On March 28, 2024, BrainAurora Medical Technology Co., Ltd. (hereinafter referred to as “BrainAurora”) from Shaoxing, Zhejiang submitted a prospectus on the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board. This is another application after its submission expired on August 8, 2023.
Link to the Aurora Borealis prospectus:
Main business
Brain Motion Aurora was founded in 2012. As a commercial-stage company, it has become a senior participant in the digital therapy market for cognitive impairment in China. It is also the first company in China to combine brain science with advanced artificial intelligence technology to develop medical-grade digital therapy products, and has established end-to-end capabilities from R&D to commercialization.
The Aurora Brain product line covers the evaluation and intervention of a wide range of cognitive impairment induced by vascular diseases, neurodegenerative diseases, mental illness, and developmental defects in children.
As of March 20, 2024, the core product of Aurora Brain, the “Brain Function Information Management Platform Software System”, is a medical-grade digital therapy product based on evidence-based medicine. It is also the first digital therapy product for cognitive impairment in China to obtain regulatory approval. Currently, it has commercialized eight indications for the four main types of cognitive impairment, and another 21 cognitive impairment indications are being developed.
As of the same date, 4 other products of Aurora Brain have been approved by the regulatory authorities, and 5 candidate products are in various pre-clinical and clinical development stages, including:
Three products have obtained regulatory approval in China: basic cognitive ability testing software (BCAT), cognitive ability assisted screening assessment software (SAS), and dyslexia assisted screening assessment software (DSS);
1 product has obtained regulatory approval in the EU: cognitive impairment treatment software;
5 candidate products: cognitive impairment assessment and rehabilitation training software due to the novel coronavirus, ADHD (attention deficit hyperactivity disorder) assessment and treatment software, quantitative assessment software for depression cognition, software for treating depression, cognitive impairment assessment software, and cognitive dysfunction treatment software.
The core products of Aurora Borealis have been included in the provincial medical insurance reimbursement catalogues of 30 provinces in China. According to data from Frost and Sullivan, Aurora Brain is also the first organizer of the project initiated by the National Health and Health Commission. The company's mission under this project is to help hospitals establish cognitive centers in more than 2,100 public hospitals across the country and promote the development of the digital therapy market for cognitive impairment in China.
Brain Aurora's revenue comes from (i) providing in-hospital system integrated software solutions to enable hospitals to provide evaluation and intervention for patients with cognitive impairment; (ii) providing out-of-hospital system integration software solutions to individual patients; (iii) research project services provided to research institutions; (iv) ancillary training services to assist customers in organizing and logistics infrastructure of training courses for medical experts specializing in cognitive impairment; and (v) others, such as sales system embedded hardware and related user accounts.
Shareholder structure
According to the prospectus, in the pre-listing shareholding structure, Brainstorming Aurora
Mr. Tan Zheng holds 25.38% of the shares through zTAN Limited;
Dr. Wang Xiaoyi holds 10.05% of the shares through Wispirits Limited;
Dr. Wang Xiaoyi, Mr. Jin Yedong, and Mr. Guan Song hold 4.10% of the shares through Wiseforward Limited (Dr. Wang has all voting rights);
Dr. Wang Xiaoyi, Dr. Xiang, Mr. Lin Xiang, Mr. Wang Qingquan, and Mr. Wang Sen hold 2.80% of the shares through Neurobright Limited (Dr. Wang has all voting rights);
Tianjin Kangsheng's limited partners Mr. Zhao Yujie, Mr. Zhang Ben, Mr. Fu Rong, Ms. Zhang Xueting, Ms. Xing Dan, Ms. He Dingjuan, Mr. Guo Xiaohua, Ms. Sun Fan, Mr. Chen Shuwang, and Mr. Jin Yedong, passed Healthblooming Limited (Mr. Tan has all voting rights), holding 9.13% of the shares;
Affiliates of Tianjin Chengye hold 3.72% of the shares through Integrity Limited (Mr. Tan has all voting rights);
Mr. Tan Zheng and Dr. Wang Xiaoyi acted in concert. Based on Mr. Tan Zheng's opinions and votes, they controlled a total of about 55.18% of the voting rights of these shareholders.
Ms. Li Mingqiu holds 11.38% of the shares through Crusky Limited;
Wisdomspirit Holding Limited, the share award scheme trust holds 7.85% of the shares;
Northern Light Venture Capital holds 0.88%, 10.66%, and 0.15% of the shares through NLSF, NLVF, and NLPF, respectively.
Mr. Lu Yajun holds 6.47% of the shares through China Fangda Capital Holdings;
CICC holds 1.79% of the shares through CICC Healthcare;
Beijing Pegasus Travel holds 1.59% of the shares;
Shenzhen Fengrui holds 1.31% of the shares;
An affiliate of Anji Shundian holds 1.03% of the shares through Anji Shundian Limited;
Ms. Li Qing, through Ambertech Limited, holds 0.69% of the shares;
Mr. Huang Guangwei holds 0.69% of the shares;
Ms. Wang Jie holds 0.34% of the shares through Jenny Wang Limited;
Directors and Executives
The board of directors of Brain Dragon consists of 8 directors, including 2 executive directors (Mr. Tan Zheng, Dr. Wang Xiaoyi), 3 non-executive directors (Mr. Li Sirui, Ms. Li Mingqiu, and Mr. Deng Feng), and 3 independent non-executive directors (Mr. Lin Xiaobo, Dr. Duan Tao, and Mr. Li Yuezhong).
In addition to the executive director, executives include Cai Longjun, Chief Technology Officer and Chief Operating Officer; Mr. Wang Junjie, Chief Financial Officer; and Mr. Lai Zhiyuan, Vice President of Marketing and Operations.
Company performance
According to the prospectus, in the past 2022 and 2023, Brain Motion Aurora's revenue was RMB 11.291,000 and RMB 67.20 million, respectively; R&D expenses for the corresponding period were RMB 67.627 million and RMB 907.33 million respectively; net losses for the corresponding period were RMB 502 million and RMB 359 million, respectively.
Intermediary team
The brokerage team for this IPO was mainly composed of CICC and SPDB International as co-sponsors; Deloitte and Touche as its auditors; Commerce and Dawei were the company's Chinese lawyers and the company's Hong Kong and US lawyers respectively; Zhong Lun and Colu were the Chinese lawyers for the brokerage firm and Hong Kong and US lawyers respectively; and Frost Sullivan was the industry consultant.