Regencell Bioscience(US:RGC)2025-10-31 20:16IPO and Financial Overview - The company completed its initial public offering (IPO) on July 20, 2021, raising approximately $21.85 million from the sale of 87,400,000 shares at $0.25 per share, with net proceeds totaling around $22.67 million after expenses[183]. - Research and development costs for the TCM formula were only $0.95 million and $1.07 million for the years ended June 30, 2025, and 2024, respectively, compared to nearly $4 billion for a new medicine[230]. - As of June 30, 2025, the Group has no significant foreign currency risk due to most transactions being denominated in Hong Kong dollar or United States dollar[628]. - The Group limits its exposure to credit risk by transacting with broker-dealers, banks, and regulated exchanges with high credit ratings[629]. - The Company's strategy to minimize liquidity risk includes monitoring liquid capital and maintaining adequate cash and bank balances[630]. - Interest rate risk is considered minimal as cash held with banks is short-term with terms less than one month[631]. - Inflation has not had a material impact on the Group's results of operations in recent years[632]. ADHD and ASD Prevalence - The global prevalence of ADHD is estimated at 7.6% among children aged 3-12 and 5.6% among adolescents aged 12-18, translating to approximately 157 million affected individuals worldwide[188]. - The World Health Organization estimates that approximately 20 million to 23 million children are affected by Autism Spectrum Disorder (ASD), with an estimated 61.8 million individuals on the autism spectrum globally[190]. TCM Formula Development and Trials - The company has standardized a TCM formula targeting ADHD and ASD patients and initiated a second efficacy trial in August 2021[200]. - The first research study showed that patients treated with the personalized TCM formula experienced improvements in speech, communication, and behavioral abilities within three months[199]. - A second efficacy trial involved 28 patients diagnosed with ADHD and/or ASD, with treatment lasting three months, showing improvements in speech, communication, and behavioral abilities[203][204]. - The standardized TCM formula has shown to reduce ADHD and ASD symptoms, with interim results indicating a decrease in VADRS total scores for 22 out of 28 participants after three months of treatment[236]. - All parents in the efficacy trial reported pronounced improvements in their child's symptoms within three months, preferring the TCM treatment over mainstream medications[226]. - The second efficacy trial commenced in August 2021, enrolling 28 patients diagnosed with ADHD and/or ASD, with treatment duration also set for three months[263]. - The second trial demonstrated similar improvements in symptoms, including better speech, communication, and overall health, with patients experiencing better bowel movement and sleep quality[264]. - Assessment tools used in both studies included SKATBT-A, ATEC, and VADRS, which provided quantitative and qualitative data on patient conditions[266]. - The first study was designed with a small sample size to collect preliminary data and prepare for larger efficacy trials[256]. - The company plans to conduct further efficacy trials with a larger sample size using standardized TCM formulas[263]. TCM Industry and Market - The company aims to commercialize the TCM formula first in Hong Kong and then expand globally to address unmet medical needs in ADHD and ASD populations[185]. - The TCM Practitioner has over 30 years of experience treating ADHD and ASD patients and has developed a personalized TCM formula based on his clinical practice[193]. - The company has exclusive rights to the TCM formula and related intellectual property developed by the TCM Practitioner under the Strategic Partnership Agreement[194]. - The company plans to establish partnerships for centralized production facilities to streamline production and support regulatory approvals for the TCM formula[191]. - There are no large TCM companies providing similar ADHD and ASD products in the Hong Kong market, indicating a fragmented market with no major competitors[209]. - The TCM industry in Hong Kong has been growing since supportive initiatives were launched in 1997, with over 8,000 licensed TCM traders as of October 2024[206]. - The Hong Kong Government has allocated HK$500 million to the Chinese Medicine Development Fund to support research and enhance the role of TCM in primary healthcare[207]. Regulatory and Compliance - The regulatory framework for TCM in Hong Kong differs from that of the pharmaceutical industry, with TCM products registered with the Hong Kong Chinese Medicines Board[208][213]. - The company must register proprietary Chinese medicine (pCm) products with the Chinese Medicines Board before selling or importing them[274]. - A maximum fine of HK$100,000 and imprisonment for two years applies for selling unregistered pCm products[275]. - Manufacturers and traders of pCm are required to obtain a license from the Chinese Medicines Board[276]. - Non-compliance with labeling requirements for pCm can result in a maximum fine of HK$100,000 and imprisonment for two years[280]. - The Food Safety Ordinance mandates registration for food importers and distributors, with penalties of up to HK$50,000 and six months imprisonment for non-compliance[283]. - Record-keeping for food supply must include details such as supply date, recipient information, total quantity, and food description[284]. - Importing or exporting certain Chinese herbal medicines without a license can lead to fines of HK$500,000 and imprisonment for two years[288]. - The Public Health Ordinance requires food manufacturers to ensure products are fit for human consumption, with penalties for violations[290]. - Prepackaged food must comply with specific labeling requirements, including energy value and nutrient content[298]. - Trademarks must be registered with the Trade Marks Registry to enjoy protection under Hong Kong law[299]. Intellectual Property and Future Plans - The company plans to file patent applications for its TCM formula and relies on trade secrets and trademarks to protect its intellectual property[202]. - The company intends to file patent applications for its TCM formula to protect its intellectual property and maintain a competitive position[231][239]. - The company aims to integrate AI, blockchain, and cryptocurrency to enhance its treatment offerings and create a holistic digital health ecosystem[238]. - The TCM formula consists solely of natural ingredients and is personalized for each patient, targeting various severities and symptoms of ADHD and ASD[245]. - The company plans to commercialize its liquid-based standardized TCM formula in Hong Kong and may expand to other markets after successful commercialization[235][243]. - The company plans to establish centralized production facilities to reduce manufacturing costs and support increased demand for its standardized TCM formula[240]. - The company maintains a three-year lease for its office in Hong Kong, which commenced on August 2, 2024[267].