H1 FY26 accounts for Recce were released after hours on Friday and like most biotechs at it’s current stage there is only one figure in it that matters and that was already released with the 4C at the end of January. As I noted at the time and is mentioned in the “Events Subsequent to Reporting Period” on p2 of the directors report for the accounts, the 31 December 2025 finishing cash position of A$365k needs to be viewed in context with the A$5.3m R&D tax rebated received on 14 January 2026.
Also Note 4: Going concern – is dependent on ability to secure additional funding, which it has done for a long time now and continues to expect to. Cash spending is mostly discretionary and the R&D rebates can be borrowed against, so I the solvency risk is low (as distinct from clinical risk) but we will probably see a capital raise at some point this year so they can accelerate development which is probably why the share price continues to go sideways despite clinical and commercial progress.
Disc: I own RL+SM
CRADA with USAISR (2/2/26)
Recce has announced an expansion of it’s work with the DoD (now Dept of War…), having previously received a US$2.2m grant (Announced 8Apr24 and further details on 15Jul24). The Cooperative Research and Development Agreement (CRADA) is with the United States Army Institute of Surgical Research (USAISR) and will see R327G validation testing using the USAISR’s Walker-Mason rat model of burn wound infections.
The direction seems to be to develop R327G into an amorphous gel wound dressing that would be available in military field kits and for use in clinical and post-operative care. Details are scant with no timelines and no funding is mentioned.
Given most of the work being done with the DoD/DoW is classified, we are unlikely to get much of a clue until cheques start being written. The work was discussed at the AGM, but in the context that they couldn’t provide any details, but provided a positive impression of both the effectiveness of R327G and the scope of the conditions it was being tested in.
A positive announcement that will likely help the price near term, also supportive of the investment thesis in that things seem to be on track.
Disc: I own RL+SM
4C Q2 FY26 (30/1/26)
I feel like RCE needed to borrow from the cover of the Hitchhikers Guide to the Galaxy and have the words “Don’t Panic” in large, friendly letters at the start before investors raced to the cash balance (only $425k). The subsequent receipt of A$5.4m and another $3.5m expected later this quarter in R&D grants was buried on page 4 and tells investors more about the current cash position of the business than the 4C, and the reason not to panic.
The operational update for the quarter mostly repeated announcements I have already covered:
Also, the awarding of a Hong Kong patent for Recce Anti-infectives (to 2041) that I didn’t bother writing about and the sad passing of Dr Graham Melrose the inventor of the technology platform, vale Dr Melrose.
The funds available are being focused on the Phase 3 clinical trial in Indonesia for R327 Topical Gel (R327G) and U.S. Department of Defense Burn Wound Program. “With these initiatives advancing in parallel, Recce is actively pursuing regulatory, partnering, and potential market entry opportunities aimed at unlocking near‑term shareholder value.”
Which has been the plan for quite a while now, so no new information but it must be recognised that solid progress and milestones were reached last quarter. I wouldn’t hold your breath but it’s starting to look more like a case of when not if they commercialise or get a buyout offer.
Disc: I own RL+SM
A$5.3m R&D Rebate Received (14/1/26)
Today RCE announced it has received A$5,339,202 in R&D rebates from the Australian Government relating to FY25 and has submitted and expects to receive an additional A$3.0m from further lodgments. I agree it’s market sensitive as marked given they only had A$3.2m cash at the end of the September quarter.
The 4C is due at the end of the month, so we will see how they are traveling for cash, but as of the July 4C they had A$39.6m in funding available:
The A$10.5m cash at the end of the quarter was welcome, but the cash runway is dominated by the additional ~A$19m available in the debt facility and ~A$8.5m in R&D rebates expected in November to give a cash runway of ~A$39.6m is a great place to be in, but old news. [31/7/25]
So this A$5.3m plus the additional A$3.0m is the ~A$8.5m in R&D rebates flagged. Later than anticipated and slightly smaller. They will have burnt most of that A$10.5m cash on hand, so we are looking at around ~A$27.3m (19+8.3) of financing and cash currently available going forward.
Excluding R&D they are burning around A$2m a quarter so they should have around A$20m available for R&D over the next year. A strong runway given R&D spend will mostly be eligible for the 43.5% rebate and make up most of the spending over the next year.
James Graham (CEO) has a pathological (and financial) objection to capital raising, so I expect they will run cash as tight as possible and only do a relatively small cap raise if/when needed.
Disc: I own RL+SM