672 shares of common stock expired which resulted in a reclassification from derivative warrant liability to additional paid-in capital of $1,148,328. During the year ended September 30, 2016, anti-dilution rights related to warrants to purchase 202,469 shares of common stock expired which resulted in a reclassification from derivative warrant liability to additional paid-in capital of $1,093,765. The table below presents the changes in the derivative warrant liability, which is measured at fair value on a recurring basis and classified as Level 3 in fair value hierarchy (see Note 4): Year Ended September 30, 2016 Year Ended September 30, 2015 Nine Months Ended September 30, 2014 Derivative warrant liability, beginning of period $ 738,955 $ 1,450,943 $ - Fair value of warrants issued 1,198,564 768,435 1,459,531 Total realized/unrealized losses (gains) included in net loss 838,219 (332,095 ) (8,588 ) Reclassification of liability to additional paid-in capital (1,093,765 ) (1,148,328 ) - Derivative warrant liability, end of period $ 1,681,973 $ 738,955 $ 1,450,943

COMMON STOCK, STOCK OPTIONS AND

COMMON STOCK, STOCK OPTIONS AND WARRANTS	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes to Financial Statements
NOTE 8. COMMON STOCK, STOCK OPTIONS AND WARRANTS	Common Stock On September 15, 2016, the stockholders approved an increase in the number of shares of authorized common stock from 90,000,000 shares to 200,000,000 shares.In addition, the stockholders granted the Board of Directors the authority to affect a reverse stock split of our common stock by a ratio of not less than 1-for-8 and not more than 1-for-20 at any time prior to September 15, 2017 (See Note 1). Private Offerings On September 12, 2014, the Company sold 226,671 Units for a purchase price of $9.00 per Unit for gross proceeds of $2,040,040.Each Unit consists of one share of common stock and one five-year warrant (the “Investor Warrants”) to purchase one share of common stock at an exercise price of $9.00 (the “Private Offering”). The Investor Warrants will be redeemable by the Company at a price of $0.015 per Investor Warrant at any time subject to the conditions that (i) the common stock has traded for twenty (20) consecutive trading days with a closing price of at least $22.50 per share with an average trading volume of 3,333 shares per day and (ii) the Company provides 20 trading days prior notice of the redemption and the closing price of the common stock is not less than $17.55 for more than any 3 days during such notice period and (iii) the underlying shares of common stock are registered. The Company issued the Placement Agent and their designees five-year warrants (the “Placement Agent Unit Warrants”) to purchase 45,334 Units at an exercise price of $9.00 per Unit. The Placement Agent Unit Warrants are exercisable on a cash or cashless basis with respect to purchase of the Units, and will be exercisable only for cash with respect to warrants received as part of the Units. In addition, the Placement Agent was issued warrants to purchase 66,667 shares of common stock exercisable for cash at $9.00 per share for investment banking services provided in connection with the transaction (the “Placement Agent Share Warrants”). In connection with the Private Offering, the Company entered into a Registration Rights Agreement pursuant to which the Company filed a registration statement, registering for resale all shares of common stock (i) included in the Units; and (ii) issuable upon exercise of the Investor Warrants. The Company filed the Registration Statement on September 11, 2015 and it was declared effective on January 21, 2016. During the year ended September 30, 2015, the Company sold an additional 189,136 Units for a purchase price of $8.10 per Unit and 13,333 Units for a purchase price of $9.00 per Unit for gross proceeds of $1,652,000. Each Unit consists of one share of common stock and one Investor Warrant (see description above). During the year ended September 30, 2016, the Company sold an additional 290,000 Units for a purchase price of $8.10 per Unit and 17,778 Units for a purchase price of $9.00 per Unit for gross proceeds of $2,509,000.Each Unit consists of one share of common stock and one Investor Warrant (see description above). On May 12, 2016, the Company announced that it had completed the final phase of the Private Offering. On March 22, 2016, the Company sold 333,333 shares of common stock at $9.00 per share to its Chairman of the Board, Leonard Mazur, for gross proceeds of $3,000,000. There were no expenses related to this placement. In October 2016, the Company commenced an offering (the “2016 Offering”) of up to 1,000,000 Units at a price of $6.00 per Unit (the “2016 Offering Units”), each 2016 Offering Unit consists of (i) one share of common stock and (ii) a warrant to purchase one share of common stock (the “2016 Offering Warrants”) for gross proceeds of up to $6,000,000 with an over-subscription allotment of up to $2,000,000. Each 2016 Offering Warrant has an exercise price of $8.25 and is exercisable for five years from the date of issuance. The Placement Agent will receive a 10% cash commission on the gross proceeds of each sale of the 2016 Offering Units. In addition, on each closing the Placement Agent will also receive (i) an expense allowance equal to 3% of the proceeds of the sale, and (ii) warrants to purchase a number of shares of common stock equal to 10% of the 2016 Offering Units sold at an exercise price of $8.25 per share. During the six months ended March 31, 2017, the Company sold 128,017 2016 Offering Units for gross proceeds of $768,100. The estimated fair value of the 128,017 warrants included in the 2016 Offering Units sold to the investors was $587,592. Additionally, warrants to purchase 12,802 shares of common stock with an estimated fair value of $58,759 were granted to the Placement Agent pursuant to the above pricing terms. The Placement agent was paid commissions and an expense allowance of $99,853. Other costs of the placement were $176,896. During January 2017, the Company issued 29,729 shares of its common stock for investor relations services. The $298,774 fair value of the common stock was expensed during the six months ended March 31, 2017. Stock Options On September 12, 2014, the Board of Directors adopted the 2014 Stock Incentive Plan (the “2014 Plan”) and reserved 866,667 shares of common stock for issuance to employees, directors and consultants. On September 12, 2014, the stockholders approved the plan. Pursuant to the 2014 Plan, the Board of Directors (or committees and/or executive officers delegated by the Board of Directors) may grant stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash-based awards. As of March 31, 2017, there were options to purchase an aggregate of 590,851 shares of common stock outstanding under the 2014 Plan and 275,816 shares available for future grants. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. Due to its limited operating history and limited number of sales of its Common Stock, the Company estimated its volatility in consideration of a number of factors including the volatility of comparable public companies. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the consolidated financial statements, to estimate option exercises and employee terminations within the valuation model. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The expected term of stock options granted, all of which qualify as “plain vanilla,” is based on the average of the contractual term (generally 10 years) and the vesting period. For non-employee options, the expected term is the contractual term. A summary of option activity under the 2014 Plan as of March 31, 2017 and the changes during the six months then ended is presented below: Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at September 30, 2016 582,185 $ 8.11 8.59 years $ 1,355,924 Granted 8,666 10.05 Exercised — — Forfeited or expired — — Outstanding at March 31, 2017 590,851 $ 8.14 8.12 years $ 436,911 Exercisable at March 31, 2017 376,489 $ 6.49 7.66 years 427,036 Stock-based compensation expense for the six months ended March 31, 2017 and 2016 was $541,544 and $236,913, respectively. At March 31, 2017, unrecognized total compensation cost related to unvested awards of $883,760 is expected to be recognized over a weighted average period of 1.53 years. Warrants The Company has reserved 1,344,759 shares of common stock for the exercise of outstanding warrants. The following table summarizes the warrants outstanding at March 31, 2017: Exercise price Number Expiration Dates Investor Warrants $ 9.00 226,671 September 12, 2019 Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Warrants underlying Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Placement Agent Share Warrants 9.00 66,667 September 12, 2019 Investor Warrants 9.00 143,025 March 19, 2020 – June 26, 2020 Investor Warrants 9.00 59,444 July 2, 2020 – September 14, 2020 Investor Warrants 9.00 38,889 November 5, 2020 – November 20, 2020 Investor Warrants 9.00 142,222 January 7, 2021 – March 21, 2021 Investor Warrants 9.00 126,667 (1) April 15, 2021 – April 25, 2021 LMB Warrants 6.15 90,151 June 12, 2019 - March 2, 2021 LMB Warrants 9.90 8,155 September 30, 2019 - January 8, 2020 LMB Warrants 20.70 17,721 November 3, 2019 - March 6, 2020 LMB Warrants 7.50 73,883 August 18, 2020 – March 14, 2021 LMB Warrants 13.65 53,110 March 24, 2022 – April 29, 2022 Financial Advisor Warrants 3.00 66,667 August 15, 2021 2016 Offering Warrants 8.25 128,017 November 23, 2021 - February 27, 2022 2016 Offering Placement Agent Warrants 8.25 12,802 November 23, 2021 - February 27, 2022 1,344,759 (1) Fair value of these warrants are included in the derivative warrant liability During the six months ended March 31, 2017, the Company sold 128,017 2016 Offering Units, at a price of $6.00 per Unit, consisting of (i) one share of common stock and (ii) a warrant to purchase one share of common stock. Each 2016 Offering Warrant has an exercise price of $8.25 and is exercisable for five years from the date of issuance. Additionally, warrants to purchase 12,802 shares of common stock were granted to the Placement Agent pursuant to the above pricing terms. At March 31, 2017, the weighted average remaining life of all of the outstanding warrants is 3.43 years, all warrants are exercisable, and the aggregate intrinsic value for the warrants outstanding was $210,000.	Common Stock In May 2014, the Company issued 13,333 shares of common stock for $50,000, or $3.75 per share. On September 12, 2014, in connection with the Reverse Acquisition, 333,333 shares of common stock were recorded in the financial statements of Citius Pharmaceuticals, LLC, the accounting acquirer (See Note 1 - Reverse Acquisition). On September 15, 2016, the stockholders approved an increase in the number of shares of authorized common stock from 90,000,000 shares to 200,000,000 shares. In addition, the stockholders granted the Board of Directors the authority to effect a reverse stock split of our common stock by a ratio of not less than 1-for-8 and not more than 1-for-20 at any time prior to September 15, 2017 (See Note 1). Private Offerings In 2014, the Company entered into an investment banking agreement to raise up to $5.1 million and issue up to 566,667 Units described below. The agreement contemplated a Reverse Acquisition with a public company. As of December 31, 2013, the Company capitalized as deferred offering costs a $25,000 retainer for legal costs associated with this offering. The $25,000 retainer was charged to additional paid-in capital on completion of the first closing of the offering. On September 12, 2014, the Company sold 226,671 Units for a purchase price of $9.00 per Unit for gross proceeds of $2,040,040. Each Unit consists of one share of common stock and one five-year warrant (the “Investor Warrants”) to purchase one share of common stock at an exercise price of $9.00, (the “Private Offering”). The exercise price of the Investor Warrants is subject to adjustment, for up to one year, if the Company issues common stock at a price lower than the exercise price, subject to certain exceptions. The 2015 private placement described below did not result in an adjustment of the exercise price of the Investor Warrants. The Investor Warrants will be redeemable by the Company at a price of $0.001 per Investor Warrant at any time subject to the conditions that (i) the common stock has traded for twenty (20) consecutive trading days with a closing price of at least $22.50 per share with an average trading volume of 3,333 shares per day and (ii) the Company provides 20 trading days prior notice of the redemption and the closing price of the common stock is not less than $17.55 for more than any 3 days during such notice period and (iii) the underlying shares of common stock are registered. The Placement Agent was paid a commission of ten percent (10%) and a non-accountable expense allowance of three percent (3%) of the funds raised in the Private Offering. As a result of the foregoing arrangement, the Placement Agent was paid commissions and expenses of $265,206. In addition, the Company issued to the Placement Agent and their designees five-year warrants (the “Placement Agent Unit Warrants”) to purchase 45,335 Units at an exercise price of $9.00 per Unit. The Placement Agent Unit Warrants are exercisable on a cash or cashless basis with respect to purchase of the Units, and will be exercisable only for cash with respect to warrants received as part of the Units. The exercise price of the warrants underlying the Placement Agent Unit Warrants is subject to adjustment, for up to one year, if the Company issues common stock at a price lower than the exercise price, subject to certain exceptions. In addition, the Placement Agent was issued warrants to purchase 66,667 shares of common stock exercisable for cash at $9.00 per share for investment banking services provided in connection with the transaction (the “Placement Agent Share Warrants”). Other cash expenses related to the private placement totaled $169,000. The Placement Agent may, while the Placement Agent Unit Warrants are outstanding, appoint one person to the Board of Directors, and designate one person who may attend meetings of the Board of Directors as an observer. On November 2, 2015, the Placement Agent waived its right to appoint a person to the Board of Directors. In connection with the Private Offering, the Company entered into a Registration Rights Agreement pursuant to which the Company is required to file a registration statement (the “Registration Statement”), registering for resale all shares of common stock (i) included in the Units; and (ii) issuable upon exercise of the Investor Warrants. The Company has agreed to use its reasonable efforts to cause the Registration Statement to be filed no later than 60 days after the completion of the Private Offering (the “Filing Deadline”), and to have the Registration Statement declared effective within 180 days of the Filing Deadline. Any holders of the shares of common stock removed from the Registration Statement as a result of a Section 415 comment from the SEC shall be included in a subsequent registration statement the Company will file no later than six months after the prior registration statement (or such other period as permitted by SEC rules). The Company filed the Registration Statement on September 11, 2015 and it was declared effective on January 21, 2016. During the year ended September 30, 2015, the Company sold an additional 189,136 Units for a purchase price of $8.10 per Unit and 13,333 Units for a purchase price of $9.00 per Unit for gross proceeds of $1,652,000. Each Unit consists of one share of common stock and one Investor Warrant (see description above). There was no placement agent for the 2015 private placements and other cash expenses related to the placements were $142,507. In connection with these placements, the Company credited $741,058 to stockholders’ equity (deficit) and $768,435 to derivative warrant liability. During the year ended September 30, 2016, the Company sold an additional 290,000 Units for a purchase price of $8.10 per Unit and 17,778 Units for a purchase price of $9.00 per Unit for gross proceeds of $2,509,000. Each Unit consists of one share of common stock and one Investor Warrant (see description above). There was no placement agent for these private placements and other cash expenses related to the placements were $81,312. In connection with these placements, the Company credited $1,229,124 to stockholders’ equity (deficit) and $1,198,564 to derivative warrant liability. On March 22, 2016, the Company sold 333,333 shares of common stock at $9.00 per share to its Chairman of the Board, Leonard Mazur, for gross proceeds of $3,000,000. There were no expenses related to this placement. Stock Options On September 12, 2014, the Board of Directors adopted the 2014 Stock Incentive Plan (the “2014 Plan”) and reserved 866,667 shares of common stock for issuance to employees, directors and consultants. On September 12, 2014, the stockholders approved the plan. Pursuant to the 2014 Plan, the Board of Directors (or committees and/or executive officers delegated by the Board of Directors) may grant stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash-based awards. As of September 30, 2016, there were options to purchase an aggregate of 582,185 shares of common stock outstanding under the 2014 Plan and 284,482 shares available for future grants. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. Due to its limited operating history and limited number of sales of its common stock, the Company estimated its volatility in consideration of a number of factors including the volatility of comparable public companies. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the consolidated financial statements, to estimate option exercises and employee terminations within the valuation model. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The expected term of stock options granted to employees and directors, all of which qualify as “plain vanilla,” is based on the average of the contractual term (generally 10 years) and the vesting period. For non-employee options, the expected term is the contractual term. The following assumptions were used in determining the fair value of stock option grants: Year Ended September 30, 2016 Year Ended September 30, 2015 Nine Months Ended September 30, 2014 Risk-free interest rate 0.95-1.40 % 1.37-1.52 % 1.83 % Expected dividend yield 0 % 0 % 0 % Expected term 4.75 - 9 years 2.5 - 6 years 5 - 6 years Forfeiture rate 0 % 0 % 0 % Expected volatility 57-74 % 53-58 % 54 % A summary of option activity under the 2014 Plan is presented below: Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2014 - $ - Granted 220,000 6.75 Exercised - - Forfeited or expired - - Outstanding at September 30, 2014 220,000 6.75 9.96 years $ 495,000 Granted 40,000 9.00 Exercised - - Forfeited or expired - - Outstanding at September 30, 2015 260,000 7.10 8.94 years $ 297,000 Granted 244,933 11.41 Assumed in acquisition 77,252 1.08 Exercised - - Forfeited or expired - - Outstanding at September 30, 2016 582,185 $ 8.11 8.59 years $ 1,355,924 Exercisable at September 30, 2016 342,444 $ 6.74 8.14 years $ 1,059,615 On September 12, 2014, the Board of Directors granted stock options to purchase 220,000 shares of common stock at an exercise price of $6.75 per share. The weighted average grant-date fair value of the options granted was estimated at $5.15 per share. These options vest over three years and have a term of 10 years. On April 1, 2015, the Board of Directors granted stock options to purchase 6,667 shares of common stock at an exercise price of $9.00 per share. The weighted average grant-date fair value of the options granted was estimated at $2.44 per share. These options vested immediately and have a term of 5 years. On June 1, 2015, the Board of Directors granted stock options to purchase 33,333 shares of common stock at an exercise price of $9.00 per share. The weighted average grant-date fair value of the options granted was estimated at $4.10 per share. These options vest over three years and have a term of 10 years. In October 2015, the Company appointed two new directors. Each director received an option to purchase 26,667 shares of common stock at an exercise price of $8.10 per share in consideration for their services as members of the Board of Directors. The weighted average grant-date fair value of the options was estimated at $4.17 per share. These options vest over 14 months and have a term of 10 years. On March 30, 2016, the Company assumed stock options to purchase 77,252 shares of common stock in connection with the acquisition of LMB. The LMB option holders received stock options to purchase 71,217 shares at an exercise price of $0.015 per share and 6,035 shares at an exercise price of $13.65 per share. Pursuant to the original grants, options to purchase 4,829 shares were immediately vested and options to purchase 72,423 shares vest over three years. The March 30, 2016 estimated fair value of the stock options was $670,242. The fair value of the vested options was estimated at $461,808 and has been included in the purchase price of LMB. The March 30, 2016 fair value of the unvested options was estimated at $208,434 per share and will be expensed over the remaining vesting period of the options. These options all had original terms of 10 years. On June 23, 2016, the Board of Directors granted stock options to four directors. Each director received an option to purchase 13,333 shares of common stock at an exercise price of $12.00 per share in consideration for their services as members of the Board of Directors. The weighted average grant-date fair value of the options was estimated at $6.58 per share. These options vest in full on June 23, 2017 and have a term of 10 years. In July 2016, the Board of Directors granted stock options to purchase a total of 138,267 shares to three employees at prices ranging from $10.50 to $13.50 per share. The weighted average grant date fair value of the options was estimated at $7.70 per share. These options vest over terms of 19 to 48 months and have a term of 10 years. Stock-based compensation expense for the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014 was $732,151, $486,271 and $470,185, respectively. At September 30, 2016, unrecognized total compensation cost related to unvested awards of $1,510,923 is expected to be recognized over a weighted average period of 1.67 years. Warrants The Company has reserved 1,203,940 shares of common stock for the exercise of outstanding warrants. The following table summarizes the warrants outstanding at September 30, 2016: Exercise price Number Expiration Dates Investor Warrants $ 9.00 226,671 September 12, 2019 Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Warrants underlying Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Placement Agent Share Warrants 9.00 66,667 September 12, 2019 Investor Warrants 9.00 143,025 March 19, 2020 - June 26, 2020 Investor Warrants 9.00 59,444 July 2, 2020 - September 14,2020 Investor Warrants 9.00 38,889 (1) November 5, 2020 - November 20, 2020 Investor Warrants 9.00 142,222 (1) January 7, 2021 - March 21, 2021 Investor Warrants 9.00 126,667 (1) April 15, 2021 - April 25, 2021 LMB Warrants 6.15 90,151 June 12, 2019 - March 2, 2021 LMB Warrants 9.90 8,155 September 30, 2019 - January 8, 2020 LMB Warrants 20.70 17,721 November 3, 2019 - March 6, 2020 LMB Warrants 7.50 73,883 August 18, 2020 - March 14, 2021 LMB Warrants 13.65 53,110 March 24, 2022 - April 29, 2022 Financial Advisor Warrants 3.00 66,667 August 15, 2021 1,203,940 (1) Fair value of these warrants are included in the derivative warrant liability On March 30, 2016, the Company granted warrants to purchase 243,020 shares of common stock in connection with the acquisition of LMB. The warrants have exercise prices between $6.15 and $20.70 per share. All warrants were vested at March 30, 2016. The fair value of the warrants was estimated at $1,071,172 and has been included in the purchase price of LMB. On August 16, 2016, the Company granted warrants to purchase 66,667 shares of common stock in connection with a one year financial advisory agreement. The warrants were vested on issuance, have an exercise price of $3.00 per share and are exercisable on a cash or cashless basis. The fair value of the warrants was estimated at $477,181 and recorded as a prepaid expense on the issuance date. During the year ended September 30, 2016, the Company expensed $60,000 of the initial prepaid expense amount and the balance will be expensed over the remaining term of the agreement. At September 30, 2016, the weighted average remaining life of all of the outstanding warrants is 3.77 years, all warrants are exercisable, and the aggregate intrinsic value for the warrants outstanding was $1,273,985.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes to Financial Statements
NOTE 9. RELATED PARTY TRANSACTIONS	As of March 31, 2017 and September 30, 2016, the Company owed $27,637 to a company affiliated through common ownership for the expenses the related party paid on the Company’s behalf and services performed by the related party. Our Chairman of the Board, Leonard Mazur, is the cofounder and Vice Chairman of Akrimax Pharmaceuticals, LLC (“Akrimax”), a privately held pharmaceutical company specializing in producing cardiovascular and general pharmaceutical products (see Note 3). Our Chairman of the Board, Leonard Mazur, and our Chief Executive Officer, Myron Holubiak, were co-founders and significant shareholders in LMB. In connection with the acquisition of LMB, our Chairman purchased an additional 333,333 shares of the Company. The Company has outstanding debt due to Leonard Mazur and Myron Holubiak (see Note 4). General and administrative expense for each of the six months ended March 31, 2017 and 2016 includes $24,000 paid to a financial consultant who is a stockholder of the Company.	The Company’s headquarters were previously located in Maynard, MA in the office space of a company affiliated through common ownership. In connection with the March 30, 2016 acquisition of LMB, the Company moved its principal executive offices to Cranford, NJ. The Company did not record any revenue or expense related to the use of the Maynard, MA office space as management has determined the usage to be immaterial and the affiliate has not charged for the usage. As of September 30, 2016 and 2015, the Company owed $27,637 and $70,386, respectively, to a company affiliated through common ownership for the expenses the related party paid on the Company’s behalf and services performed by the related party. Our Chairman of the Board, Leonard Mazur, is the cofounder and Vice Chairman of Akrimax Pharmaceuticals, LLC (“Akrimax”), a privately held pharmaceutical company specializing in producing cardiovascular and general pharmaceutical products (see Note 3). Our Chairman of the Board, Leonard Mazur, and our Chief Executive Officer, Myron Holubiak, are co-founders and were significant shareholders in LMB. In connection with the acquisition of LMB, our Chairman purchased an additional 333,333 shares of the Company.

EMPLOYMENT AND CONSULTING AGREE

EMPLOYMENT AND CONSULTING AGREEMENTS	12 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
NOTE 10. EMPLOYMENT AND CONSULTING AGREEMENTS	Employment Agreements The Company entered into a three year employment agreement with its Chief Executive Officer, Leonard Mazur, effective September 12, 2014. Upon expiration, the agreement automatically renews for successive periods of one-year. The agreement requires the Company to pay base compensation plus incentives over the employment term plus severance benefits upon the occurrence of certain events as described in the agreement. Under the agreement, Leonard Mazur was granted options to purchase 220,000 shares of common stock (see Note 7 - Stock Options On March 30, 2016, in connection with the acquisition of LMB, the Company entered into a three year employment agreement with Myron Holubiak to serve as Chief Executive Officer. Upon expiration, the agreement automatically renews for successive periods of one-year. The agreement requires the Company to pay base compensation plus incentives over the employment term plus severance benefits upon the occurrence of certain events as described in the agreement. The Company has employment agreements with certain other employees that require the Company to pay base compensation plus incentives over the employment term plus severance benefits upon the occurrence of certain events as described in the agreement. Consulting Agreements Effective September 1, 2014, the Company entered into three consulting agreements. Two of the agreements are for financial consulting services including accounting, preparation of financial statements and filings with the SEC. The third agreement is for financing activities, product development strategies and corporate development. The agreements may be terminated by the Company or the consultant with 90 days written notice. Consulting expense under the agreements for the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014 was $460,000, $348,000 and $29,000, respectively. Consulting expense for the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014 includes $48,000, $48,000 and $4,000, respectively, paid to a financial consultant who is a stockholder of the Company. In addition, one financial consulting services agreement provides for the grant of options to purchase 33,000 shares of common stock contingent upon approval by the Board of Directors. The options were granted on June 1, 2015.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Note 11. COMMITMENTS AND CONTINGENCIES	Operating Lease The Company leases office space from Akrimax (see Note 8) in Cranford, New Jersey at a monthly rental rate of $2,167 pursuant to an agreement which currently expires on October 31, 2017. Rent expense for the year ended September 30, 2016 was $13,002. There was no rent expense for the year ended September 30, 2015 and the nine months ended September 30, 2014. Future minimum rentals for the years ending September 30, 2017 and 2018 are $26,004 and $2,167, respectively Legal Proceedings The Company is not involved in any litigation that we believe could have a material adverse effect on our financial position or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers, threatened against or affecting our company or our officers or directors in their capacities as such.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Note 12. INCOME TAXES	There was no provision for federal or state income taxes for the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014 due to the Company’s operating losses and a full valuation reserve on deferred tax assets. In addition, Citius Pharmaceuticals, LLC (the accounting acquirer) was treated as a partnership for federal and state income taxes from inception until the Reverse Acquisition was completed on September 12, 2014. A partnership’s income or loss is allocated directly to the partners for income tax purposes. The income tax benefit differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income due to the following: Year Ended September 30, 2016 Year Ended September 30, 2015 Nine Months Ended September 30, 2014 Computed “expected” tax benefit (35.0 )% (35.0 )% (35.0 )% Increase (decrease) in income taxes resulting from: State taxes, net of federal benefit (5.2 )% (5.2 )% (5.2 )% Permanent differences 4.2 % (4.6 )% - % Tax reporting differences due to the reverse acquisition - % - % 11.3 % Increase in the valuation reserve 36.0 % 44.8 % 28.9 % 0.0 % 0.0 % 0.0 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: September 30, 2016 September 30, 2015 Deferred tax assets: Net operating loss carryforward $ 3,801,000 $ 1,131,000 Stock-based compensation 703,000 384,000 Valuation allowance (4,504,000 ) (1,515,000 ) Deferred tax assets $ - $ - The Company has recorded a valuation allowance against deferred tax assets as the utilization of the net operating loss carryforward and other deferred tax assets is uncertain. There were no deferred tax assets or liabilities carried forward from Trail One, Inc. (the legal acquirer in the Reverse Acquisition) as the Company did not acquire any assets or liabilities in the Reverse Acquisition. Accordingly, during the nine months ended September 30, 2014, the valuation allowance increased by $216,000. During the years ended September 30, 2016 and 2015, the valuation allowance increased by $2,989,000 and $1,299,000, respectively. The increase in the valuation allowance during the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014 was due to the Company’s net operating loss. At September 30, 2016, the Company has a net operating loss carryforward of approximately $9,456,000 which begins expiring in 2034.

OPERATING LEASE

OPERATING LEASE	6 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
NOTE 13. OPERATING LEASE	LMB leases office space from Akrimax (see Note 7) in Cranford, New Jersey at a monthly rental rate of $2,167 pursuant to an agreement which currently expires on October 31, 2017. Rent expense for the six months ended March 31, 2017 was $13,000. There was no rent expense for the six months ended March 31, 2016.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes to Financial Statements
NOTE 14. SUBSEQUENT EVENTS	On April 7, 2017, the Company issued a three year Unit Purchase Option Agreement to a consultant for the purchase 38,000 units at a purchase price of $9.00 cents per unit. Each unit consists of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $9.00 cents per share which expires three years after exercise of the Unit Purchase Option Agreement. The consultant will provide the Company with business development and financing assistance. In April 2017, the Company issued a $650,000 demand note to its Chairman under the same terms as the notes issued during the six months ended March 31, 2017. The Company issued demand promissory notes in favor of Leonard Mazur, its Executive Chairman, during 2016 and through April 2017 in the aggregate principal amount of $2,500,000 (collectively, the “Notes”). In May 2017, the Company entered into a conversion agreement (the "Conversion Agreement") with Mr. Mazur, pursuant to which the Company and Mr. Mazur consolidated the Notes and converted them into a convertible promissory note (the “A&R Note”). The A&R Note matures on June 30, 2018. The A&R Note is convertible into shares of the Company’s common stock, at the sole discretion of Mr. Mazur, at a conversion price equal to 75% of the price of the shares of the Company’s common stock sold in the Company’s securities offering pursuant to the S-1 registration statement filed with the U.S. Securities and Exchange Commission (the “Securities Offering”) of which this prospectus forms a part. In the third quarter the Company completed a bridge financing pursuant to which it issued an unsecured future advance convertible promissory note in the principal amount of up to $1,500,000 (the “Bridge Note”) to Mr. Mazur. The Company may draw on the Bridge Note as needed up to the $1,500,000 principal amount. Mr. Mazur has extended advances to the Company totaling $240,000 under this Bridge Note. The Bridge Note is due and payable on December 31, 2017. It bears interest at the rate of the Wall Street Journal prime rate plus one percent per year, compounded annually, and is convertible into shares of the Company’s common stock at a conversion price equal to 75% of the price per share paid by investors in the Securities Offering. In addition, in the event the Company enters into a debt financing with a third party on terms better than those of the Bridge Note while the Bridge Note remains outstanding, the Company will notify Mr. Mazur of such terms and he may elect, in his sole discretion, to amend his Bridge Note to incorporate such terms. In addition, the Company has engaged Paulson Investment Company, LLC to secure additional debt financing. On May 12, 2017, the Company filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission to register up to approximately $18 million of securities, the proceeds of which will be used towards the research and development of our products and product candidates, and the remainder for capital expenditures, working capital and other general corporate purposes. No assurance can be given that such offering will be consummated, or if consummated, will raise the maximum amount contemplated thereunder. The Company may not sell securities pursuant to the registration statement until it is declared effective.	The Company issued demand promissory notes in favor of Leonard Mazur, Chairman of the Board, on October 20, 2016 in the principal amount of $500,000, on December 9, 2016 in the principal amount of $50,000 and on December 14, 2016 in the principal amount of $100,000 (collectively, the “Notes”). The Notes mature on the earlier of December 31, 2017 or demand by the lender. And accrue interest at the prime rate plus 1%. The Board of Directors has authorized additional revolving demand promissory notes with Leonard Mazur on substantially similar terms in an aggregate principal amount of up to $2,500,000, of which $1,150,000 is outstanding at December 15, 2016. In October 2016, the Company commenced an offering (the “2016 Offering”) of up to 1,000,000 units (the “2016 Offering Units”), each 2016 Offering Unit consists of (i) one share of common stock and (ii) a warrant to purchase one share of common stock (the “2016 Offering Warrants”) for gross proceeds of up to $6,000,000 with an over-subscription allotment of up to $2,000,000. Each 2016 Offering Unit will be sold at a negotiated price of $6.00. Each 2016 Offering Warrant shall have an exercise price of $8.25 (the “Exercise Price”). Each 2016 Offering Warrant is exercisable for a period of five years from the date of issuance. The Placement Agent will receive a 10% cash commission on the gross proceeds of each sale of the 2016 Offering Units. In addition, on each closing the Placement Agent will also receive (i) an expense allowance equal to 3% of the proceeds of the sale, and (ii) warrants to purchase a number of shares of common stock equal to 10% of the 2016 Offering Units sold at an exercise price of $8.25 per share. On November 23, 2016, the Company sold 65,000 2016 Offering Units for gross proceeds of $390,000. Additionally, a warrant to purchase 6,500 shares of common stock was granted to the Placement Agent pursuant to the above pricing terms.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Summary Of Significant Accounting Policies Policies
Basis of Preparation	The accompanying consolidated financial statements include the operations of Citius Pharmaceuticals, Inc., and its wholly-owned subsidiaries, Citius Pharmaceuticals, LLC, and LMB since the March 30, 2016 acquisition. All significant inter-company balances and transactions have been eliminated in consolidation.
Use of Estimates	Our accounting principles require our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Estimates having relatively higher significance include the accounting for acquisitions, stock-based compensation, valuation of warrants, and income taxes. Actual results could differ from those estimates and changes in estimates may occur.	The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates having relatively higher significance include the accounting for acquisitions, stock-based compensation, valuation of warrants, and income taxes. Actual results could differ from those estimates and changes in estimates may occur.
Reverse Stock Split	On June 9, 2017, the Company affected a 1-for-15 reverse stock split of its issued and outstanding shares of common stock, $0.001 par value. Under the terms of the reverse stock split, fractional shares issuable to stockholders were rounded up to the nearest whole share, resulting in a reverse split slightly less than 1-for-15 in the aggregate. All per share amounts and number of shares (other than authorized shares) in the consolidated financial statements and related notes have been retroactively restated to reflect the reverse stock split.
Cash and Cash Equivalents		The Company considers all highly liquid instruments with maturities of less than three months at the time of purchase to be cash equivalents. From time to time, the Company may have cash balances in financial institutions in excess of insurance limits. The Company has never experienced any losses related to these balances.
Property and Equipment		Property and equipment are valued at cost and are being depreciated over their useful lives using the straight-line method for financial reporting purposes. Routine maintenance and repairs are charged to expense as incurred. Expenditures which materially increase the value or extend useful lives are capitalized. Property and equipment are depreciated over estimated useful lives of three to five years. Property and equipment consisted of the following at September 30, 2016: 2016 Computer equipment $ 8,522 Less accumulated depreciation (4,780 ) $ 3,742 Depreciation and amortization expense for the year ended September 30, 2016 was $1,343. There was no depreciation and amortization expense for the year ended September 30, 2015 and the nine months ended September 30, 2014.
Research and Development		Research and development costs, including upfront fees and milestones paid to collaborators who are performing research and development activities under contractual agreement with the Company, are expensed as incurred. The Company defers and capitalizes its nonrefundable advance payments that are for research and development activities until the related goods are delivered or the related services are performed. When the Company is reimbursed by a collaboration partner for work the Company performs, it records the costs incurred as research and development expenses and the related reimbursement as a reduction to research and development expenses in its consolidated statement of operations. Research and development expenses primarily consist of clinical and non-clinical studies, materials and supplies, third-party costs for contracted services, and payments related to external collaborations and other research and development related costs.
In-process Research and Development and Goodwill		In-process research and development represents the value of LMB’s leading drug candidate which is an antibiotic solution used to treat catheter-related bloodstream infections (Mino-Lok™). Goodwill represents the value of LMB’s industry relationships and its assembled workforce. In-process research and development and goodwill will not be amortized but will be tested at least annually for impairment. The Company reviews intangible assets annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life of any intangible asset. If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value in the period identified. No triggering events occurred since the acquisition of LMB that would suggest that a potential impairment may have occurred through September 30, 2016. The Company evaluates the recoverability of goodwill annually or more frequently if events or changes in circumstances indicate that the carrying value of an asset might be impaired. Goodwill is first qualitatively assessed to determine whether further impairment testing is necessary. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy and changes in the composition or carrying amount of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step process is then performed. The Company performed a qualitative assessment for our 2016 analysis of goodwill. Based on this assessment, management does not believe that it is more likely than not that the carrying value of the reporting unit exceeds its fair value. Accordingly, no further testing was performed as management believes that there are no impairment issues in regards to goodwill as of September 30, 2016.
Patents and Trademarks		Certain costs of outside legal counsel related to obtaining trademarks for the Company are capitalized. Patent costs are amortized over the legal life of the patents, generally twenty years, starting at the patent issuance date. The costs of unsuccessful and abandoned applications are expensed when abandoned. The cost of maintaining existing patents are expensed as incurred.
Revenue Recognition		The Company recognizes revenue using the four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the selling price is fixed and determinable, and (4) collectability is reasonably assured. Provisions for discounts, rebates, estimated returns and allowances, and other adjustments are provided in the period that the revenue is recorded. The Company’s license and collaboration agreements with certain partners also provide for contingent payments to us based solely upon the performance of the respective partner. For such contingent amounts we expect to recognize the payments as revenue when earned under the applicable contract, which is generally upon completion of performance by the respective partner, provided that collection is reasonably assured. The Company’s license and collaboration agreements with its partners also provide for payments to us upon the achievement of specified sales volumes of approved drugs. We consider these payments to be similar to royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured.
Stock-Based Compensation		The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees and directors, net of expected forfeitures, as an expense in the consolidated statement of operations over the requisite service period based on the fair value for each stock award on the grant date. The fair value of each option grant is estimated as of the date of grant using the Black-Scholes option pricing model. Due to its limited operating history, limited number of sales of its common stock and limited history of its shares being publicly traded, the Company estimates its volatility in consideration of a number of factors including the volatility of comparable public companies. The estimated forfeiture rate is based on historical forfeiture information as well as subsequent events occurring prior to the issuance of the financial statements. Because our stock options have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, the existing model may not necessarily provide a reliable single measure of fair value of our stock options The Company recognizes compensation costs resulting from the issuance of stock-based awards to non-employees as an expense in the consolidated statement of operations over the service period based on the measurement of fair value for each stock award.
Derivative Instruments		The Company generally does not use derivative instruments to hedge exposures to cash-flow or market risks; however, certain warrants to purchase common stock that do not meet the requirements for classification as equity are classified as liabilities. In such instances, net-cash settlement is assumed for financial reporting purposes, even when the terms of the underlying contracts do not provide for a net-cash settlement. Such financial instruments are initially recorded at fair value with subsequent changes in fair value charged (credited) to operations in each reporting period. If these instruments subsequently meet the requirements for classification as equity, the Company reclassifies the fair value to equity.
Income Taxes		Citius Pharmaceuticals, LLC was treated as a partnership for federal and state income taxes prior to the September 12, 2014 Reverse Acquisition. A partnership’s income or loss is allocated directly to the Members for income tax purposes. The Company follows accounting guidance regarding the recognition, measurement, presentation and disclosure of uncertain tax positions in the consolidated financial statements. Tax positions taken or expected to be taken in the course of preparing our tax returns, including the position that Citius Pharmaceuticals, LLC qualified as a pass-through entity, are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authorities. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded in the consolidated financial statements. There are no uncertain tax positions that require accrual or disclosure as of September 30, 2016. Any interest or penalties are charged to expense. During the years ended September 30, 2016 and 2015, and the nine months ended September 30, 2014, the Company did not recognize any interest and penalties. Tax years subsequent to December 31, 2012 are subject to examination by federal and state authorities. After the Reverse Acquisition, we recognize deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. We provide a valuation allowance, if necessary, for deferred tax assets for which we do not consider realization of such assets to be “more-likely-than-not”. The deferred tax benefit or expense for the period represents the change in the deferred tax asset or liability from the beginning to the end of the period.
Basic and Diluted Net Loss per Common Share	Basic and diluted net loss per common share is computed by dividing net loss in each period by the weighted average number of shares of common stock outstanding during such period. For the periods presented, common stock equivalents, consisting of options, warrants and convertible securities were not included in the calculation of the diluted loss per share because they were anti-dilutive.	Basic and diluted net loss per common share is computed by dividing net loss in each period by the weighted average number of shares of common stock outstanding during such period. For the periods presented, common stock equivalents, consisting of options, warrants and convertible securities were not included in the calculation of the diluted loss per share because they were anti-dilutive.
Fair Value of Financial Instruments		The financial statements include various estimated fair value information. Financial instruments are initially recorded at historical cost. If subsequent circumstances indicate that a decline in the fair value of a financial asset is other than temporary, the financial asset is written down to its fair value. Unless otherwise indicated, the fair values of financial instruments approximate their carrying amounts. By their nature, all financial instruments involve risk, including credit risk for non-performance by counterparties. The fair values of cash and cash equivalents, accounts payable, accrued interest, accrued expenses, notes payable and due to related party approximate their recorded amounts because of their relatively short settlement terms. The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. The Company’s financial liabilities measured at fair value on September 30, 2016 and 2015 consists solely of the derivative warrant liability which is classified as Level 3 in fair value hierarchy (see Note 6). The Company uses a valuation method, the Black-Scholes option pricing model, and the requisite assumptions in estimating the fair value for the warrants considered to be derivative instruments. The Company has no financial assets measured at fair value. The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the years ended September 30, 2016 and 2015, and the nine month period ended September 30, 2014.
Segment Reporting		The Company currently operates as a single segment.
Concentrations of Credit Risk		The Company has no significant off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other hedging arrangements.
Recently Issued Accounting Standards		In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” which applies should a company be facing probable liquidation within one year of the issuance of the financial statements, but is not actually in liquidation at the time of issuance. The applicable accounting basis for presentation remains as a going concern, but if liquidation within one year is probable, then certain disclosures must be included in the financial statement presentation. ASU 2014-15 is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently in the process of evaluating the impact of adoption of this ASU on the consolidated financial statements. In August 2015, the FASB also issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date which deferred the effective date of ASU 2014-09 by one year. Originally scheduled to be effective for fiscal years beginning after December 15, 2016, ASU 2015-14 is effective for the year ended September 30, 2019. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The new standard is effective for annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of the adoption of this ASU on the financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation” to require changes to several areas of employee share-based payment accounting in an effort to simplify share-based reporting. The update revises requirements in the following areas: minimum statutory withholding, accounting for income taxes, forfeitures, and intrinsic value accounting for private entities. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of this ASU on the financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” to address how certain cash receipts and cash payments are presented and classified in the statement of cash flows in an effort to reduce existing diversity in practice. The update includes eight specific cash flow issues and provides guidance on the appropriate cash flow presentation for each. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017. The Company does not expect the adoption of this guidance to have a material impact on the financial statements.

NATURE OF OPERATIONS AND BASI22

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Tables)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Nature Of Operations And Basis Of Presentation Tables
Acquisition Pro forma information	2016 Revenues $ — Net loss $ (5,343,124 ) Net loss per share – basic and diluted $ (1.24 )	Year Ended September 30, 2016 2015 Revenues $ - $ - Net loss $ (11,548,647 ) $ (6,640,600 ) Net loss per share - basic and diluted $ (2.52 ) $ (1.64 )

SUMMARY OF SIGNIFICANT ACCOUN23

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Sep. 30, 2016
Summary Of Significant Accounting Policies Tables
Property and equipment	2016 Computer equipment $ 8,522 Less accumulated depreciation (4,780 ) $ 3,742

DERIVATIVE WARRANT LIABILITY (T

DERIVATIVE WARRANT LIABILITY (Tables)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Derivative Warrant Liability Tables
Schedule of derivative warrant liabilities	Six Months Ended March 31, 2017 Six Months Ended March 31, 2016 Derivative warrant liability, beginning of period $ 1,681,973 $ 738,955 Fair value of warrants issued — 704,005 Total realized/unrealized losses (gains) included in net loss (442,390 ) 173,906 Reclassification of liability to additional paid-in capital (813,319 ) (114,308 ) Derivative warrant liability, end of period $ 426,264 $ 1,502,558	Year Ended September 30, 2016 Year Ended September 30, 2015 Nine Months Ended September 30, 2014 Derivative warrant liability, beginning of period $ 738,955 $ 1,450,943 $ - Fair value of warrants issued 1,198,564 768,435 1,459,531 Total realized/unrealized losses (gains) included in net loss 838,219 (332,095 ) (8,588 ) Reclassification of liability to additional paid-in capital (1,093,765 ) (1,148,328 ) - Derivative warrant liability, end of period $ 1,681,973 $ 738,955 $ 1,450,943

COMMON STOCK, STOCK OPTIONS A25

COMMON STOCK, STOCK OPTIONS AND WARRANTS (Tables)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Common Stock Stock Options And Warrants Tables
Schedule of fair value stock option grants		Year Ended September 30, 2016 Year Ended September 30, 2015 Nine Months Ended September 30, 2014 Risk-free interest rate 0.95-1.40 % 1.37-1.52 % 1.83 % Expected dividend yield 0 % 0 % 0 % Expected term 4.75 - 9 years 2.5 - 6 years 5 - 6 years Forfeiture rate 0 % 0 % 0 % Expected volatility 57-74 % 53-58 % 54 %
Schedule of stock option activity	Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at September 30, 2016 582,185 $ 8.11 8.59 years $ 1,355,924 Granted 8,666 10.05 Exercised — — Forfeited or expired — — Outstanding at March 31, 2017 590,851 $ 8.14 8.12 years $ 436,911 Exercisable at March 31, 2017 376,489 $ 6.49 7.66 years 427,036	Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2014 - $ - Granted 220,000 6.75 Exercised - - Forfeited or expired - - Outstanding at September 30, 2014 220,000 6.75 9.96 years $ 495,000 Granted 40,000 9.00 Exercised - - Forfeited or expired - - Outstanding at September 30, 2015 260,000 7.10 8.94 years $ 297,000 Granted 244,933 11.41 Assumed in acquisition 77,252 1.08 Exercised - - Forfeited or expired - - Outstanding at September 30, 2016 582,185 $ 8.11 8.59 years $ 1,355,924 Exercisable at September 30, 2016 342,444 $ 6.74 8.14 years $ 1,059,615
Schedule of Warrants	Exercise price Number Expiration Dates Investor Warrants $ 9.00 226,671 September 12, 2019 Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Warrants underlying Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Placement Agent Share Warrants 9.00 66,667 September 12, 2019 Investor Warrants 9.00 143,025 March 19, 2020 – June 26, 2020 Investor Warrants 9.00 59,444 July 2, 2020 – September 14, 2020 Investor Warrants 9.00 38,889 November 5, 2020 – November 20, 2020 Investor Warrants 9.00 142,222 January 7, 2021 – March 21, 2021 Investor Warrants 9.00 126,667 (1) April 15, 2021 – April 25, 2021 LMB Warrants 6.15 90,151 June 12, 2019 - March 2, 2021 LMB Warrants 9.90 8,155 September 30, 2019 - January 8, 2020 LMB Warrants 20.70 17,721 November 3, 2019 - March 6, 2020 LMB Warrants 7.50 73,883 August 18, 2020 – March 14, 2021 LMB Warrants 13.65 53,110 March 24, 2022 – April 29, 2022 Financial Advisor Warrants 3.00 66,667 August 15, 2021 2016 Offering Warrants 8.25 128,017 November 23, 2021 - February 27, 2022 2016 Offering Placement Agent Warrants 8.25 12,802 November 23, 2021 - February 27, 2022 1,344,759	Exercise price Number Expiration Dates Investor Warrants $ 9.00 226,671 September 12, 2019 Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Warrants underlying Placement Agent Unit Warrants 9.00 45,334 September 12, 2019 Placement Agent Share Warrants 9.00 66,667 September 12, 2019 Investor Warrants 9.00 143,025 March 19, 2020 - June 26, 2020 Investor Warrants 9.00 59,444 July 2, 2020 - September 14,2020 Investor Warrants 9.00 38,889 (1) November 5, 2020 - November 20, 2020 Investor Warrants 9.00 142,222 (1) January 7, 2021 - March 21, 2021 Investor Warrants 9.00 126,667 (1) April 15, 2021 - April 25, 2021 LMB Warrants 6.15 90,151 June 12, 2019 - March 2, 2021 LMB Warrants 9.90 8,155 September 30, 2019 - January 8, 2020 LMB Warrants 20.70 17,721 November 3, 2019 - March 6, 2020 LMB Warrants 7.50 73,883 August 18, 2020 - March 14, 2021 LMB Warrants 13.65 53,110 March 24, 2022 - April 29, 2022 Financial Advisor Warrants 3.00 66,667 August 15, 2021 1,203,940

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Sep. 30, 2016
Income Taxes Tables
Schedule of U.S. federal income tax rate	Year Ended September 30, 2016 Year Ended September 30, 2015 Nine Months Ended September 30, 2014 Computed “expected” tax benefit (35.0 )% (35.0 )% (35.0 )% Increase (decrease) in income taxes resulting from: State taxes, net of federal benefit (5.2 )% (5.2 )% (5.2 )% Permanent differences 4.2 % (4.6 )% - % Tax reporting differences due to the reverse acquisition - % - % 11.3 % Increase in the valuation reserve 36.0 % 44.8 % 28.9 % 0.0 % 0.0 % 0.0 %
Schedule of deferred income taxes	September 30, 2016 September 30, 2015 Deferred tax assets: Net operating loss carryforward $ 3,801,000 $ 1,131,000 Stock-based compensation 703,000 384,000 Valuation allowance (4,504,000 ) (1,515,000 ) Deferred tax assets $ - $ -

NATURE OF OPERATIONS AND BASI27

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2016	Sep. 30, 2016	Sep. 30, 2015
Nature Of Operations And Basis Of Presentation Details
Revenues
Net loss	$ (5,343,124)	$ (11,548,647)	$ (6,640,600)
Net loss per share – basic and diluted	$ (1.24)	$ (2.52)	$ (1.64)

NATURE OF OPERATIONS AND BASI28

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details Narrative) - USD ($)	Jun. 09, 2017	Sep. 15, 2016	Mar. 31, 2017	Sep. 30, 2016	Jan. 31, 2017	Mar. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Sep. 12, 2014	May 31, 2014
Entity incorporation date				Jan. 23, 2007
Common stock, shares									1,441,681
Issued and outstanding common stock									72.00%
Common stock, shares outstanding									333,333
Common Stock Shares Issued			5,033,616	4,875,871	29,729		2,274,526	866,667		13,333
Converted common stock warrants				3,645,297
Converted common stock options				1,158,770
Reverse Stock Split	1-for-15	Reverse stock split of our common stock by a ratio of not less than 1-for-8 and not more than 1-for-20 at any time prior to September 15, 2017.		Stockholders granted the Board of Directors the authority to effect a reverse stock split of our common stock by a ratio of not less than 1-for-8 and not more than 1-for-20 at any time prior to September 15, 2017.
Common Stock Par Value	$ 0.001		$ 0.001	$ 0.001			$ 0.001			$ 3.75
LMB [Member]
Issued and outstanding common stock						41.00%
Common Stock Shares Issued			1,942,456	1,942,456		1,942,456
Converted common stock warrants			243,020	243,020		243,220
Converted common stock options			77,252	77,252		77,252
Cash				$ 255,748
Prepaid expenses			$ 20,544	20,544
Property and equipment			5,085	5,085
Deposits			2,167	2,167
Intangible assets			19,400,000	19,400,000
Accounts payable			244,776	244,776
Accrued expenses			598,659	598,659
Accrued compensation			615,000	615,000
Accrued interest			23,862	23,862
Notes payable			772,970	772,970
Net assets acquired			17,428,277	17,428,277
Outstanding common stock options			19,015,073	19,015,073
Fair value of common stock issued			17,482,093	17,482,093
Fair value of warrants issued estimated			1,071,172	1,071,172
Fair value of vested options estimated			461,808	461,808
Goodwill			1,586,796	$ 1,586,796
Purchase price			19,015,073
Tangible assets consisting of cash			$ 255,748

GOING CONCERN UNCERTAINTY AND29

GOING CONCERN UNCERTAINTY AND MANAGEMENT’S PLAN (Details Narrative) - USD ($)	6 Months Ended		9 Months Ended	12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Going Concern Uncertainty And Managements Plan Details Narrative
Cash flows from operations	$ (2,139,393)	$ (1,571,538)	$ (183,164)	$ (5,900,421)	$ (2,385,416)	$ (183,164)
Working capital deficit	$ (6,999,252)			$ (4,291,123)

BUSINESS AGREEMENTS (Details Na

BUSINESS AGREEMENTS (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016	May 31, 2014
Reimbursement		$ 292,575
Maintenance fee	$ 30,000
Increase in annual maintenance fee	90,000
Payable amount to NAT	$ 1,390,000
LMB [Member]
License fee				$ 350,000
Maintenance fee			$ 30,000
Licence period			over five years to $90,000,
Sales milestones			$ 1,050,000

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015
Summary Of Significant Accounting Policies Details
Computer equipment		$ 8,522
Less accumulated depreciation		(4,780)
Total	$ 2,399	$ 3,742

SUMMARY OF SIGNIFICANT ACCOUN32

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	6 Months Ended		9 Months Ended	12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015
Summary Of Significant Accounting Policies Details Narrative
Depreciation	$ 1,343			$ 1,343

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative)

1 Months Ended

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Apr. 30, 2016USD ($)

Mar. 30, 2016USD ($)

Nov. 30, 2013USD ($)Unit

Apr. 30, 2013USD ($)

Mar. 31, 2017USD ($)

Mar. 31, 2016USD ($)

Mar. 31, 2017USD ($)

Mar. 31, 2016USD ($)

Sep. 30, 2014USD ($)

Sep. 30, 2016USD ($)$ / shares

Sep. 30, 2015USD ($)

Sep. 30, 2014USD ($)

Sep. 30, 2013USD ($)

Sep. 07, 2016USD ($)

Dec. 31, 2014USD ($)$ / sharesshares

Sep. 12, 2014shares

Jul. 31, 2014USD ($)$ / sharesshares

Interest expense

$ 19,851

$ 33,079

$ 93,067

$ 8,994

$ 7,500

$ 93,067

Principal amount

$ 600,000

Percentage of accrued interest

5.00%

Converted common stock

The unpaid principal and accrued interest will convert into common stock at the greater of the fair value of the common stock on the date of the conversion or $3.75 ($10.35 if the CompanyÂ’s common stock is admitted to trade on a national exchange prior to the date of conversion).

Common stock, shares | shares

333,333

Conversion price | $ / shares

$ 9.75

Number of promissory notes | Unit

2

Initial installment of principal amount

$ 100,000

Second installment of principal amount

100,000

Third installment of principal amount

100,000

Aggregate proceeds

$ 10,000,000

Debt issuance costs

$ 42,000

Notes assumed

$ 772,970

Principal amount

2,500,000

Outstanding amount

$ 1,850,000

$ 1,850,000

Percentage of accrued interest above prime rate

1.00%

1.00%

Additional notes payable

$ 1,350,000

$ 1,350,000

Chief Executive Officer [Member]

Principal amount

12,500

Executive Chairman [Member]

Notes payable

$ 500,000

Principal amount

760,470

Additional notes payable

$ 1,350,000

Chairman [Member]

Percentage of accrued interest above prime rate

1.00%

Repayment of principal amount

$ 600,000

Repayment of accured interest

1,985

Notes Payable One [Member]

Principal amount

$ 68,970

Interest rate

12.00%

Notes Payable [Member]

Principal amount

$ 704,000

Percentage of accrued interest above prime rate

1.00%

Investors One [Member]

Aggregate proceeds

6,500,000

Investors Two [Member]

Aggregate proceeds

$ 8,500,000

Investors Two [Member] | Convertible Promissory Notes [Member]

Principal amount

$ 225,000

Percentage of accrued interest

5.00%

Maturity period

10-year

Subordinated Convertible Promissory Note [Member]

Percentage of accrued interest

10.00%

Convertible notes outstanding

$ 350,000

Accrued interest

$ 44,245

Common stock, shares | shares

40,436

Conversion price | $ / shares

$ 9.75

Convertible promissory notes

$ 350,000

$ 600,000

Percentage of convertible promissory notes

10.00%

Leonard Mazur [Member]

Accrued interest

$ 1,985

Principal balance of notes payable

$ 760,470

Prime Rate

1.00%

1.00%

Demand promissory note

$ 500,000

Wall Street [Member]

Percentage of accrued interest

12.00%

Principal balance of notes payable

$ 68,970

Prime Rate

1.00%

Myron Holubiak [Member]

Accrued interest

$ 704,000

Principal balance of notes payable

12,500

Notes Payable Related Parties [Member]

Notes payable

$ 772,970

Promissory Notes [Member]

Convertible notes outstanding

$ 600,000

Accrued interest

$ 33,333

Common stock, shares | shares

70,371

Conversion price | $ / shares

$ 9

Convertible Promissory Notes [Member]

Convertible notes outstanding

$ 1,685,000

Accrued interest

$ 151,813

Common stock, shares | shares

204,090

Conversion price | $ / shares

$ 9

Convertible Promissory Notes [Member] | Investors One [Member]

Principal amount

$ 1,460,000

Percentage of accrued interest

3.00%

Maturity period

10-year

DERIVATIVE WARRANT LIABILITY (D

DERIVATIVE WARRANT LIABILITY (Details) - USD ($)	6 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Derivative Warrant Liability Details
Derivative warrant liability, beginning of period	$ 1,681,973	$ 738,955	$ 738,955	$ 1,450,943
Fair value of warrants issued		704,005	1,198,564	768,435	$ 1,459,531
Total realized/unrealized losses included in net loss	(442,390)	173,906	838,219	(332,095)	(8,588)
Reclassification of liability to additional paid-in capital	(813,319)	(114,308)	(1,093,765)	(1,148,328)
Derivative warrant liability, end of period	$ 426,264	$ 1,502,558	$ 1,681,973	$ 738,955	$ 1,450,943

DERIVATIVE WARRANT LIABILITY 35

DERIVATIVE WARRANT LIABILITY (Details Narrative) - USD ($)	Sep. 12, 2015	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Aug. 16, 2016	Mar. 30, 2016
Outstanding warrants to purchase of its common stock		126,667	307,778	202,469
Exercise price of warrant		$ 9	$ 9
Volatility rate		85.00%	73.00%	57.00%	54.00%
Risk-free interest rate		1.96%	1.14%	1.37%	1.83%
Anti dilution warrants expired	338,672	181,111	202,469
Reclassification from derivative warrant liability to additional paid-in capital	$ 1,148,328	$ 813,319	$ 1,093,765
Minimum [Member]
Volatility rate			57.00%	53.00%
Risk-free interest rate			0.95%	1.37%
Estimated life		4 years 15 days	4 years 9 months	2 years 6 months	5 years
Maximum [Member]
Volatility rate			74.00%	58.00%
Risk-free interest rate			1.40%	1.52%
Estimated life		4 years 26 days	9 years	6 years	6 years
Warrant [Member]
Exercise price of warrant						$ 3
Warrant [Member] | Minimum [Member]
Exercise price of warrant							$ 6.15
Estimated life			4 years 1 month 6 days	4 years 5 months 19 days
Warrant [Member] | Maximum [Member]
Exercise price of warrant							$ 20.70
Estimated life			4 years 6 months 26 days	4 years 11 months 16 days

COMMON STOCK, STOCK OPTIONS A36

COMMON STOCK, STOCK OPTIONS AND WARRANTS (Details)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Risk-free interest rate	1.96%	1.14%	1.37%	1.83%
Expected dividend yield		0.00%	0.00%	0.00%
Forfeiture rate		0.00%	0.00%	0.00%
Expected volatility	85.00%	73.00%	57.00%	54.00%
Minimum [Member]
Risk-free interest rate		0.95%	1.37%
Expected term	4 years 15 days	4 years 9 months	2 years 6 months	5 years
Expected volatility		57.00%	53.00%
Maximum [Member]
Risk-free interest rate		1.40%	1.52%
Expected term	4 years 26 days	9 years	6 years	6 years
Expected volatility		74.00%	58.00%

COMMON STOCK, STOCK OPTIONS A37

COMMON STOCK, STOCK OPTIONS AND WARRANTS (Details 1) - Stock Options [Member] - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015
Stock Options
Outstanding, beginning balance	582,185	260,000	220,000
Granted	8,666	244,933	40,000
Assumed in acquisition		$ 77,252
Exercised
Forfeited or expired
Outstanding, ending balance	590,851	582,185	260,000
Exercisable, ending balance	376,489	342,444
Weighted Average Exercise Price
Outstanding, beginning balance	$ 8.11	$ 7.10	$ 6.75
Granted	10.05	11.41	9
Assumed in acquisition		1.08
Exercised
Forfeited or expired
Outstanding, ending balance	8.14	8.11	$ 7.10
Exercisable, ending balance	$ 6.49	$ 6.74
Weighted Average Remaining Contractual Life (years)
Weighted Average Remaining Contractual Life (years), Beginning	8 years 7 months 2 days	8 years 11 months 9 days
Weighted Average Remaining Contractual Life (years), Ending	8 years 1 month 13 days	8 years 7 months 2 days	8 years 11 months 9 days
Exercisable Remaining Contractual Life (years)	7 years 7 months 28 days	8 years 1 month 21 days
Aggregate Intrinsic value
Outstanding beginning balance	$ 1,355,924	$ 297,000	$ 495,000
Outstanding ending balance	436,911	1,355,924	$ 297,000
Exercisable ending balance	$ 427,036	$ 1,059,615

COMMON STOCK, STOCK OPTIONS A38

COMMON STOCK, STOCK OPTIONS AND WARRANTS (Details 2) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016	Oct. 31, 2016
Exercise price			$ 8.25
Investor Warrants [Member]
Exercise price	$ 9	$ 9
Number	226,671	226,671
Expiration Date	September 12, 2019	September 12, 2019
Placement Agent Unit Warrants [Member]
Exercise price	$ 9	$ 9
Number	45,334	45,334
Expiration Date	September 12, 2019	September 12, 2019
Warrants underlying Placement Agent Unit Warrants [Member]
Exercise price	$ 9	$ 9
Number	45,334	45,334
Expiration Date	September 12, 2019	September 12, 2019
Placement Agent Share Warrants [Member]
Exercise price	$ 9	$ 9
Number	66,667	66,667
Expiration Date	September 12, 2019	September 12, 2019
Investor Warrants One [Member]
Exercise price	$ 9	$ 9
Number	143,025	143,025
Expiration Date	March 19, 2020 - June 26, 2020	March 19, 2020 - June 26, 2020
Investor Warrants Two [Member]
Exercise price	$ 9	$ 9
Number	59,444	59,444
Expiration Date	July 2, 2020 - September 14, 2020	July 2, 2020 - September 14, 2020
Investor Warrants Three [Member]
Exercise price	$ 9	$ 9
Number	38,889	38,889
Expiration Date	November 5, 2020 - November 20, 2020	November 5, 2020 - November 20, 2020
Investor Warrants Four [Member]
Exercise price	$ 9	$ 9
Number	142,222	142,222
Expiration Date	January 7, 2021 - March 21, 2021	January 7, 2021 - March 21, 2021
Investor Warrants Five [Member]
Exercise price	$ 9	$ 9
Number	126,667	126,667
Expiration Date	April 15, 2021 - April 25, 2021	April 15, 2021 - April 25, 2021
LMB Warrants One [Member]
Exercise price	$ 6.15	$ 6.15
Number	90,151	1,352,266
Expiration Date	June 12, 2019 - March 2, 2021	June 12, 2019 - March 2, 2021
LMB Warrants Two [Member]
Exercise price	$ 9.90	$ 9.90
Number	8,155	8,155
Expiration Date	September 30, 2019 - January 8, 2020	September 30, 2019 - January 8, 2020
LMB Warrants Three [Member]
Exercise price	$ 20.70	$ 20.70
Number	17,721	17,721
Expiration Date	November 3, 2019 - March 6, 2020	November 3, 2019 - March 6, 2020
LMB Warrants Four [Member]
Exercise price	$ 7.50	$ 7.50
Number	73,883	73,883
Expiration Date	August 18, 2020 - March 14, 2021	August 18, 2020 - March 14, 2021
LMB Warrants Five [Member]
Exercise price	$ 13.65	$ 13.65
Number	53,110	53,110
Expiration Date	March 24, 2022 - April 29, 2022	March 24, 2022 - April 29, 2022
Financial Advisor Warrants [Member]
Exercise price	$ 3	$ 3
Number	66,667	66,667
Expiration Date	August 15, 2021	August 15, 2021
Warrant [Member]
Number	1,344,759	1,203,940
Offering Warrants 2016 [Member]
Exercise price	$ 8.25
Number	128,017
Expiration Date	November 23, 2021 - February 27, 2022
Offering Placement Agent Warrants 2016 [Member]
Exercise price	$ 8.25
Number	12,802
Expiration Date	November 23, 2021 - February 27, 2022

COMMON STOCK, STOCK OPTIONS A39

COMMON STOCK, STOCK OPTIONS AND WARRANTS (Details Narrative)	Jun. 09, 2017$ / shares	Sep. 12, 2014USD ($)Unit$ / sharesshares	Jan. 31, 2017shares	Oct. 31, 2016Unit	Sep. 15, 2016	Jul. 31, 2016$ / sharesshares	Jun. 23, 2016Unit$ / sharesshares	Mar. 30, 2016USD ($)$ / sharesshares	Oct. 31, 2015Unit$ / sharesshares	Mar. 31, 2017USD ($)$ / sharesshares	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)Unit$ / sharesshares	Mar. 31, 2016USD ($)	Sep. 30, 2014USD ($)$ / sharesshares	Sep. 30, 2016USD ($)Unit$ / sharesshares	Sep. 30, 2015USD ($)Unit$ / sharesshares	Sep. 30, 2014USD ($)Unit$ / sharesshares	Aug. 16, 2016$ / sharesshares	Mar. 22, 2016USD ($)$ / sharesshares	May 31, 2014USD ($)$ / sharesshares	Dec. 31, 2013USD ($)
Common Stock Par Value | $ / shares	$ 0.001									$ 0.001		$ 0.001			$ 0.001	$ 0.001				$ 3.75
Common Stock Shares Issued			29,729							5,033,616		5,033,616		866,667	4,875,871	2,274,526	866,667			13,333
Common stock | $										$ 5,034		$ 5,034			$ 4,876	$ 2,275				$ 50,000
Reverse acquisition of common stock		333,333													5,000,000
Description of increase in authorized shares of common stock															Stockholders approved an increase in the number of shares of authorized common stock from 90,000,000 shares to 200,000,000 shares.
Description of reverse stock split	1-for-15				Reverse stock split of our common stock by a ratio of not less than 1-for-8 and not more than 1-for-20 at any time prior to September 15, 2017.										Stockholders granted the Board of Directors the authority to effect a reverse stock split of our common stock by a ratio of not less than 1-for-8 and not more than 1-for-20 at any time prior to September 15, 2017.
Deferred offering costs | $																					$ 25,000
Banking agreement for raise cash | $														$ 5,100,000			$ 5,100,000
Units issued to raise cash														566,667			566,667
Stock-based compensation expense | $										300,030	$ 115,614	541,544	$ 236,913	$ 470,185	$ 732,151	$ 486,271
Unrecognized total compensation cost related to unvested awards | $										$ 883,760		$ 883,760
Weighted average remaining life												18 months 36 days
Weighted average options granted | $ / shares						$ 7.70
Stock options purchase						138,267
Description of increase in authorized shares of common stock					Stockholders approved an increase in the number of shares of authorized common stock from 90,000,000 shares to 200,000,000 shares.
Number of unit offering | Unit				1,000,000
Common stock reserved for employees										20,171,370		20,171,370
Options to purchase of common stock										126,667		126,667			307,778	202,469
Exercise price of warrants | $ / shares										$ 9		$ 9			$ 9
Fair value of common stock | $												$ 298,774
Share issued			445,932
Common stock shares reserved for future issuance										20,171,370		20,171,370
Stock Options [Member]
Common Stock Shares Issued														866,667			866,667
Common stock outstanding										590,851		590,851		220,000	582,185	260,000	220,000
Shares available for future grants										4,137,230		4,137,230
Stock-based compensation expense | $														$ 470,185	$ 486,271	$ 732,151
Unrecognized total compensation cost related to unvested awards | $															$ 1,510,923
Weighted average remaining life															1 year 8 months 1 day	5 years	10 years
Stock options granted								6,035	26,667							6,667	220,000
Common stock exercise price per share | $ / shares								$ 13.65	$ 8.10					$ 6.75		$ 0.60	$ 6.75
Weighted average options granted | $ / shares									$ 4.17							$ 4.10	$ 5.15
Number of directors | Unit									2
Stock options vested								72,423
Estimated fair value | $								$ 670,242
Options to purchase of common stock														590,851			590,851
Stock Options [Member] | Stock Incentive Plan 2014 [Member]
Common Stock Shares Issued														275,816			275,816
Warrant [Member]
Common stock outstanding										1,344,759		1,344,759			1,203,940
Intrinsic value of warrant | $															$ 1,273,985
Weighted average remaining life															3 years 9 months 7 days
Stock options purchase								243,020										66,667
Exercise price of warrants | $ / shares																		$ 3
Offering Warrants 2016 [Member]
Common stock outstanding										128,017		128,017
Weighted average remaining life												3 years 5 months 5 days
Number of units sold | Unit												587,592
Other cash expenses related to private placement | $												$ 176,896
Common stock sale prise | $ / shares										$ 6		$ 6
Common stock exercise price per share | $ / shares										$ 8.25		$ 8.25
Estimated fair value | $										$ 58,759		$ 58,759
Stock sold										128,017		128,017
Stock sold for gross proceeds | $										$ 768,100		$ 768,100
Number of unit offering per share price | $ / shares												$ 0.40
Percentage of cash commission on gross proceeds												0.10
Additional warrant purchase												12,802
Warrant offering description												an expense allowance equal to 3% of the proceeds of the sale, and (ii) warrants to purchase a number of shares of common stock equal to 10% of the 2016 Offering Units sold at an exercise price of $0.55 per share.
Warrants outstanding										210,000		210,000
Exercise price of warrants | $ / shares										$ 8.25		$ 8.25
Expense allowance | $												$ 99,853
Placement Agent Unit Warrants [Member]
Common stock outstanding										45,334		45,334			45,334
Number of units sold, per unit | $ / shares												$ 0.40
Number of units sold | Unit												1,920,250
Additional warrant purchase												192,025
Warrant offering description												Company sold 1,920,250 2016 Offering Units, at a price of $0.40 per Unit, consisting of (i) one share of common stock and (ii) a warrant to purchase one share of common stock. Each 2016 Offering Warrant has an exercise price of $0.55 and is exercisable for five years from the date of issuance.
Exercise price of warrants | $ / shares										$ 9		$ 9			$ 9
Private Offering [Member]
Shares available for future grants															284,482
Number of additional units sold | Unit												1,000,000			290,000	189,136	66,667
Number of units sold, per unit | $ / shares		$ 9													$ 8.10	$ 8.10	$ 0.60
Number of units sold | Unit		226,671													17,778	13,333
Number of additional units sold, per unit | $ / shares												$ 0.60			$ 9	$ 9	$ 9
Number of units sold for gross proceeds | $		$ 2,040,040													$ 2,509,000	$ 1,652,000	$ 2,040,040
Placement Agent paid commissions and expenses | $															1,229,124	741,058	265,206
Other cash expenses related to private placement | $															81,312	142,507	$ 169,000
Derivative warrant liability | $															$ 1,198,564	$ 768,435
Common stock sold															5,000,000
Common stock sale prise | $ / shares															$ 0.60				$ 9
Common stock, value, Outstanding | $															$ 582,185
Common stock exercise price per share | $ / shares		$ 0.015
Description of warrant redeemable		Common stock has traded for twenty (20) consecutive trading days with a closing price of at least $22.50 per share with an average trading volume of 3,333 shares per day and (ii) the Company provides 20 trading days prior notice of the redemption and the closing price of the common stock is not less than $17.55 for more than any 3 days during such notice period and (iii) the underlying shares of common stock are registered.
Stock sold																			333,333
Stock sold for gross proceeds | $																			$ 3,000,000
Exercise price of warrants | $ / shares		$ 9
Four Director [Member]
Common stock exercise price per share | $ / shares							$ 12
Weighted average options granted | $ / shares							$ 6.58
Number of directors | Unit							4
Stock options purchase							13,333
LMB [Member]
Common Stock Shares Issued								1,942,456		1,942,456		1,942,456			1,942,456
Weighted average remaining life								10 years
Stock options granted								171,217
Common stock exercise price per share | $ / shares								$ 0.015
Stock options purchase								77,252
Fair value vested options | $								$ 461,808
Fair value unvested options | $								$ 461,808
Minimum [Member]
Common stock exercise price per share | $ / shares						$ 10.50
Minimum [Member] | Warrant [Member]
Exercise price of warrants | $ / shares								$ 6.15
Maximum [Member]
Common stock exercise price per share | $ / shares						$ 13.50
Maximum [Member] | Warrant [Member]
Exercise price of warrants | $ / shares								$ 20.70

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended	12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015
General and administrative expense	$ 1,383,771	$ 756,297	$ 2,515,954	$ 1,050,518	$ 183,044	$ 3,783,941	$ 946,613
Company owes to related party	$ 27,637		$ 27,637			$ 27,637	$ 70,386
Chairman [Member]
Additional stock purchased	333,333		333,333
Financial Consultant [Member]
General and administrative expense			$ 24,000	$ 24,000

EMPLOYMENT AND CONSULTING AGR41

EMPLOYMENT AND CONSULTING AGREEMENTS (Details Narrative) - USD ($)	1 Months Ended		9 Months Ended	12 Months Ended
	Mar. 30, 2016	Oct. 31, 2015	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Jun. 01, 2015
Consulting expense under the agreements			$ 29,000	$ 460,000	$ 348,000
Consulting expense			$ 4,000	$ 48,000	$ 48,000
Purchase of common stock for the grant of options							33,000
Stock Options [Member]
Stock options granted	6,035	26,667			6,667	220,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Commitments And Contingencies Details Narrative
Rent expenses			$ 13,002	$ 0	$ 0
Monthly rental rate			$ 2,167
Future minimum rental for fiscal year		$ 26,004
Future minimum rental due in two years	$ 2,167

INCOME TAXES (Details)

INCOME TAXES (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015
Income Taxes Details
Computed expected tax benefit	(35.00%)	(35.00%)	(35.00%)
State taxes, net of federal benefit	(5.20%)	(5.20%)	(5.20%)
Permanent differences		4.20%	(4.60%)
Tax reporting differences due to the reverse acquisition	11.30%
Increase in the valuation reserve	28.90%	36.00%	44.80%
Total difference	0.00%	0.00%	0.00%

INCOME TAXES (Details 1)

INCOME TAXES (Details 1) - USD ($)	Sep. 30, 2016	Sep. 30, 2015
Deferred tax assets:
Net operating loss carryforward	$ 3,801,000	$ 1,131,000
Stock-based compensation	703,000	384,000
Valuation allowance	(4,504,000)	(1,515,000)
Deferred tax assets

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Income Taxes Details Narrative
Increase in valuation allowance	$ 2,989,000	$ 1,299,000	$ 216,000
Net operating loss carry forward	$ 9,456,000
Expiration date	2,034

OPERATING LEASE (Details Narrat

OPERATING LEASE (Details Narrative)	6 Months Ended
	Mar. 31, 2017USD ($)
Operating Lease Details Narrative
Operating lease rent	$ 2,167
Lease agreement expire date	Oct. 31, 2017
Rent expense	$ 13,000

SUBSEQUENT EVENTS (Detail Narra

SUBSEQUENT EVENTS (Detail Narrative)

Apr. 07, 2017USD ($)Unit$ / shares

Nov. 23, 2016USD ($)shares

Oct. 31, 2016USD ($)Unit$ / shares

Mar. 31, 2017USD ($)

Jun. 30, 2017USD ($)

Apr. 30, 2017USD ($)

Dec. 31, 2017

May 12, 2017USD ($)

Dec. 15, 2016USD ($)

Dec. 14, 2016USD ($)

Dec. 09, 2016USD ($)

Oct. 20, 2016USD ($)

Sep. 30, 2016USD ($)

Promissory notes

$ 100,000

$ 500,000

$ 500,000

Accrued interest rate

1.00%

Aggregate principal amount

$ 250,000

Outstanding principal amount

$ 1,150,000

Proceeds from share of common stock and warrant,share | shares

65,000

Proceeds from share of common stock and warrant, amount

$ 390,000

$ 6,000,000

Purchase of common stock in exchange of warrant | shares

6,500

Over-subscription allotment

$ 2,000,000

Negotiated price per common share | $ / shares

$ 6

Exercise price per warrant | $ / shares

$ 8.25

Commission paid to placement agent

10.00%

Expense allowance

3.00%

Warrant to purchase number of common stock

10.00%

Principal amount

$ 2,500,000

Number of unit offering | Unit

1,000,000

Subsequent Event [Member]

Additional capital raise in process

$ 18,000,000

Subsequent Event [Member] | Demand Promissory Notes [Member]

Principal amount

$ 2,500,000

Maturity date

Jun. 30, 2018

Conversion price

equal to 75% of the price

Subsequent Event [Member] | Consultant [Member]

Demand notes

$ 650,000

Number of units purchase | Unit

38,000

Number of units purchase, per unit | $ / shares

$ 9

Exercise price of unit | $ / shares

$ 9

Subsequent Event [Member] | Executive Chairman [Member] | Bridge note [Member]

Principal amount

$ 1,500,000

Maximum borrowing capacity

$ 1,500,000

Maturity date

Dec. 31, 2017

Conversion price

equal to 75% of the price

Advances from related party

$ 240,000