Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) has strengthened its balance sheet with the receipt of a A$3.67 million income tax refund from the Australian Taxation Office (ATO), adding further non-dilutive funding as the company advances its synthetic anti-infective pipeline toward key Phase 3 clinical milestones.
The refund relates to the financial year ended June 30, 2025, and comprises A$3.57 million in overseas research and development expenditure, plus A$95,826 in interest paid by the ATO.
The receipt lifts Recce’s pro-forma cash position to about A$33.1 million, up from the previously stated A$29.5 million, leaving the company well placed to progress upcoming clinical, regulatory and commercial licensing activities.
Cash boost follows A$4 million placement
The tax refund complements Recce’s recently completed A$4 million placement to institutional, sophisticated and professional investors.
The placement was priced at A$0.40 per share and involved the issue of 10 million new fully paid ordinary shares.
Recce is also preparing to open a share purchase plan (SPP) to eligible shareholders on July 6, 2026, allowing participants to subscribe for up to A$30,000 worth of new shares on the same terms as the placement.
The SPP is targeting up to a further A$4 million before costs, potentially taking total proceeds from the equity raising to A$8 million.
Funding directed to licensing and clinical trials
Funds from the placement and SPP will support commercial licensing activity, clinical trials and regulatory-enabling work across Recce’s anti-infective pipeline.
The company has allocated A$3.2 million toward strengthening its position for commercial licensing discussions with a leading Middle Eastern pharmaceutical company, including workstreams designed to support a potential commercial agreement.
A further A$2 million has been set aside for clinical trials targeting areas of significant unmet medical need, including Recce’s Phase 3 diabetic foot infections (DFI) registrational topical clinical trial in Indonesia and a Phase 3 DFI registrational topical clinical trial in Australia for the US Food and Drug Administration.
Funding will also support continuation of the US Department of War Burn Wound Program.
Another A$2 million is allocated to activities enabling Investigational New Drug applications to the FDA and Indonesia’s BPOM, while A$800,000 will be used for general working capital and offer costs.
Further R&D rebate expected
Recce expects to receive further non-dilutive funding, including an R&D Tax Incentive rebate from the ATO for the financial year ending June 30, 2026, of about A$7.5 million.
This anticipated rebate, together with current cash reserves and capital raising proceeds, is expected to support the company as it moves toward interim clinical data readouts and broader commercialisation opportunities.
Recce CEO James Graham said the capital raising came at an important stage for the company.
“The capital raising comes at an exciting time for the Recce business, having recently signed a non-binding term sheet with a leading Middle Eastern Pharmaceuticals Company and ahead of interim data readouts in Indonesia which is a positive step towards the potential commercialisation of R327G,” Graham said.