10-K: Regenerex Pharma Reports Reduced Net Loss Amidst Strategic Expansion and Funding Efforts, Faces Going Concern Doubt

Regenerex Pharma, Inc. reported a reduced net loss for the fiscal year ended March 31, 2025, driven by decreased research and development expenses, while actively pursuing significant strategic partnerships and additional capital to address ongoing liquidity challenges and a going concern doubt.

Summary

• Regenerex Pharma, Inc. specializes in developing and commercializing advanced wound care healing products, operating through three proprietary technologies: Chronic Wound Closure, Acute Wound Acceleration, and Contamination Control.
• The company's core technology, QBx, addresses wound healing by down-regulating proteases and matrix metalloproteases (MMPs), which are elevated in approximately 80% of chronic wounds.
• Current products include Xcellderma OTC (liquid bandage skin protectant) and Accelerex Sterile Wound Cream (a medical device containing QBx for chronic and acute wounds).
• Clinical trials have shown the Wound Closure System achieving closure rates of up to 95% in non-responding chronic wounds within 90 days.
• The company reported no revenue for the fiscal years ended March 31, 2025, and 2024.
• Net loss decreased to $2,527,041 for the year ended March 31, 2025, from $3,543,827 for the year ended March 31, 2024, primarily due to a decrease in research and development expenses.
• Cash and equivalents significantly increased to $653,025 as of March 31, 2025, from $372 as of March 31, 2024.
• Cash used in operating activities increased to $1,625,351 in 2025 from $457,548 in 2024, indicating a higher cash burn from operations.
• Cash provided by financing activities substantially increased to $2,279,232 in 2025 from $463,084 in 2024, primarily from the sale of common stock and warrants, and notes payable.
• The company incurred a material loss of $383,908 due to a sophisticated hacking incident on one of its bank accounts on March 12, 2025, with only $15,772 recovered.
• Regenerex Pharma has current liabilities exceeding current assets by $4,270,172, raising substantial doubt about its ability to continue as a going concern.
• The company is actively negotiating with its first State Medicaid program for contracts that represent potential annual revenue streams exceeding $100 million.
• An AI-driven information system is under development in partnership with Optimize Health Partners to revolutionize wound management, patient adherence tracking, and personalized medication protocols.
• The company's lab re-certification process for drug and medical device manufacturing is underway.

Sentiment

Score: 3

Explanation: The company faces significant financial distress, including a going concern doubt, negative working capital, and no revenue. While there are promising strategic initiatives and a reduced net loss, the operational cash burn, material hacking loss, and internal control weaknesses indicate high risk and uncertainty. The reliance on future capital raises for survival is a major concern.

Positives

• Net loss decreased significantly to $2,527,041 in fiscal year 2025 from $3,543,827 in fiscal year 2024, primarily due to reduced research and development expenses.
• Cash and equivalents increased substantially to $653,025 as of March 31, 2025, from $372 as of March 31, 2024, indicating successful capital raising efforts.
• The company's proprietary QBx technology has demonstrated high clinical efficacy, achieving up to 95% closure rates in non-responding chronic wounds within 90 days.
• Regenerex Pharma holds significant competitive advantages through its unique QBx technology, superior closure rates, cost-effective protocols, and comprehensive product portfolio.
• Strategic initiatives include developing managed care agreements with southeastern states for Medicaid wound care patients, with potential annual revenue exceeding $100 million.
• The company is pursuing international expansion opportunities in Asian and Middle Eastern markets through distribution negotiations.
• The development of a proprietary AI-driven information system is underway, which is expected to improve clinical outcomes and reduce healthcare costs, providing a competitive advantage.
• Kenneth W. Perry, with 40 years of healthcare industry experience, was hired as the new Chief Financial Officer, strengthening the executive leadership team.

Negatives

• The company has no revenue history and has not generated any revenue from its asset acquisitions to date.
• Regenerex Pharma incurred a net loss of $2,527,041 for the fiscal year ended March 31, 2025, and has accumulated a deficit of $8,142,891.
• The company has current liabilities in excess of current assets by $4,270,172, raising substantial doubt about its ability to continue as a going concern.
• Cash used in operating activities increased to $1,625,351 in fiscal year 2025, indicating a higher operational cash burn.
• A material loss of $383,908 was incurred due to a sophisticated hacking incident on a bank account on March 12, 2025, with only $15,772 recovered.
• Management concluded that the company's internal control over financial reporting was not effective as of March 31, 2025, and material weaknesses existed.
• The company is not diversified and is dependent on a single business, making it vulnerable to economic fluctuations within the wound care industry.
• The company's shares are not quoted on a national exchange, and there is no established public trading market for its common stock.

Risks

• The company faces significant competition from existing consumer product companies.
• As an emerging growth company, reduced disclosure requirements may make its shares less attractive to investors, potentially leading to a less active trading market and more volatile share price.
• The company has a lack of revenue history and a limited history of operations, operating as a start-up venture with no assurance of success or profitability.
• Additional financing is needed to execute the business plan, and there are no commitments for such funds, which may jeopardize operations.
• Increased expenses related to SEC filing requirements could jeopardize the company's filing status if costs cannot be met.
• The company's lack of diversification subjects it to economic fluctuations within the wound care industry.
• Future issuance of more shares could cause a loss of control and dilution for present management and current stockholders.
• The company is heavily dependent on the skills and attention of its limited management team and consultants, and their inability to devote full-time attention could delay progress.
• The departure or inability to retain key personnel could compromise the company's ability to execute its strategic plan.
• The regulation of penny stocks by the SEC and FINRA may discourage the tradability of the company's securities.
• Officers and directors collectively own approximately 71.230% of outstanding common stock, allowing them to control stockholder voting outcomes and potentially depress the stock price.
• The company's internal control over financial reporting was not effective as of March 31, 2025, with material weaknesses identified, including a lack of in-house personnel with technical knowledge for complex transactions.
• A material loss of $383,908 was incurred due to a sophisticated hacking incident on a bank account, with a significant portion of funds still unrecovered.

Future Outlook

Regenerex Pharma is entering a pivotal phase of strategic expansion, actively negotiating managed care agreements with southeastern states for Medicaid wound care patients, which could generate over $100 million in annual revenue. The company is also engaging with major private insurance networks for preferred provider status and pursuing international distribution opportunities in Asia and the Middle East. A proprietary AI-driven information system is under development to revolutionize wound management, patient adherence, and personalized medication protocols, aiming to improve clinical outcomes and reduce healthcare costs. The company is seeking to raise an additional $500,000 by the end of July 2025 to provide adequate cash until contracts commence.

Management Comments

• Management believes that the company's distinct advantage lies in its ability to heal chronic, non-healing wounds through the down-regulation of proteases, a mechanism not successfully achieved by other currently available products.
• Management believes the wound care healing space is well suited for Home Care service providers that are funded by the US Government.
• Management expects that the company will need to curtail operations, seek additional capital on less favorable terms, and/or pursue other remedial measures if unable to raise additional capital in the near future or meet financing requirements.
• Management will strive within the confines of practical limitations to prevent patterns of fraud and abuse historically seen in the penny stock market from being established with respect to the company's securities.

Industry Context

The U.S. wound care market is experiencing significant changes due to the Affordable Care Act (ACA), which has shifted reimbursement structures to pay-for-performance models across hospitals, nursing homes, home health, and wound care clinics. This transition creates a strong market opportunity for cost-effective, high-performance solutions like Regenerex Pharma's Wound Closure System. The company is strategically targeting 'at-risk' payment models, particularly in the fastest-growing segments of home health and nursing homes, driven by an aging population and increasing rates of diabetes and obesity. The prevalence of chronic wounds, affecting nearly seven million Americans and imposing substantial healthcare costs, underscores the critical market need for effective treatments that address underlying cellular environments, which traditional dressings often fail to do.

Comparison to Industry Standards

• Regenerex Pharma's QBx technology is positioned as the most efficacious, clinically proven chronic wound care technology globally, with reported closure rates of up to 95% of non-responding chronic wounds within 90 days, which is superior to conventional treatments that have failed these wounds.
• Unlike traditional wound dressings (e.g., hydrocolloids, collagens) that primarily absorb wound fluids, Regenerex's solutions actively modify the cellular environment through protease down-regulation, a unique mechanism of action not found in other currently available products for chronic, non-healing wounds.
• The company's strategic focus on 'at-risk' payment models in home health and nursing homes aligns with the evolving reimbursement landscape under the Affordable Care Act, positioning it to capitalize on cost pressures in the healthcare system where payors seek new approaches for cost constraints and product performance.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not currently involved with and does not have knowledge of any pending or threatened litigation against the company or any of its officers.

Related Party Transactions

• The company purchased assets from its current Chief Executive Officer (CEO) and Secretary/Treasurer.
• A lease agreement dated June 10, 2023, was entered into with Woundcare Labs, LLC, a party related to the CEO, for a plant and equipment in Tennessee.
• The CEO advanced $9,962 and $3,490 to the company for operating expenses during the years ended March 31, 2025, and 2024, respectively, totaling $13,652 and $3,690 as of those dates. These advances are unsecured, non-interest bearing, and due on demand.
• The CEO advanced $284,460 and $120,000 to the company for operating expenses during the years ended March 31, 2025, and 2024, respectively, consolidated into a $306,103 note as of March 31, 2025. This note is unsecured, bears 10% interest per annum, and is due September 30, 2025.
• On August 17, 2023, the company purchased certain intellectual property from a related party in exchange for a $2,400,000 interest-free note payable. This note was extended to August 17, 2025, with a 10% payment of the outstanding balance.
• Contingent consideration of $607,500 (FY2025) and $43,500 (FY2024) was paid to the CEO under the November 15, 2021 Asset Purchase Agreement, representing 15% of gross revenues or investment money (amended to 25% for investment money in January 2025).
• A consulting agreement was signed with Lee Ori, a Director, for bringing contracts to the company, with fees paid on a percentage basis (average commission rate of approximately 7%).
• An information systems evaluation contract was signed with Optimize Health Partners, a company owned by the CFO, Kenneth W. Perry.
• The company is negotiating a final contract with Holista, a company in which Greg Pilant (CEO and Director) has ownership and sits on the Board of Directors, for exclusive worldwide territory rights for the use of Ovicoll95 in all wound care applications.

Stakeholder Impact

• **Shareholders:** Face significant dilution risk from future equity issuances and potential loss of control due to high insider ownership. The lack of revenue, going concern doubt, and penny stock status pose substantial investment risks. No dividends are anticipated.
• **Employees:** The company's ability to attract and retain qualified personnel is crucial for future success, and the current financial instability could impact job security and growth opportunities.
• **Customers (Healthcare Providers/Patients):** Potential for improved wound care outcomes through proprietary technologies and cost-effective solutions. The expansion into Medicaid and private insurance networks could increase patient access.
• **Suppliers/Creditors:** The company's negative working capital and going concern doubt indicate potential risks for timely payments to suppliers and repayment of debt to creditors, including related parties.
• **Regulatory Authorities:** The company operates within a comprehensive regulatory environment (FDA, FTC, international bodies) and is undergoing FDA re-certification, indicating ongoing compliance efforts.

Next Steps

• Continue negotiations with the first State Medicaid program to secure contracts for wound care management.
• Actively engage with major private insurance networks to secure preferred provider status.
• Complete the lab re-certification process for drug and medical device manufacturing.
• Continue development and implementation of the proprietary AI-driven information system with Optimize Health Partners.
• Pursue distribution opportunities and negotiations with distributors in Asian and Middle Eastern markets.
• Raise an additional $500,000 by the end of July 2025 to support operations until contracts commence.
• Address the material weaknesses in internal control over financial reporting and implement additional enhancements.
• Form a separate audit committee and seek potential independent directors.
• Negotiate a final contract with Holista related to the exclusive worldwide territory rights for the use of Ovicoll95 in all wound care applications.

Key Dates

Recommendation

Keywords

Wound Care, Biotechnology, Chronic Wounds, QBx, Regenerex Pharma, SEC Filing, 10-K, Healthcare, Medical Devices, Pharmaceuticals, Diabetic Ulcers, Pressure Ulcers, Burns, Surgical Wounds, FDA Clearance, Medicaid, International Expansion, AI-driven Systems, Going Concern, Capital Raise