Full Press Release Details
Regencell Bioscience Holdings Limited Announces
First Half 2024 Financial Results
HONG KONG, June 20, 2024 - Regencell Bioscience
Holdings Limited (Nasdaq: RGC) (the "Company"), today announced its unaudited condensed consolidated interim financial results
for the six months ended December 31, 2023.
Results of Operations
| For the Six Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | Change | Change | |||||||||||||
| 2023 | 2022 | Amount | % | |||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling and marketing | $ | 97,062 | $ | 98,093 | $ | (1,031 | ) | (1 | )% | |||||||
| General and administrative (including share-based compensation of approximately $0.3 million and $0.5 million for the six-month ended December 31, 2023 and 2022 respectively) | 1,730,043 | 1,981,253 | (251,210 | ) | (13 | )% | ||||||||||
| Research and development (including reversal of share-based compensation of approximately $0.1 million and share-based compensation of approximately $0.4 million for the six-month ended December 31, 2023 and 2022 respectively) | 484,750 | 1,350,173 | (865,423 | ) | (64 | )% | ||||||||||
| Total operating expenses | 2,311,855 | 3,429,519 | (1,117,664 | ) | (33 | )% |
During the six-month period ended December 31,
2023, we incurred total operating expenses of approximately $2.3 million, a decrease of approximately $1.1 million, or 33%, as compared
to total operating expenses of approximately $3.4 million during the six-month period ended December 31, 2022.
Selling and marketing expenses decreased by approximately
$1 thousand, or 1%, to approximately $0.1 million for the six-month period ended December 31, 2023 from approximately $0.1 million for
the six-month period ended December 31, 2022. Selling and marketing expenses mainly related to digital marketing promotions and they remained
at a stable level for both periods.
General and administrative expenses decreased
by approximately $0.3 million, or 13%, to approximately $1.7 million for the six-month period ended December 31, 2023 from approximately
$2.0 million for the six-month period ended December 31, 2022. The decrease was mainly attributable to (i) decrease in share-based compensation
for general and administrative personnel of approximately $0.2 million and (ii) decrease in corporate apartment expenses of approximately
$0.1 million as fewer corporate apartments were rented for the six-month period ended December 31, 2023.
Research and development expenses decreased by
approximately $0.9 million, or 64%, to approximately $0.5 million for the six-month period ended December 31, 2023 from approximately
$1.4 million for the six-month period ended December 31, 2022. The decrease was mainly attributable to (i) an approximately $0.3 million
decrease in expenses for medication and materials for product development; (ii) an approximately $0.5 million decrease in expenses for
share-based compensation for research and development personnel; and (iii) an approximately $0.1 million decrease in salary expenses during
the six-month period ended December 31, 2023.
| For the Six Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | Change | Change | |||||||||||||
| 2023 | 2022 | Amount | % | |||||||||||||
| OTHER INCOME AND EXPENSE: | ||||||||||||||||
| Other income | $ | 227,290 | $ | 114,283 | $ | 113,007 | 99 | % | ||||||||
| Other expense | (101,328 | ) | (4 | ) | (101,324 | ) | 2,533,100 | % | ||||||||
| Total other income, net | 125,962 | 114,279 | 11,683 | 10 | % |
Total other income, net was approximately $0.1
million for the six-month period ended December 31, 2023 and total other income, net was approximately $0.1 million for the six-month
period ended December 31, 2022.
Other income mainly consisted of cash received
from a government grant and interest income. The increase was mainly due to an increase in interest income of approximately $0.1 million
from time deposit placed at bank.
Other expense mainly consisted of donation incurred
during the six-month period ended December 31, 2023. The increase was mainly due to increase of donations made of approximately $0.1 million.
Provision for income taxes
As we incurred a loss for the six-month period
ended December 31, 2023 and 2022, no provision for income taxes was made. No significant penalties
or interest relating to income taxes have been incurred during the six-month period ended December 31, 2023 and 2022.
Our net loss decreased by approximately $1.1 million,
or 34%, to approximately $2.2 million for the six-month period ended December 31, 2023, from approximately $3.3 million for the six-month
period ended December 31, 2022. Such change was a result of the combination of the changes described above.
Net loss attributable to Regencell Bioscience
After deducting non-controlling interests of approximately
$0.1 million, net loss attributable to our holding company, Regencell Bioscience Holdings Limited decreased from approximately $3.3 million
net loss for the six-month period ended December 31, 2022 to approximately $2.2 million net loss for the six-month period ended December
Basic and diluted loss per share
Basic and diluted losses per share were $0.16
for the six-month period ended December 31, 2023, compared to $0.25 in the same period of 2022. For
the six-month period ended December 31, 2023 and 2022, there were no dilutive shares.
As of December 31, 2023, we had cash of approximately
$4.8 million compared to approximately $1.6 million as of June 30, 2023. The increase of cash was mainly due to the receipt of proceeds
of investment at maturity in November 2023 amounted to approximately $10.2 million and offset by an reinvestment of $5 million in November
UNAUDITED CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2023
UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
| As of December 31, | As of June 30, | |||||||
| 2023 | 2023 | |||||||
| Current assets | $ | 9,832,741 | $ | 11,621,343 | ||||
| Other assets | 642,424 | 1,000,412 | ||||||
| Total assets | 10,475,165 | 12,621,755 | ||||||
| Total liabilities | 312,554 | 632,320 | ||||||
| Total shareholders' equity | 10,162,611 | 11,989,435 | ||||||
| Total liabilities and shareholders' equity | $ | 10,475,165 | $ | 12,621,755 |
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS
OPERATIONS AND COMPREHENSIVE LOSS
| For the Six Months Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| OPERATING EXPENSES: | ||||||||
| Selling and marketing expenses | $ | 97,062 | $ | 98,093 | ||||
| General and administrative expenses (including share-based compensation of approximately $0.3 million and $0.5 million for the six-month ended December 31, 2023 and 2022 respectively) | 1,730,043 | 1,981,253 | ||||||
| Research and development expenses (including reversal of share-based compensation of approximately $0.1 million and share-based compensation of approximately $0.4 million for the six-month ended December 31, 2023 and 2022 respectively) | 484,750 | 1,350,173 | ||||||
| Total operating expenses | 2,311,855 | 3,429,519 | ||||||
| LOSS FROM OPERATIONS | $ | (2,311,855 | ) | $ | (3,429,519 | ) | ||
| OTHER INCOME AND EXPENSE | ||||||||
| Other income | 227,290 | 114,283 | ||||||
| Other expense | (101,328 | ) | (4 | ) | ||||
| Total other income, net | 125,962 | 114,279 | ||||||
| LOSS BEFORE INCOME TAX EXPENSE | (2,185,893 | ) | (3,315,240 | ) | ||||
| PROVISION FOR INCOME TAXES | - | - | ||||||
| NET LOSS | $ | (2,185,893 | ) | $ | (3,315,240 | ) | ||
| NET LOSS ATTRIBUTABLE TO: | ||||||||
| Shareholders of the Company | (2,066,622 | ) | (3,227,378 | ) | ||||
| Non-controlling interests | (119,271 | ) | (87,862 | ) | ||||
| $ | (2,185,893 | ) | $ | (3,315,240 | ) | |||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Foreign currency translation adjustment | 44,094 | - | ||||||
| COMPREHENSIVE LOSS | $ | (2,141,799 | ) | $ | (3,315,240 | ) | ||
| NET COMPREHENSIVE LOSS ATTRIBUTABLE TO: | ||||||||
| Shareholders of the Company | (2,022,528 | ) | (3,227,378 | ) | ||||
| Non-controlling interests | (119,271 | ) | (87,862 | ) | ||||
| $ | (2,141,799 | ) | $ | (3,315,240 | ) | |||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||||||
| Basic and diluted | 13,012,866 | 13,012,866 | ||||||
| LOSS PER SHARE | ||||||||
| Basic and diluted | $ | (0.16 | ) | $ | (0.25 | ) |
About Regencell Bioscience
We are a holding company
incorporated on October 30, 2014 under the laws of the Cayman Islands, and conduct our business in Hong Kong through our wholly-owned
subsidiary, Regencell Bioscience Limited, a company incorporated in Hong Kong on May 12, 2015, and Regencell Limited, a company incorporated
in Hong Kong on November 20, 2014. We are an early-stage bioscience company that focuses on research, development and commercialization
of Traditional Chinese Medicine ("TCM") for the treatment of neurocognitive disorders
and degeneration, specifically Attention Deficit Hyperactivity Disorder ("ADHD") and
Autism Spectrum Disorder ("ASD"), as well as infectious diseases affecting people's immune system such as COVID-19.
Our goal is to save and improve the lives of the patients, their families and caregivers and become a market leader for natural and holistic
treatments for neurological disorders and infectious diseases globally.
Our TCM formulae candidates are derived from a
TCM base formula and an adjustable formula developed by Regencell's strategic partner, TCM Practitioner, Mr. Sik-Kee Au, based on
his TCM brain theory, known as "Sik-Kee Au TCM Brain Theory " ("TCM Brain Theory"), and have been
demonstrated to reduce severity in patients' ADHD and ASD conditions, as reflected in lower Autism
Treatment Evaluation Checklist ("ATEC"), Gilliam Autism Rating Scale ("GARS"), Vanderbilt ADHD Diagnostic Parent
Rating Scale ("VADRS") and Swanson, Nolan, and Pelham (SNAP)-IV 26-item Parent Rating Scale ("SNAP-IV-26")
assessment scores, using the personalized TCM formula in our first research study and standardized TCM formula in our second research
trial. The activity and specificity of the TCM base formula have been optimized by the TCM Practitioner in his prior ADHD and ASD treatments.
As of the date hereof, the TCM Practitioner has standardized the adjustable formula into three Fixed Adjusted Formulas for mild, moderate
and severe ADHD and ASD conditions. The TCM Brain Theory is not recognized in general literature of TCM or elsewhere. However, the TCM
Practitioner has prescribed the TCM formula based on his TCM Brain Theory for over 30 years to treat ADHD, ASD and many neurological illnesses,
disorders and degeneration and obtained satisfactory clinical treatment results. Such clinical treatment results are not supported by
controlled clinical data or trials.
We aim to launch three standardized liquid-based
TCM formulae candidates for mild, moderate and severe ADHD and ASD patients in Hong Kong first and subsequently to other markets as we
deem appropriate. To further verify the standardized medicine efficacy, the TCM Practitioner treated
the enrolled patients with the use of the standardized TCM formulae. The enrolled patients' ages ranged from five to thirteen
years old. All enrolled patients completed a three-month treatment. Under the treatment by the TCM Practitioner, the enrolled patients
consumed liquid-based TCM twice a day, which was prepared based on standardized TCM formulae by our TCM Practitioner, and temporarily
stopped consuming any other medicines. All the enrolled patients and their parents were required to meet with the TCM Practitioner in
his clinic weekly and provide regular reports to update the patients' symptoms and conditions by phone.
Note Regarding Forward-Looking Statements
press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of
1995. You can identify some of these forward-looking statements by words or phrases such as "may," "will," "expect,"
"anticipate," "aim," "estimate," "intend," "plan," "believe,"
"is/are likely to," "potential," "continue" or other similar expressions. Statements that are not
historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Among other
things, the business outlook from management in this press release, as well as the Company's strategic and operational plans, contain
forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities
and Exchange Commission ("SEC") on Forms 20-F and 6-K, in its annual reports to shareholders, in its and other written materials