Citius Pharmaceuticals, Inc. Debt Disclosure
5. NOTE PAYABLE AND ADVANCE FROM EMPLOYEE
On June 2, 2025, The Company borrowed $1,000,000 from an unrelated lender. The note payable is due in full on December 2, 2025 with interest at 15% compounded monthly. Leonard Mazur (Chairman and Chief Executive Officer of the Company) personally guaranteed repayment of the note. Interest expense for the year ended September 30, 2025 was $49,750.
On May 28, 2025, an employee provided a $300,000 non-interest-bearing advance to the Company. On June 5, 2025, the Company repaid the employee in full.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.