Radiopharm Theranostics : Annual Report for Fiscal Year Ending June 30, 2025 (Form 20-F)

About this update from Radiopharm Theranostics Limited

Operating and Financial Review and Prospects Overview Radiopharm Theranostics Limited was incorporated under the laws of Australia in February 2021. We are a clinical-stage radiotherapeutics company that focuses on the development of radiopharmaceutical products for diagnostic and therapeutic uses in areas of high unmet medical need. We receive tax incentives from the Australian Government for research and development activities (R&D activities). Subject to certain exclusions, the Australian Government tax incentive scheme provides benefits for eligible R&D activities. Under the Australian R&D tax incentive scheme, entities are entitled to either (i) a 43.5% refundable tax offset for eligible companies with an aggregated turnover of less than A$20.0 million per annum or (ii) a non-refundable 38.5% tax offset for all other entities with an aggregate turnover of A$20.0 million or more or controlled by any exempt entity (exempt entity is, entity which is exempted from income tax). Our aggregated turnover is less than A$20.0 million, so we anticipate being entitled to a claim of 43.5% refundable tax offset for costs relating to eligible R&D activities for our most recently completed fiscal year and our current fiscal year. We have incurred net losses since inception and expect to incur substantial and increasing losses for the next several years as we expand our research and development activities and move our drug candidate into later stages of development. The process of carrying out the development of our drug candidates to later stages of development may require significant additional research and development expenditures, including pre-clinical testing and clinical trials, as well as for obtaining regulatory approval. To date, we have funded our operations primarily through the sale of equity securities, proceeds from the exercise of options and interest income. A. Operating Results Results of Operations Comparison of fiscal year ended June 30, 2025 to June 30, 2024 The following table summarizes our results from operations for the years ended June 30, 2025 and 2024, together with the changes in those items in dollars set forth our results of operations in Australian dollars for the fiscal years ended June 30, 2025 and June 30, 2024. Fiscal year ended June 30 2025 2024 $ Change A$ A$ Revenue from contracts with customers 3,633,422 299,228 3,334,194 Cost of sales (3,594,146 ) - (3,594,146 ) Other income 10,256,740 1,343,062 8,913,678 Other losses (351,646 ) (1,226,108 ) 874,462 Loss on movement in contingent consideration (4,069,680 ) (8,860,358 ) 4,790,678 General and administrative expenses (14,638,013 ) (13,039,246 ) (1,598,767 ) Research and development (27,515,194 ) (23,086,267 ) (4,428,927 ) Share-based payments (1,895,348 ) (2,640,178 ) 744,830 Finance expenses (65,300 ) (642,888 ) 577,588 Income tax expense (103,292 ) (96,364 ) (6,928 ) Exchange differences on translation of foreign operations 464,034 202,956 261,078 Total comprehensive loss (37,878,423 ) (47,746,163 ) 9,867,740 Loss per share for loss attributable to the ordinary equity holders of the group: Cents Cents $ Change Basic and diluted loss per share (1.76 ) (12.41 ) (10.65 ) Revenue from contracts with customers Revenue from contracts with customers increased from A$299,228 in fiscal 2024 to A$3,633,422 in fiscal 2025 due to an increase in revenue received from Lantheus with respect to the DUNP19 trial Radiopharm is conducting on behalf of Lantheus. Revenue recognized from Lantheus was based on reimbursement for costs associated with the trials and milestones achieved throughout the trial. Cost of sales Cost of sales increased from nil in fiscal 2024 to $3,594,146 in fiscal 2025 due to an increase is the costs associated with respect to the DUNP19 trial Radiopharm is conducting on behalf of Lantheus. Other income Other income increased from A$1,343,062 in fiscal 2024 to A$10,256,740 in fiscal 2025 as overseas expenditure from fiscal 2024 for the R&D tax incentives received from the Australian government was also recognized in the current year. With respect to a clinical trial expense incurred outside Australia, an "overseas finding" under applicable Australian tax laws must be obtained from AusIndustry prior to such expense being eligible under for R&D tax incentives. Management has assessed the clinical trial activities and expenses to determine which activities are likely to be eligible under the R&D tax incentive regulations. Amounts are recognized as R&D tax incentives received when it has been established that the conditions of the recognition of the R&D tax incentive have been met and that the expected amount can be reliably measured. See note 3(a) of our audited financial statements for fiscal 2025 for further information. Other losses Other losses decreased from A$1,226,108 in fiscal 2024 to A$351,646 in fiscal 2025, as the previous year included losses on the sale of the TROP-2 and DUNP19 assets to Lantheus. Loss on movement in contingent consideration The loss on movement in contingent consideration relating to the acquisition of licenses is derived from the reassessment of expected timing of milestone achievement and the probability of achieving milestones under amortized cost. Loss on movement in contingent consideration decreased from A$8,860,358 in fiscal 2024 to A$4,069,680 in fiscal 2025, representing the progression of our research and development in fiscal 2025, which increased the likelihood of achieving the milestones as detailed in Note 13 to our financial statements for fiscal 2025. General and administrative expenses General and administrative expenses increased from A$13,039,246 fiscal 2024 to A$14,638,013 in fiscal 2025, due to an increase in employee benefits expenses (from A$9,448,779 to A$10,120,149), other general and administrative expenses (from A$968,749 to A$986,673), accounting and audit expenses (from A$845,818 to A$957,895), travel and entertainment expenses (from A$427,676 to A$808,546), legal expenses (from A$164,754 to A$656,036), consulting expenses (from A$95,179 to A$286,138), and patent costs (from A$204,163 to A$205,017), partially offset by decreases in investor relations expenses (from A$323,588 to A$313,671), listing and share registry expenses (from A$193,797 to A$190,795), insurance expenses (from A$359,209 to A$105,762) and depreciation (from A$7,534 to A$7,331). The primary expense in fiscal 2025 was employee benefits, which were A$10,120,149 (or 69% of total general and administrative expenses) as a result of the increase in the number of full-time employees. Research and development expenses Research and development expenses increased from A$23,086,267 in fiscal 2024 to A$27,515,194 in fiscal 2025, due to an increase in expenses regarding NanoMab (from A$6,501,174 to A$7,185,000), R&D Venture (from A$3,931,541 to A$5,989,964), Pivalate - Imperial (from A$3,962,355 to A$5,184,136), huPSA Anti-body (Diaprost) (from A$298,312 to A$2,925,445), AVB6 Integrin (from A$993,645 to A$1,876,983), consulting fees for research and development (from A$929,229 to A$930,292) and other research and development expenses (from A$89,450 to A$171,605), partially offset by decreases in expenses regarding amortization (from A$3,118,752 to A$2,588,306), impairment (from A$1,478,892 to A$0), NeoIndicate (from A$529,424 to A$437,400), and UCLA collaboration expense (from A$1,253,493 to A$226,063). Share based payments Share-based payments expense decreased from A$2,640,178 in fiscal 2024 to A$1,895,348 in fiscal 2025, due to a decrease in the expense recorded for options issued in the current fiscal. Finance expenses Finance expenses decreased from a loss of A$642,888 in fiscal 2024 to A$65,300 in fiscal 2025, as the financing agreement with Lind Global was terminated at the start of the fiscal year. Income tax expense Income tax expense increased from A$96,364 in fiscal 2024 to A$103,292 in fiscal 2025, due to the recognition of tax payable in Radiopharm (USA) Inc. Exchange differences on translation of foreign operations Exchange differences on translation of foreign operations increased from A$202,956 in fiscal 2024 to A$464,034 in fiscal 2025, due to the fluctuation in foreign exchange rates. Total comprehensive loss Total comprehensive loss decreased A$9.9 million from A$47.7 million in fiscal 2024 to A$37.9 million in fiscal 2025, principally due to the recognition of A$3.6 million in R&D tax incentives for the fiscal 2024, and a decrease in the loss on movement in contingent consideration of A$4.8 million for the year. Comparison of Our Results for the Year ended June 30, 2024 with the Year ended June 30, 2023 For results of operations for the years ended June 30, 2024 and 2023, together with the changes in those items in dollars and as a percentage and the related discussions on these results, refer to Results of Operations within "Item 5.A Operating Results" in our Annual Report on Form 20-F/A (Amendment No.2) for the year ended June 30, 2024, filed with the SEC on December 5, 2024. Off-Balance Sheet Arrangements During fiscal years 2025 and 2024, we did not have any unconsolidated entities such as structured finance or special purpose entities that can be used to facilitate off-balance sheet arrangements. Tabular Disclosure of Contractual Obligations As of June 30, 2025, our contractual obligations were as set forth below: Payments Due by Period A$ Total Less than 6 months Between 6 - 12 months Between 1 - 2 years Between 2 - 5 years More than 5 years Trade and other payables 9,340,993 9,340,993 - - - - Other financial liabilities 32,098,324 1,363,259 2,363,259 8,039,178 11,585,395 9,052,414 Contingent liabilities We had significant contingent liabilities outstanding as of June 30, 2025, that related to the potential milestone payments under several license agreements. For details, please see Note 13 to our financial statements for fiscal year 2025. Capital commitments We did not have any material capital expenditure commitments as of June 30, 2025. B . Liquidity and Capital Resources Since our inception, our operations have mainly been financed through the issuance of equity securities. Additional funding has come through interest earned from cash in interest earning accounts. Capital Requirements As of June 30, 2025, we had cash and cash equivalents of A$29,116,835. We anticipate that our current cash will be sufficient to fund our operations through fiscal 2026. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially depending on capital raising and expense management. We anticipate that we will require substantial additional funds in order to achieve our long-term goals and complete the research and development of our current drug candidates. We do not expect to generate significant revenue until we obtain regulatory approval to market and sell our drug candidate and sales of our drug candidate have commenced. We therefore expect to continue to incur substantial losses in the near future. We could incur liabilities that are contingent upon future events as set forth in various license agreements under which we have licensed technology. Such contingent liabilities include development milestone payments and royalties on net sales. It is uncertain whether milestones will be met due to factors beyond our control and we will not owe any royalties until we earn income from the relevant licensed technology. For further information on our contingent liabilities, please see Note 13 to our fiscal 2025 audited financial statements in this Annual Report. Our future capital requirements are difficult to forecast and will depend on many factors, including: ● the scope, results and timing of preclinical studies and clinical trials; ● the amount and timing of milestone payments under license agreements; ● the costs and timing of regulatory approvals; and ● the costs of establishing sales, marketing and distribution capabilities. Cash Flows Comparison of cash flows for the fiscal year ended June 30, 2025, with June 30, 2024 The following table summarizes our cash flows for the periods presented: Year ended June 30, 2025 2024 A$ A$ Net cash used in operating activities (36,645,477 ) (22,975,935 ) Net cash used in investing activities 1,770,598 (320,000 ) Net cash provided by financing activities 45,431,548 30,196,945 Operating Activities Net cash used in operating activities increased from A$22,975,935 in fiscal 2024 to A$36,645,477 in fiscal 2025, due to an increase in the payments to suppliers and employees in connection with our clinical trial activities (from A$28,138,720 to A$42,799,759), and a decrease from cash received from research and development tax incentives (from A$4,851,839 to nil), partially offset by an increase in cash receipts from customers (from A$260,462 to A$5,353,973), an increase in cash received from interest income (from A$50,484 to A$800,309) Investing Activities Net cash used in investing activities increased from a payment of A$320,000 in fiscal 2024 to proceeds of A$1,770,598 in fiscal 2025, due to an increase in cash received from payments for intellectual property (from nil to A$2,997,592) and an increase of payments for license fee liabilities (A$320,000 to A$1,226,994). Financing Activities Net cash received from financing activities increased from A$30,196,945 in fiscal 2024 to A$45,431,548 in fiscal 2025, due to an increase in the proceeds received from the issuance of equity securities (from A$29,645,526 to A$53,977,902), partially offset by an increase in the transaction costs related to share issuances (from A$1,533,771 to A$4,738,000), an increase in the costs related to loans and borrowings (from A$117,000 to A$218,633), an decrease in repayment of borrowings (from A$5,167,000 to A$1,900,000 and a decrease in the proceeds received from borrowings (from A$7,369,190 to nil)). Comparison of cash flows for the fiscal year ended June 30, 2024, with June 30, 2023 The following table summarizes our cash flows for the periods presented: Year ended June 30, 2024 2023 A$ A$ Net cash used in operating activities (22,975,935 ) (23,201,798 ) Net cash used in investing activities (320,000 ) (1,530,681 ) Net cash provided by financing activities 30,196,945 9,217,791 Operating Activities Net cash used in operating activities decreased from A$23,201,798 in fiscal 2023 to A$22,975,935 in fiscal 2024, due to an increase in cash received from research and development tax incentives (from A$1,555,196 to A$4,851,839), partially offset by a decrease in cash received from interest income (from A$145,035 to A$50,484) and an increase in the payments to suppliers and employees in connection with our clinical trial activities (from A$25,194,388 to A$28,138,720) and a decrease in receipts from customers (from A$292,359 to A$260,462). Investing Activities Net cash used in investing activities decreased from A$1,530,681 in fiscal 2023 to A$320,000 in fiscal 2024, due to a decrease in payments for equipment and intellectual property(from A$1,485,375 to nil) and payments for property, plant and equipment (from A$45,306 to nil), partially offset buy payments for license fees (nil to A$320,000) Financing Activities Net cash provided by financing activities increased from A$9,217,791 in fiscal 2023 to A$30,196,945 in fiscal 2024, due to an increase in the proceeds received from the issuance of equity securities (from A$10,072,555 to A$29,645,526) and an increase in the proceeds received from borrowings (from nil to A$7,369,190), partially offset by an increase in the transaction costs related to share issuances (from A$854,764 to A$1,533,771), an increase in the costs related to loans and borrowings (from nil to A$117,000), and an increase in repayment of borrowings (from nil to A$5,167,000). C. Research and Development, Patents and Licenses For a description of our research and development programs and activities, see "Item 4. Information on the Company-B. Business Overview". For a description of the amount spent during each of the last three fiscal years on company-sponsored research and development activities, as well as the components of our research and development expenses, see note 3(c) to our financial statements for fiscal 2025, 2024 and 2023. D. Trend Information One of our primary expenditures involves research and development costs. Increases or decreases in research and development expenditure are attributable to the level of clinical trial activity and the amount of expenditure on those trials. E. Critical Accounting Estimates The preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, which management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. See note 9 to our financial statements for fiscal 2025 for the judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

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