Charming Medical (MCTA) Registration Filing summary

Company overview and business model

• Operates as a Hong Kong-based provider of TCM-inspired beauty, wellness, and postpartum services and products, primarily for women, with a growing franchise model and consultancy services.

• All operations are conducted through four Hong Kong subsidiaries under a BVI holding company structure, with no operations in Mainland China.

• Revenue streams include direct services, product sales, consultancy, and franchise fees, with a focus on TCM therapies, supplements, and training.

• Franchise model launched in March 2025, granting exclusive rights to operate branded outlets, with revenue from initial fees, royalties, and brand management.

Financial performance and metrics

• FY2025 revenue: $6.22M (up 3.4% YoY); net income: $1.20M (up 45.9% YoY); working capital deficit as of March 31, 2025: $1.58M.

• Beauty, wellness, and postpartum services accounted for 96% of FY2025 revenue; product sales 3.2%; franchise 0.8%; consultancy 0%.

• Operating expenses decreased 3.5% YoY, mainly due to lower rental, depreciation, and staff costs, partially offset by higher advertising and training expenses.

• Auditor issued a going concern opinion due to working capital deficits, though management expects to meet liquidity needs through operations and shareholder support.

Use of proceeds and capital allocation

• Estimated net proceeds of $6.6M (at $5.00/share IPO price) to be allocated: 40% for business/geographic expansion, 30% for strategic investments/acquisitions, 10% for R&D, and 20% for working capital.

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