Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The information and financial data discussed below is derived from the audited consolidated financial statements of Actinium Pharmaceuticals, Inc. for its fiscal years ended December 31, 2025 and 2024. The consolidated financial statements of Actinium Pharmaceuticals, Inc. were prepared and presented in accordance with generally accepted accounting principles in the United States. The information and financial data discussed below is only a summary and should be read in conjunction with the historical financial statements and related notes of Actinium Pharmaceuticals, Inc. contained elsewhere in this Report. The financial statements contained elsewhere in this Report fully represent Actinium Pharmaceuticals, Inc.'s financial condition and operations; however, they are not indicative of the Company's future performance. See "Cautionary Note Regarding Forward-Looking Statements" above for a discussion of forward-looking statements and the significance of such statements in the context of this Report. See also "Risk Factors" in Part I, Item 1A of this Report for a discussion of risks and uncertainties that could impact Actinium Pharmaceuticals, Inc.'s future financial condition, operations and performance.

Actinium Pharmaceuticals, Inc. ("Actinium", the "Company", or "we") is a pioneer in the development of targeted radiotherapies intended to meaningfully improve outcomes for patients with relapsed or refractory cancer who have failed existing therapies. We operate as a single operating segment focused on research, discovery, and clinical development of targeted radiotherapies.

Results of Operations - Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

The following table sets forth, for the periods indicated, data derived from our statements of operations:

		For the years ended December 31,								Increase
(amounts in thousands)		2025				2024				(Decrease)
Revenue:
Revenue		$	-			$	-			$	-
Other revenue			90				-				90
Total revenue			90				-				90
Operating expenses:
Research and development, net of reimbursements			21,124				30,045				(8,921	)
General and administrative			15,213				12,076				3,137
Total operating expenses			36,337				42,121				(5,784	)
Other income:
Interest income - net			2,360				3,878				(1,518	)
Total other income			2,360				3,878				(1,518	)
Net loss		$	(33,887	)		$	(38,243	)		$	(4,356	)

Revenues

We recorded no commercial revenues for the years ended December 31, 2025 and 2024, respectively.

Other revenue

The National Institutes of Health awarded us a Small Business Technology Transfer cost reimbursable grant to support a clinical collaboration with Memorial Sloan Kettering Cancer Center, or MSK, to study Iomab-ACT, our CD45-targeting Antibody Radio-Conjugate, for targeted conditioning to achieve lymphodepletion prior to administration of a CD19-targeted CAR T-cell therapy developed at MSK. We recognized other revenue during the year ended December 31, 2025 of $0.1 million from this grant.

On April 7, 2022, we entered into a License Agreement with Immedica, (the License Agreement), pursuant to which Immedica licensed the exclusive product rights for commercialization of Iomab-B in certain countries in the EUMENA region. Upon signing, we were entitled to an upfront, non-refundable payment of $35.0 million from Immedica, which was received in May 2022. Under the terms of the License Agreement, we are eligible to receive certain regulatory and commercial milestone payments and royalties on net sales of the product in certain countries that may result from the License Agreement. We continue to retain commercialization rights in the U.S. and rest of the world.

Our contract liabilities are recorded within Other revenue deferred - current liability or Long-term license revenue deferred in our condensed consolidated balance sheets depending on the short-term or long-term nature of the payments to be recognized. Our contract liabilities primarily consist of advanced payments from licensees. Long-term license revenue deferred was $35.0 million at December 31, 2025 and December 31, 2024, resulting from the receipt from Immedica; this deferred revenue will be recognized upon the European Union's regulatory approval of Iomab-B or provision of definitive feedback that Iomab-B will not receive approval in the European Union.

Stock Option Compensation Expense

On March 31, 2025, our Board of Directors approved the cancellation of certain stock options to purchase an aggregate of 4.9 million shares of common stock held by certain current employees and directors that were initially granted under our Amended and Restated 2013 Stock Plan and 2019 Stock Plan. Such cancellations were subject to the consent of the applicable holders of the stock options.

The cancellation of stock options on March 31, 2025, described above, resulted in a significant increase in non-cash stock-based compensation for the year ended December 31, 2025 compared to its prior-year period due to recognition of previously unrecognized stock-based compensation cost at the cancellation. During the years ended December 31, 2025 and December 31, 2024, total non-cash stock-based compensation expense, including stock option compensation expense, was $9.2 million and $5.3 million, respectively. No stock options or restricted stock units were granted during 2025 to existing employees or Board members.

Research and Development Expenses, net of reimbursements

Research and development expenses decreased by $8.9 million to $21.1 million for the year ended December 31, 2025, compared to $30.0 million for the year ended December 31, 2024. The decrease was primarily driven by a decline in outside CRO services and other preclinical R&D expenses of $5.5 million and lower compensation of $4.3 million due to lower headcount. In the second quarter of 2025, we conducted a workforce optimization that reduced our headcount by approximately fourteen percent and announced a strategic pipeline prioritization. These decreases were partially offset by higher non-cash stock-based compensation of $1.0 million, resulting from the cancellation of stock options described above.

General and Administrative Expenses

General and administrative expenses increased by $3.1 million to $15.2 million for the year ended December 31, 2025, compared to $12.1 million for the year ended December 31, 2024. Higher non-cash compensation expense of $2.9 million resulting from the cancellation of stock options described above and higher consulting fees and legal fees of $0.7 million were partially offset by lower compensation expense of $0.5 million, due to lower headcount.

Other Income

Other income is comprised of net interest income in both reporting periods. Other income for the year ended December 31, 2025 was $2.4 million, a decrease of $1.5 million from $3.9 million for the year ended December 31, 2024, primarily due to a lower average cash balance during 2025 compared to the prior year.

Net Loss

Net loss decreased by $4.4 million to $33.9 million for the year ended December 31, 2025, compared to $38.2 million for the year ended December 31, 2024, primarily due to lower research and development expenses of $8.9 million for the year ended December 31, 2025. This decrease was partially offset by higher general and administrative expenses of $3.1 million, attributable to higher non-cash stock-based compensation expense of $2.9 million resulting from the cancellation of stock options described above, along with lower other income.

Liquidity and Capital Resources

Historically, we have financed our operations primarily through sales of our common stock and common stock equivalents. The following tables sets forth selected cash flow information for the periods indicated:

		For the years ended December 31,
(amounts in thousands)		2025				2024
Cash used in operating activities		$	(24,580	)		$	(33,072	)
Cash used in investing activities			(104	)			(11	)
Cash used in/provided by financing activities			(217	)			29,321
Effect of foreign currency rates on cash			6				-
Net change in cash, cash equivalents and restricted cash		$	(24,895	)		$	(3,762	)

Net cash used in operating activities for the year ended December 31, 2025 was $24.6 million, representing a decrease of $8.5 million compared to $33.1 million in the prior-year period. This reduction was primarily driven by lower cash compensation of $4.8 million due to reduced headcount and a $5.5 million decline in outside CRO services and other preclinical R&D expenses, partially offset by lower interest income of $1.5 million and a $1.0 million decrease in net operating assets.

Net cash used in investing activities was $104 thousand for the year ended December 31, 2025 as we began construction to create modular removable manufacturing space, with an estimated cost of $1.4 million to be incurred in 2026. For the year ended December 31, 2024, net cash used in investing activities was $11 thousand for the purchase of equipment for our laboratory space.

Net cash used in financing activities was $217 thousand for the year ended December 31, 2025 related to restricted stock units withheld to cover tax withholding obligations. Net cash provided by financing activities of $29.3 million in 2024 was primarily from the sale of shares of common stock.

In August 2020, we entered into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC, or JonesTrading, pursuant to which we are able to sell, from time to time, through or to JonesTrading, up to an aggregate of $200 million of our common stock. On June 28, 2022, we entered into an Amendment and Restated Capital on Demand™ Sales Agreement, or the Amended Sales Agreement, with JonesTrading and B. Riley Securities, Inc. ("B. Riley"). The Amended Sales Agreement modifies the original Capital on Demand™ Sales Agreement to include B. Riley as an additional sales agent thereunder. Shares of common stock were offered pursuant to a shelf registration statement on Form S-3 (File No. 333-242322) filed with the SEC on August 7, 2020 (the "Prior Shelf Registration Statement"). On August 11, 2023, we filed a registration statement on Form S-3 (File No. 333-273911), and amended on February 2, 2024, which was declared effective on February 5, 2024, to replace the Prior Shelf Registration Statement, including a base prospectus which covers the offering, issuance and sale of up to $500 million of common stock, preferred stock, warrants, units and/or subscription rights; and a sales agreement prospectus covering the offering, issuance and sale of up to a maximum aggregate offering price of $200 million of common stock that may be issued and sold under the Amended Sales Agreement. There was no sale of shares of common stock during the year ended December 31, 2025, pursuant to the Amended Sales Agreement. For the year ended December 31, 2024, we sold 3.5 million shares of common stock, resulting in gross proceeds of $29.9 million and net proceeds of $29.3 million under the Amended Sales Agreement.

We entered into a lease for corporate office space effective June 1, 2022. The lease has a term of five years and two months, with an expiration date in 2027, and current annual rent of $0.6 million. We are also responsible for certain other costs, such as insurance, utilities and maintenance. We issued a letter of credit in connection with the lease and as of December 31, 2025 maintain a $0.3 million certified deposit as collateral for the letter of credit.

We entered into a lease for manufacturing space effective December 1, 2025. The lease has a term of five years and one month, with an expiration date in 2030, and current annual rent of $0.2 million. We are also responsible for certain other costs, such as insurance, utilities and maintenance.

We will require additional funds to conduct clinical and non-clinical trials, achieve regulatory approvals, and, subject to such approvals, commercially launch our product candidates, and will need to secure additional financing in the future to support our operations. As of the date of filing this report, we expect that our existing resources will be more than sufficient to fund our planned operations for more than 12 months following the date of this report. We base this belief on assumptions that are subject to change, and we may be required to use our available cash and cash equivalent resources sooner than we currently expect. In the long-term, we intend to continue to fund our operations through the sales of our common stock and common stock equivalents, noting our actual future capital requirements will depend on many factors, including the progress and results of our ongoing clinical trials, the duration and cost of discovery and preclinical development, laboratory testing and clinical trials for our pipeline candidates, the timing and outcome of regulatory review of our product candidates, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the number and development requirements of other pipeline candidates that we pursue, and the costs of commercialization activities, including product marketing, sales, and distribution.

We expect to continue to operate at a net loss as we continue our research and development efforts, continue to conduct clinical trials and develop manufacturing, sales, marketing and distribution capabilities. There can be no assurance that the products under development by us will be approved for sale in the United States or elsewhere. Our ability to obtain additional capital may depend on prevailing economic conditions and financial, business, and other factors beyond our control. Current economic conditions have been, and continue to be, volatile. Continued instability in these market conditions may limit our ability to access the capital necessary to fund and grow our business.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Estimates

Our management's discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ materially from these estimates under different assumptions or conditions. The Company does not have any critical accounting estimates that are likely to have a material impact on our financial condition or results of operation.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide improvements primarily related to the rate reconciliation and income taxes paid information included in income tax disclosures. We are required to disclose additional information regarding reconciling items equal to or greater than five percent of the amount computed by multiplying pretax income (loss) by the applicable statutory tax rate. Similarly, we are required to disclose income taxes paid (net of refunds received) equal to or greater than five percent of total income taxes paid (net of refunds received). The amendments in ASU 2023-09 were effective January 1, 2025 to be applied on a prospective basis, with retrospective application permitted. We adopted ASU 2023-09 on a retrospective basis and it did not have a material impact on our consolidated financial statements.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have evaluated the impact of the OBBBA and determined that it does not have a material impact on our consolidated financial position and results of operations.

Recently Issued Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which excludes from derivative accounting non-exchange-traded contracts with underlying terms that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer's own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging-Contracts in Entity's Own Equity, and (4) call options and put options on debt instruments. We can apply the amendments in AUS 2025-07 either (1) prospectively to new contracts entered into on or after the date of adoption or (2) on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption. The amendments in ASU 2025-07 are effective January 1, 2027, for annual reporting periods, including interim periods within annual reporting periods. Early adoption is permitted. We are evaluating the impact of ASU 2025-07 on our financial statements.

In May 2025, FASB issued ASU 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, which revises the Master Glossary definition of the term "performance condition" for share-based consideration payable to a customer to include conditions, such as vesting conditions, that are based on the volume or monetary amount of a customer's purchases or potential purchases of goods or services from the grantor, including over a specified period of time. The revised definition also incorporates performance targets based on purchases made by other parties that purchase the grantor's goods or services from the grantor's customers. The revised definition of the term performance condition cannot be applied by analogy to awards granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor's own operations. ASU 2025-04 eliminates the policy election permitting a grantor to account for forfeitures as they occur for share-based awards granted to a customer. Separate policy elections for forfeitures remain available for share-based payment awards with service conditions granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor's own operations. ASU 2025-04 further clarifies that a grantor should not apply the guidance in Topic 606 on constraining estimates of variable consideration to share-based consideration payable to a customer. ASU 2025-04 permits a grantor to apply the new guidance on either a modified retrospective or a retrospective basis. The amendments in ASU 2025-04 are effective January 1, 2027, for annual reporting periods, including interim periods within annual reporting periods. We are evaluating the impact of ASU 2025-04 on our financial statements.

In November 2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disaggregation of expenses within the consolidated statement of operations. The amendments in ASU 2024-03 require disclosures in the notes to the consolidated financial statements and specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity disclose (a) employee compensation, (b) depreciation, and (c) intangible asset amortization included in each relevant expense caption; include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements; and disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The amendments in ASU 2024-03 are effective January 1, 2027 and effective for interim periods beginning January 1, 2028, either on a prospective or retrospective basis. We are evaluating the impact of ASU 2024-03 on our financial statements.

Known Trends, Events and Uncertainties

The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. In addition, the consequences of the ongoing geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine and the ongoing conflicts in the Middle East, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. In the past, U.S. federal government shutdowns, such as the shutdown that began on October 1, 2025 and ended on November 12, 2025, have curtailed operations of key agencies such as the FDA and the NIH, which includes the NCI. Future shutdowns may result in delays or disrupt our ability to advance clinical development of the current and planned clinical trials under our CRADA, obtain regulatory interactions/approvals, or secure government-funded grants. Additionally, changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariffs, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. For a further discussion of factors that may affect future operating results see the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statement Notice."

Other than as discussed above and elsewhere in this report, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.

Subsequent Event

In February 2026, the Chief Financial Officer of our Company tendered his resignation. To fill this executive vacancy, our Board appointed Sandesh Seth, the current Chairman and Chief Executive Officer of the Company, to serve as our Principal Financial Officer.