We are a development stage company whose subsidiaries are focused on the commercial development of biological products for the prevention and treatment of human infectious diseases. Through our wholly owned subsidiaries, we develop and commercialize HIV-PV Vaccine I, a vaccine designed to prevent and treat infection by the human immunodeficiency virus, or HIV. The original HIV-PV Vaccine I technology was co-developed by Dr. Liang Qiao, our chief executive officer and an associate professor at Loyola University Chicago, and is owned by Loyola University. In June 2002, Loyola University exclusively licensed this technology to our subsidiary Bio-Bridge Science Corporation with respect to People's Republic of China, Japan and the United States. Pursuant to an agreement with the Beijing Institute of Radiation Medicine, most of the pre-clinical testing of HIV-PV Vaccine I on laboratory animals in mainland China was completed in October 2005. Once the pre-clinical testing is completed, we plan to apply to China's State Food and Drug Administration for approval to conduct clinical trials of HIV-PV Vaccine I.
Our primary strategy is to develop, test and obtain regulatory approval for HIV-PV Vaccine I in China first and then in the United States and Japan. In May 2003, we purchased the right to use for fifty years approximately 2.8 acres of land in the Tianzhu Export Processing Zone, Shunyi District, Beijing, China to develop a laboratory and biomanufacturing facility in compliance with Good Manufacturing Practices, or GMP, regulations primarily for clinical trials of HIV-PV Vaccine I. Under Chinese law, there is no private ownership of land, and accordingly, we do not own this land. In July 2003, we engaged a contractor to design the GMP facility. As of December 15, 2005, we have completed the construction of the outside body of our laboratory and biomanufacturing facility. The approximate total cost of building and outfitting this facility is $3,000,000. As of December 29, 2005, we have paid all amounts owed.
After completion of pre-clinical animal testing through collaboration with Beijing Institute of Radiation Medicine, we intend to submit application for approval of clinical study to Beijing branch of SFDA. If we receive approval, we will conduct Phase I, II and III human clinical trials. If these clinical trials show that our vaccine is safe and effective, we will apply for a new drug approval certificate and approval for sale. We intend to conduct a phase IV clinical study after our vaccine is made available to the market.To date, we have not commenced clinical testing of this vaccine, nor has it been approved by the China State Food and Drug Administration or any other regulatory agency. Further, we have not received any revenues to date and, until we receive the necessary approvals from the SFDA or a similar regulatory authority located in Japan or the United States, we will not have any revenues.
On November 21, 2005, we entered into an exclusive distribution agreement with Xinhua Surgical Instruments Co, Ltd., located in Shandong, China. Under this agreement, we have been granted exclusive distribution rights for all Xinhua surgical instruments in the United States, which are subject to FDA approval. Our minimum turnover requirement begins in the second year in the amount of $50,000 and increases to $60,000 during the third year and increases 10% annually thereafter. We are responsible for advertising and marketing expenses in connection with distribution of Xinhua surgical instruments in the United States. Subject to minimum turnover requirements, our exclusivity rights in the United States will be extended unless we fail to fulfill the minimum turnover requirements. On December 6, 2005, we received confirmation from the FDA of our registration as a medical device establishment, which enables us to perform initial distributor and repackager operations. This confirmation is not FDA approval of any product or any of our activities. It is neither a license, nor a certification. We intend to begin marketing Xinhua surgical instruments that meet the criteria for class I medical devices under FDA rules, which do not require pre-market notification to FDA.
We have incurred significant losses since inception as a result of research and development and general and administrative expenses in support of our operations. We expect to continue to incur substantial losses over at least the next year as we complete our pre-clinical trials, apply for regulatory approvals of clinical trials, construct our laboratory and biomanufacturing facility and continue development of our technology. We will need to raise additional capital in the next 12 months to meet these operating expenses. See "Plan of Operation."
Our primary strategy is to develop, test and obtain regulatory approval for HIV-PV Vaccine I in China first and then in the United States and Japan. In May 2003, we purchased the right to use for fifty years approximately 2.8 acres of land in the Tianzhu Export Processing Zone, Shunyi District, Beijing, China to develop a laboratory and biomanufacturing facility in compliance with Good Manufacturing Practices, or GMP, regulations primarily for clinical trials of HIV-PV Vaccine I. Under Chinese law, there is no private ownership of land, and accordingly, we do not own this land. In July 2003, we engaged a contractor to design the GMP facility. As of December 15, 2005, we have completed the construction of the outside body of our laboratory and biomanufacturing facility. The approximate total cost of building and outfitting this facility is $3,000,000. As of December 29, 2005, we have paid all amounts owed.
After completion of pre-clinical animal testing through collaboration with Beijing Institute of Radiation Medicine, we intend to submit application for approval of clinical study to Beijing branch of SFDA. If we receive approval, we will conduct Phase I, II and III human clinical trials. If these clinical trials show that our vaccine is safe and effective, we will apply for a new drug approval certificate and approval for sale. We intend to conduct a phase IV clinical study after our vaccine is made available to the market.To date, we have not commenced clinical testing of this vaccine, nor has it been approved by the China State Food and Drug Administration or any other regulatory agency. Further, we have not received any revenues to date and, until we receive the necessary approvals from the SFDA or a similar regulatory authority located in Japan or the United States, we will not have any revenues.
On November 21, 2005, we entered into an exclusive distribution agreement with Xinhua Surgical Instruments Co, Ltd., located in Shandong, China. Under this agreement, we have been granted exclusive distribution rights for all Xinhua surgical instruments in the United States, which are subject to FDA approval. Our minimum turnover requirement begins in the second year in the amount of $50,000 and increases to $60,000 during the third year and increases 10% annually thereafter. We are responsible for advertising and marketing expenses in connection with distribution of Xinhua surgical instruments in the United States. Subject to minimum turnover requirements, our exclusivity rights in the United States will be extended unless we fail to fulfill the minimum turnover requirements. On December 6, 2005, we received confirmation from the FDA of our registration as a medical device establishment, which enables us to perform initial distributor and repackager operations. This confirmation is not FDA approval of any product or any of our activities. It is neither a license, nor a certification. We intend to begin marketing Xinhua surgical instruments that meet the criteria for class I medical devices under FDA rules, which do not require pre-market notification to FDA.
We have incurred significant losses since inception as a result of research and development and general and administrative expenses in support of our operations. We expect to continue to incur substantial losses over at least the next year as we complete our pre-clinical trials, apply for regulatory approvals of clinical trials, construct our laboratory and biomanufacturing facility and continue development of our technology. We will need to raise additional capital in the next 12 months to meet these operating expenses. See "Plan of Operation."
