Charming Medical (MCTA) Registration Filing summary

Company overview and business model

• Operates as a Hong Kong-based provider of Traditional Chinese Medicine (TCM)-inspired beauty, wellness, and postpartum services and products, primarily through four wellness centers under the Beauty Lab brand.

• Revenue streams include beauty, wellness, and postpartum services (96.6% of FY2024 revenue), product sales (1.5%), and consultancy services (1.9%).

• The company is a holding entity incorporated in the British Virgin Islands (BVI), with all operations conducted by Hong Kong subsidiaries.

• Offers a wide range of TCM-inspired therapies, supplements, and technical training to other institutions.

Financial performance and metrics

• FY2024 revenue: $6,015,375 (up 70.4% from $3,530,822 in FY2023); net income: $821,743 (vs. net loss of $335,605 in FY2023).

• For the six months ended September 30, 2024: revenue $2,958,508 (up 12% YoY), net income $468,817 (up 24.1% YoY).

• Working capital deficit as of September 30, 2024: $2,281,970; cash and cash equivalents: $2,692,056.

• Auditor expressed substantial doubt about ability to continue as a going concern due to persistent working capital deficits.

• No customer accounted for more than 10% of revenue; no significant customer concentration risk.

Use of proceeds and capital allocation

• Estimated net proceeds of $6.6 million (assuming $5.00/share IPO price, no over-allotment).

• 40% for business and geographic expansion (e.g., new wellness centers in Southeast Asia), 30% for strategic investments and acquisitions, 10% for R&D (including technology and product development), 20% for general working capital.

• No plans to pay cash dividends in the foreseeable future; earnings to be retained for growth.