Annual Report for Fiscal Year Ending June 30, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Report. This discussion and analysis and other parts of this Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under "Risk Factors" and elsewhere in this Report. You should carefully read the "Risk Factors" section of this Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a holding company incorporated in the State of Nevada. We operate through Advanced Biomed Taiwan and Advanced Biomed HK. Advanced Biomed Taiwan is responsible for the main operation and the design and development of the company's primary technologies and products. Since our establishment in 2014, we have been focusing on the integration of multiple interdisciplinary technologies and established our own microfluidic technology platform. Utilizing the physical and molecular biological characteristics of tumor cells, we have developed various advanced and original research through the joint application of semiconductor technology and biotechnology. This includes complex precision structures, dielectric detection, functional microfluidic biochips, microfluidic integrated semiconductor sensors, related application modules, and key components of medical testing equipment. We have also developed a series of medical testing equipment and related products by integrating various functions of microfluidic modules, automation software, and hardware. Our technologies and products can be used for early screening and detection, diagnosis and staging, and treatment of cancer through the detection of circulating tumor cells and related tumor markers in blood samples, capture of single circulating tumor cells, and single-cell sorting and determination. These products provide assistance in treatment selection and patient prognosis intervention once the required licenses and approvals have been obtained. Advanced Biotech HK is our first localized operation company, mainly responsible for market operation and management in China, localized production, product registration, and future local market sales of our products in accordance with relevant local regulations in China. Our Shanghai subsidiary owns some of our R&D equipment and patents and will be responsible for operations related to clinical trials in Mainland China through CROs. In the future, we plan to also establish operation centers in countries and regions in North America and Europe.

Our devices, A⁺Pre, AC-1000, A⁺CellScan, and A⁺SCDrop, and three corresponding microfluidic biochips, A⁺Pre Chip and AC-1000 CTC Enrichment Chip and A⁺CellScan Chip, are designed to provide rapid and affordable assay products and services to cancer patients. Among them, A⁺Pre is mainly used to reduce the viscosity of blood samples, and AC-1000 is used to complete the separation and enrichment of circulating tumor cells ("CTCs") and tumor-related targeted cells in blood samples. The A⁺CellScan is mainly used for fluorescent labeling and automatic scanning judgment of targeted cells while A⁺SCDrop preserves the original viability of single cells.

A+PerfusC™ system, our latest development, is a compact, all in one perfusion-based 3D cell culture incubator engineered to replicate human physiological conditions to form 3D tumor spheroids/organoids in vitro. The system supports up to 12 days of continuous, hands-free culture, reducing the risk of human error and contamination. By maintaining uniform nutrient delivery and preventing waste accumulation, the platform promotes tumor spheroid and organoid formation, enhancing cell viability, growth, and drug response predictability.

Additionally, we have finished the research and development stage for four matching immunostaining kits, A⁺CTCE, A⁺CTCM, A⁺EMT and A⁺CM, and submitted registration applications in China. The immunostaining kit use antibodies combined with fluorescent groups of different colors to bind to specific proteins on the cell surface or inside the cells. The presence and intensity of fluorescent signals can be observed through a separate fluorescent imaging system, and the expression of the target protein and the cell type can be judged and determined accordingly. Different cell types can be distinguished using multiplexed combined staining with different antibodies. The A⁺CTCE kit is mainly used to identify epithelial circulating tumor cells, the A⁺CTCM kit is used to identify mesenchymal circulating tumor cells, the A⁺EMT kit is mainly used to identify epithelial-to-mesenchymal circulating tumor cells, and the A⁺CM kit is used to identify tumor-associated macrophages (cancer-associated macrophage-like cells).

We also developed a product for early screening of lung cancer, the A⁺LCGuard Lung Cancer Early Screening Kit ("A⁺LCGuard"), which is used to assist in the determination of benign and malignant pulmonary nodules. From August 2020 to September 2022, we finalized the research, design, and development of A⁺LCGuard. A⁺LCGuard is Class III medical devices and is required to conduct clinical trials before completing the registration process. We plan to begin A+LCGuard's clinical research in November 2025. Specifically, in June 2025, the Company and the CRO began collaborating on drafting the clinical research protocol and started preparing the necessary equipment, consumables, reagent kits, and other materials for the study. We expect that the clinical research protocol may pass ethical review and receive ethics committee approval by the end of October 2025. Thereafter, we plan to initiate the trial stage of the clinical research, with completion anticipated within six months of November 2025. We believe the results of the clinical research will inform the work plan for future large-scale clinical trials, minimizing waste from an excessively large sample size or insufficient statistical power due to a sample size that is too small. We recognize that the clinical research results may differ from expectations and may not support our expected progression to clinical trials. If so, we plan to promptly optimize the product, adjust participant group selection, and modify the final protocol for large-scale clinical trials. However, we cannot guarantee that any clinical research or trial will meet our anticipated outcomes. Furthermore, delays in obtaining ethical approval or recruiting participants could prevent the clinical research from being completed on schedule. Such delays could subsequently postpone the large-scale clinical trial and ultimately the product launch date.

All of our products must go through three steps to receive the required clearance from the NMPA before they can be sold to customers. The three steps are research and development, registration application, and registration review, which must be done in that order. At the registration application stage, we have to assemble all the required application materials, complete clinical trials (if required by NMPA), and work with an NMPA accredited third-party organization to examine our products in accordance with NMPA rules. NMPA will review our application during the registration review period and may request additional information before officially approving or denying our applications. Currently, A⁺Pre and AC-1000 and their corresponding chips have been cleared by the NMPA; A⁺SCDrop, A⁺CellScan, A⁺CellScan Chip, and A⁺LCGuard are at the registration application stage; the four matching immunostaining kits are under registration review. As of the date of this Report, we have not applied for similar clearances from other jurisdictions.

We participated in a scientific research project at Shanghai Pulmonary Hospital from July 17, 2019 to December 2021, and completed a total of 123 case studies to test A+Pre, AC-1000 and A⁺LCGuard. In the study, we selected 123 individuals, and among them, 75 were surgical patients with nodular changes or shadows in the lungs reported by imaging studies and 48 healthy patients without lung nodules reported by imaging studies. 7ml blood samples were taken from test subjects either before the clinical operation (for cancer patients) or after the physical examination (for healthy individuals), and A⁺Pre, AC-1000, and A⁺LCGuard kits were used to determine whether there were circulating tumor cells and other tumor markers in the blood samples. Finally, the pathological and physical examination results of the tested individuals were compared with the test results of our products. Our test results achieved 96% sensitivity and 99.9% specificity, which provides the research and development basis for our products. Specifically, A+Pre and AC-1000 were at the research and development stage, and we completed their effectiveness and performance indicators testing through this project. At the same time, A⁺LCGuard finished its feasibility and functional verification testing. All three products were tested together throughout the entire project.

All of our products must be approved by applicable regulatory authorities before being sold to customers. A⁺Pre and A⁺CellScan can work with third-party products to achieve their designed objectives. AC-1000 and A⁺SCDrop may be used together with other devices according to different application scenarios below. For the A⁺LCGuard early screening kit, it has to be used in combination with A⁺Pre and AC-1000. Our four staining kits, A⁺CTCE, A⁺CM, A⁺CTCM, and A⁺EMT, can be used independently or with third-party products. A⁺Pre, AC-1000, and A⁺CellScan require the use of our supporting microfluidic chips.

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For the analysis of high-viscosity blood samples: A+Pre can be independently used for pretreatment, retaining the original cell activity while preventing blood samples from clogging the equipment pipeline after entering the detection equipment.

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For the identification and counting application of circulating tumor cells: blood samples are diluted with A+Pre, and then AC-1000 is used to separate and enrich circulating tumor cells and related tumor markers. The enriched samples are stained, calibrated, and finally identified and counted. We can provide this service to the public if using third-party staining reagents already on the market in China. However, we plan to officially roll out this service once our in-house developed staining reagents, A+CTCE, A+CTCM, A+EMT and A+CM, complete the registration process. The identification and counting of circulating tumor cells and related tumor marker cells can provide auxiliary references for relevant clinical applications.

●

The capture of circulating tumor cells: we follow the same process as the identification of circulating tumor cells to obtain enriched samples with A+Pre and AC-1000, and then the samples are captured and separated by A+SCDrop to isolate single circulating tumor cells. This service can provide tumor cells with high purity and high activity.

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For early screening of lung cancer: peripheral blood samples of the subjects are first obtained, and the target cells are enriched and captured sequentially by A+Pre and AC-1000. After that, A+LCGuard performs cell fluorescence staining on the enriched samples to determine the number of targeted cells, and finally makes a judgment.

Due to the different regulatory requirements for the marketing of medical device products and in-vitro diagnostics ("IVD") products in various regions/countries, it is necessary to complete the registration application and obtain the corresponding license in accordance with the local regulations before engaging in commercial activities in the respective regions/countries ("localization registration"). Afterward, marketing and sales can be carried out. We follow the principle of modularization when design and develop all of our products and equipment so that products and equipment can be produced locally to meet different regulatory requirements. Based on the current development of the early tumor screening and preventive treatment industry and the characteristics of the products we are planning to register and apply in the future, we have adopted the operation model of centralized research and development and localized management. We have started the registration process with the NMPA in China for all of our products. Later on, the Company may establish subsidiaries in the United States and Europe to produce products and carry out product registration. To achieve that, our products must be cleared by the United States Food and Drug Administration and go through the conformity assessment process to obtain the Conformite Europeenne marking ("CE marking") from competent authority in each European Union member state.

We are looking for suitable locations in the states of California and Washington for our planned expansion to the North America market. We aim to complete site selection and personnel recruitment in the United States in January 2026 and start product registration, testing and production afterward. Our US subsidiary will be responsible for the production and registration of our equipment and related products in the US. Production, testing, and clinical trials in our US market will be conducted in accordance with US regulations, and clinical data from trials conducted in China will not be used to establish product standards. In addition, we plan to break into the European market in January 2026 and conduct localized management and operations in accordance with European regulations. In 2026, we plan to also start the localized registration of our IVD products in Europe. As of the date of this Report, we have not conducted any clinical trials for our products.

However, as of the date of this Report, we have not commenced sales of our products nor have any revenue-generating products and do not expect sales of revenue-generating product candidates until we have completed clinical development, submitted regulatory filings, and received applicable regulatory approvals for candidate products. Due to differences in regulatory and clinical registration requirements, we may not be able to obtain device and product approvals or provide product service on time. We expect to be in a state of continuous loss for the next two to three years.

Results of Operations

For the years ended June 30, 2025 and 2024, the Company conducted its business through Advanced Biomed Taiwan and Shanghai Sglcell's subsidiaries as research and development centers for technology research and product development.

Comparison of Results of Operations for the Fiscal Years Ended June 30, 2025 and 2024

		Years Ended June 30,
		2025				2024				Change
Operating expenses:		$				$				$
Research and development			(909,771	)			(880,193	)			(29,578	)			3	%
General and administrative expenses			(2,111,265	)			(1,661,379	)			(449,886	)			27	%
Total operating expenses			(3,021,036	)			(2,541,572	)			(479,464	)			19	%
Interest income			24,915				53,495				(28,580	)			(53	)%
Other expense, net			(262,848	)			(294,201	)			31,353				(11	)%
Loss before tax expense			(3,258,969	)			(2,782,278	)			(476,691	)			17	%
Income tax expense			-				-				-				nm	%
Net Loss			(3,258,969	)			(2,782,278	)			(476,691	)			17	%

Since our inception, we do not have any products approved for sale, we have not generated any revenue from the sale of products, and we do not expect to generate revenue from the sale of our product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever. Our main activities through June 30, 2025 have been re-organizational and capital raising activities and the research and development of three automated devices A⁺Pre, AC-1000 and A⁺SCDrop.

Our research and development expenses are primarily related to research and development of microfluidic biochip technology and its application in precision medicine in the field of oncology, including early cancer screening and detection, diagnosis and staging, treatment selection, and patient prognosis.

For the years ended June 30, 2025 and 2024, we incurred research and development expenses of $910 thousand and $880 thousand, respectively. The research and development expenses slight increased by approximately $30 thousand or 3% for the year ended June 30, 2025 mainly due to increase in clinical development activities. We plan to begin the clinical research for A⁺LCGuard in November 2025, and we anticipate the clinical research will end in May 2026.

Our general and administrative expenses primarily consist of (i) staff cost; (ii) depreciation and amortization; (iii) office supplies and upkeep expenses; (iv) travelling and entertainment; (v) legal and professional fees; (vi) property and related expenses; and (vii) miscellaneous expenses. The following table sets forth the breakdown of our general and administrative expenses for the years ended June 30, 2025 and 2024:

		Years Ended June 30,
		2025				2024				Change
		$				$				$
Staff costs			503,788				761,257				(257,469	)			(34	)%
Depreciation and amortization			343,830				399,602				(55,772	)			(14	)%
Travelling and entertainment			37,955				18,843				19,112				101	%
Legal and professional fees			1,003,489				350,000				653,489				187	%
Property and related expenses			26,703				73,853				(47,150	)			(64	)%
Office supplies and upkeep expenses			110,386				11,443				98,984				196	%
Miscellaneous expenses			85,114				46,381				38,733				84	%
			2,111,265				1,661,379				449,886				27	%

For the years ended June 30, 2025 and 2024, our general and administrative expenses amounted to $2.1 million and $1.7 million, respectively. The increase in administrative expenses by approximately $0.4 million or 27% for the year ended June 30, 2025, is mainly attributable to the decrease in the staff costs, depreciation and amortization, and property and related expenses which offset by the increase in travelling and entertainment expenses, legal and professional fees, office supplies and upkeep expenses and miscellaneous expenses.

For the years ended June 30, 2025 and 2024, our other expense, net amounted to $(0.3) million and $(0.3) million, respectively. There's no significant change from the year ended June 30, 2024 to 2025.

Net Loss for the Year

As a result of the foregoing, our net loss for the year ended June 30, 2025 was $3.3 million, compared to a loss from operations of $2.8 million for the year ended June 30, 2024.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Liquidity and Capital Resources

Our liquidity and working capital requirements are primarily related to our research and development and operating expenses. Historically, we have met our working capital and other liquidity requirements primarily through a combination of cash generated from stockholders' advances to the company. Going forward, we expect to fund our working capital and other liquidity requirements from various sources, including but not limited to cash generated from our operations, loans from banking facilities, the net proceeds from the Initial Public Offering and other equity and debt financings as and when appropriate.

The Company's ability to continue as a going concern depends upon its ability to develop, register and obtain regulatory approval for commercial sell of its products to generate positive operating cash flows. For the financial year ended June 30, 2025 and 2024, the Company reported net loss of $3,258,969 and $2,782,278, respectively. As of June 30, 2025 and 2024, the Company's working capital surplus was $3,143,443 and $318,650 respectively. In addition, the Company had net cash outflows of $5,825,055 and $2,126,340 from operating activities for the financial year ended June 30, 2025 and 2024, respectively. These conditions give rise to substantial doubt as to whether the Company will be able to continue as a going concern.

As circumstances warrant and to sustain its ability to support the Company's operating activities, the Company may consider supplementing its available sources of funds through the following sources:

	●	raise additional capital; and
	●	cash generated from upcoming operations; and
	●	financial support from the Company's related party and stockholders as well as third parties.

Management has commenced strategies to raise debts from related parties and stockholders and equity. The Company certain related parties have waived off the amount due to them as of June 30, 2024 amounted to $2,820,624 in order to improve the Company's working capital. The Company completed its initial public offering in 2025. In the initial public offering, the Company issued 1,640,000 shares of common stock at a price of US$4.00 per share. The Company received gross proceeds in the amount of US$6.56 million before deducting any underwriting discounts or expenses.

On June 6, 2025, the Company entered into a purchase agreement (the "ELOC Agreement") with HELENA GLOBAL INVESTMENT OPPORTUNITIES I LTD. (the "Investor" or "Selling Stockholder"), pursuant to which the Company have the right to issue and sell to the Investor, from time to time as provided therein, and the Investor is obligated to purchase from us, up to Twenty-Five Million United States Dollars ($25,000,000) of the Company's Common Stock, subject to terms and conditions set forth in the ELOC Agreement.

While we acknowledge that unforeseen circumstances or changes in market conditions could impact our liquidity, we remain committed to monitoring our financial health and will take necessary actions to secure additional financing if needed. In the event of unforeseen circumstances that disrupt the above-mentioned financial projection and strategies, the Company believes that our existing cash $2,903,915 as of June 30, 2025 will be sufficient to meet our research and development and operating expenditures for a minimum period of approximately twelve months from the date of this Report.

However, there can be no certainty that these additional financings will be available on acceptable terms or at all. If management is unable to execute this plan, there would likely be a material adverse effect on the Company's business. All of these factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements for the financial years ended June 30, 2025 and 2024 have been prepared on a going concern basis and do not include any adjustments to reflect the possible future effects on the recoverability and classifications of assets or the amounts and classifications of liabilities that may result from the inability of the Company to continue as a going concern.

Material Cash Requirements

Our cash requirements consist primarily of day-to-day operating expenses, research and development expenses, capital expenditures and contractual obligations with respect to facility leases and other operating leases. We lease our R&D center and office. We expect to make future payments on existing leases from cash generated from operations.

We had the following contractual obligations and lease commitments as of June 30, 2025:

Contractual Obligations		Total				Less than 1 year				1-3 years				3-5 years				More than 5 years
Operating lease commitment			41,690				35,811				5,879				-				-
Total obligations			41,690				35,811				5,879				-				-

Working Capital

		June 30,				June 30,
		2025				2024				Change
Total current assets		$	6,032,571			$	3,051,110			$	2,981,461
Total current liabilities			(2,889,128	)			(2,732,460	)			(156,668	)
Net current assets		$	3,143,443			$	318,650			$	2,824,793

As of June 30, 2025 and 2024, the Company's working capital surplus was $3,143,443 and $318,650, respectively. Management has commenced a strategy to raise debt and equity, including financial supports from the Company's related party and stockholders as well as third parties, which will enable that we have sufficient working capital for our requirements for at least the next two months from the date of this Report, in the absence of unforeseen circumstances, taking into account the cash and financial resources presently available to us.

Cash flows

The following table summarizes our cash flows for the fiscal years ended June 30, 2025 and 2024:

		Years ended June 30,
		2025				2024
		$				$
Cash at beginning of the year			2,607,973				2,622,279
Net cash used in operating activities			(5,825,055	)			(2,126,340	)
Net cash used in investing activities			(31,650	)			(74,110	)
Net cash provided by financing activities			5,934,301				1,866,820
Foreign currency effect			218,346				319,324
Net increase (decrease) in cash			295,942				(14,306	)
Cash at end of the year			2,903,915				2,607,973

Cash Flow from Operating Activities

During the years ended June 30, 2025 and 2024, the operating activities were primarily comprised the research and development activities, staff costs and administrative expenses.

Our net cash used in operating activities primarily reflected our net loss, as adjusted for non-operating items, such as non-cash depreciation and amortization and effects of changes in working capital such as decrease in prepaid expenses and other current assets and increase or decrease in accounts payables, accruals and other current liabilities.

For the year ended June 30, 2025, our net cash used in operating activities was approximately $5.8 million, which primarily reflected our net loss of approximately $3.3 million, as primarily adjusted by the (i) non-cash depreciation and amortization of approximately $0.3 million, positively offset by (ii) increase in prepaid expenses and other current assets of approximately $2.7 million.

For the year ended June 30, 2024, our net cash used in operating activities was approximately $2.1 million, which primarily reflected our net loss of approximately $2.8 million, as primarily adjusted by the (i) non-cash depreciation and amortization of approximately $0.4 million positively offset by (ii) increase in accounts payable, accrual and other current liabilities of approximately $0.5 million and negatively impacted by increase in prepaid expenses and other current assets of approximately $0.3 million.

Cash Flow from Investing Activities

Our cash flows used in investing activities primarily consisted of (i) the purchase of intangible assets; (ii) the purchase of equipment, furniture and fixtures and leasehold improvements; and (iii) acquisition of assets of the subsidiaries.

For the year ended June 30, 2025, our net cash used in investing activities was approximately $0.03 million, primarily attributable to the purchase of equipment.

For the year ended June 30, 2024, our net cash used in investing activities was approximately $0.08 million, primarily attributable to the purchase of equipment.

Cash Flow from Financing Activities

Our cash flows from financing activities primarily consists of proceeds from issuance of shares.

For the year ended June 30, 2025, our Company recorded net cash generated from financing activities of approximately $5.9 million, which was mainly attributable to the proceeds from issuance of shares of approximately $5.5 million.

For the year ended June 30, 2024, our Company recorded net cash generated from financing activities of approximately $1.9 million, which was mainly attributable to the initial public offering costs and certain expenditures paid on behalf by the related parties and loans from the related parties totaling approximately $1.9 million.

Critical Accounting Policies and Estimates

Our financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management's difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. While our significant accounting policies are more fully described in Note 3 to the consolidated financial statements included elsewhere in this Report, we believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.

We are an "emerging growth company" as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. We have elected to take advantage of the extended transition period for complying with new or revised accounting standards and acknowledge such election is irrevocable pursuant to Section 107 of the JOBS Act. As a result of our election, our financial statements may not be comparable to those of companies that comply with public company effective dates.

Use of Estimates and Assumptions

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience, when available, and on other various assumptions that are believed to be reasonable under the circumstances. Actual results could differ significantly from those estimates under different assumptions and conditions. Significant accounting estimates reflected in our consolidated financial statements include the useful lives for equipment and intangible assets, fair value of financial instruments, assumptions used in assessing right of use assets, impairment of equipment and intangible assets. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from these estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this Report reflect the more significant judgments and estimates used in preparation of our consolidated financial statements.

The following accounting policies are significant to the preparation of our consolidated financial statements. The areas involving a higher degree of judgement or complexity, or areas where estimates and assumptions are significant to the financial statements are disclosed in Critical, Accounting Judgements and Key Sources of Estimation Uncertainty.

Intangible assets, net

The Company's intangible assets are stated at cost less accumulated amortization and impairment, if any, and amortized on a straight-line basis over the estimated useful lives of the assets. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

Category		Estimated useful lives
Software		3 years
Patents		6 years

Software represents purchased software and is amortized straight-line over the Company's estimates to generate economic benefits from such software, generally three years.

Patents represent the estimated fair value assigned to finite-lived intangible assets acquired in a transaction that is accounted for as an acquisition of assets rather than a business combination are initially recognized in accordance with other application GAAP. Any consideration transferred in excess of the fair value of the assets acquired is allocated to each asset acquired on a relative fair value basis. Amortization is computed using the straight-line method over the estimated useful lives of the respective finite-lived intangible assets, generally six years. Intangible assets are reviewed for impairment at least annually or more frequently if indicators of potential impairment exist. The Company reviews finite-lived intangible assets for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. The Company had previously recognized an impairment loss on certain intangible assets in prior years. The remaining intangible assets were assessed for impairment as of the balance sheet date, and management concluded that no further impairment was required.

Once an impairment is determined, the actual impairment recognized is the difference between the carrying amount and the fair value as estimated using one of the following approaches: income, cost and/or market. Assets which are to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

The carrying amount of a long-lived asset or asset group is considered impaired when the anticipated undiscounted cash flows from such asset or asset group is less than its carrying amount. In that event, a loss is recorded in "Impairment of long-lived assets" on our Consolidated Statements of Operations and Comprehensive Income (Loss) based on the amount by which the carrying amount exceeds the fair value of the long-lived asset or asset group. Fair value, using the income approach, is determined primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Fair value, utilizing the cost approach, is determined based on the replacement cost of the asset reduced for, among other things, depreciation and obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount. As of June 30, 2025 and 2024, the Company had no remaining carrying amount of finite-lived intangible related to purchased patents from the acquisition of Shanghai Sglcell Biotech Co., Ltd. as the assets were fully impaired in 2022.

Equipment, net

Equipment, net are stated at cost less accumulated depreciation and impairment, if any, and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. The estimated useful lives are as follows:

Category		Estimated useful lives
Lab equipment		3 to 5 years
Computer equipment		3 to 5 years
Furniture and fixtures		5 to 5 years
Leasehold improvements		3 years

Expenditure for repair and maintenance costs, which do not materially extend the useful lives of the assets, are charged to expenses as incurred, whereas the expenditure for major renewals and betterment that substantially extends the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the costs, accumulated depreciation and impairment with any resulting gain or loss recognized in the consolidated statements of income. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

Cash

Cash consist of cash on hand, the Company's demand deposit placed with financial institutions, which have original maturities of less than three months and unrestricted as to withdrawal and use. Deposits are held at highly liquid and well capitalized financial institutions. As of June 30, 2025, cash balances of $2,836,037 and $14,306 were maintained at financial institutions in Taiwan and the PRC, respectively. PRC and Taiwan laws and regulations impose certain restrictions on our ability to transfer cash between countries and between our subsidiaries. ash may be transferred within our organization in the following manners: (i) Advanced Biomed may transfer funds to our subsidiaries, including our Shanghai subsidiary, by way of capital contributions or loans, through intermediate holding subsidiaries or otherwise; (ii) we and our intermediate holding subsidiaries may provide loans to our operating subsidiaries and vice versa; and (iii) our subsidiaries, including our Shanghai subsidiary, may make dividends or other distributions to us through intermediate holding companies or otherwise. As of the date of this Report, Advanced Biomed made fourteen capital contributions to Advanced Biomed Taiwan and Advanced Biomed HK to support their research and development.

Date				Receiving Entity		Amount (US$)
	June 29, 2022			Advanced Biomed Taiwan			2,500,000
	October 11, 2022			Advanced Biomed Taiwan			86,000
	October 24, 2022			Advanced Biomed HK			100,000
	October 26, 2022			Advanced Biomed HK			500,000
	November 7, 2022			Advanced Biomed Taiwan			122,000
	December 2, 2022			Advanced Biomed HK			110,000
	December 14, 2022			Advanced Biomed Taiwan			85,000
	October 10, 2023			Advanced Biomed HK			70,000
	December 5, 2023			Advanced Biomed HK			300,000
	April 9, 2024			Advanced Biomed HK			150,000
	November 22, 2024			Advanced Biomed HK			110,000
	March 13, 2025			Advanced Biomed HK			2,000,000
	March 20, 2025			Advanced Biomed Taiwan			500,000
	March 20, 2025			Advanced Biomed HK			550,000

Other than the transfers in the table above, we have not made any distribution of dividends or assets, cash transfers, capital contributions or loans among the holding company or any of our subsidiaries. Any loans from us or our holding subsidiaries outside of Mainland China to our Shanghai subsidiary, which is treated as a FIE under PRC law, are subject to PRC regulations and foreign exchange loan registrations. Such loans to our FIE subsidiary to finance its activities must be registered with the SAFE or its local counterparts. PRC laws, regulations and judicial interpretations thereof do not prohibit using cash generated from one subsidiary to fund another subsidiary's operations by way of short term interest free loans as long as they comply with relevant laws and procedures. In the future, cash proceeds raised from overseas financing activities, including any securities offerings, may be transferred by us to our Taiwan and Hong Kong subsidiaries and Shanghai subsidiary via capital contributions or shareholder loans. As of the date of this Report, Advanced Biomed has not made dividend or other distributions to our stockholders. Advanced Biomed may pay dividends to our stockholders subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the payment of such dividends. As a holding company, Advanced Biomed may rely on dividends and other distributions on equity paid by our subsidiaries for our cash and liquidity requirements, including payment of any debt we may incur outside of China and our expenses. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us. To the extent cash or assets in the business is in the PRC or the Shanghai subsidiary, the cash or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on our or our subsidiaries' ability by the PRC government to transfer cash or assets or distribute earnings within our group or to U.S. investors. PRC laws and regulations applicable to our Shanghai subsidiary permit payments of dividends only out of their retained earnings, if any, determined in accordance with applicable accounting standards and regulations. Our Shanghai subsidiary may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations. In addition, our subsidiaries are required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve funds, until the aggregate amount of such funds reaches 50% of its registered capital. At its discretion, a wholly foreign-owned enterprise may allocate a portion of its after-tax profits to discretionary funds. These reserve funds and discretionary funds are not distributable as cash dividends. Furthermore, dividends paid by our Shanghai subsidiary to its parent companies will be subject to a 10% withholding tax, which can be reduced to 5% if certain requirements are met. The PRC government also imposes restrictions on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. As such, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any, or transfer cash within our group, across border, or to U.S. investors. Additionally, current Taiwan regulations only permit our Taiwan subsidiary to pay dividends to its shareholders out of its accumulated profits, and Advanced Biomed Taiwan must set aside at least 10% of its accumulated profits each year and use it to make up previous losses, if any. The statutory reserve cannot be distributed as cash dividends. As of the date of this Report, no dividends, transfers, or distributions have been made within our group or to stockholders. We presently intend to retain all earnings to fund our operations and business expansions and have no plan to distribute earnings to stockholders. We do not anticipate paying dividends or other distributions to our stockholders, including U.S. investors, in the foreseeable future. See the relevant discussions in Risk Factors.

Risk of loss is not expected by management. A hypothetical 10% change in average interest rates during 2025 would not have a material impact in annual interest income.

Impairment of long-lived assets

Long-lived assets, including equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. We assess the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2025 and 2024, except for the impairment loss on intangible assets recognized, no further impairment of long-lived assets was recognized.

Once an impairment is determined, the actual impairment recognized is the difference between the carrying amount and the fair value as estimated using one of the following approaches: income, cost and/or market. Assets which are to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

The carrying amount of a long-lived asset or asset group is considered impaired when the anticipated undiscounted cash flows from such asset or asset group is less than its carrying amount. In that event, a loss is recorded in "Impairment of long-lived assets" on our Consolidated Statements of Operations and Comprehensive Income (Loss) based on the amount by which the carrying amount exceeds the fair value of the long-lived asset or asset group. Fair value, using the income approach, is determined primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Fair value, utilizing the cost approach, is determined based on the replacement cost of the asset reduced for, among other things, depreciation and obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount.

Operating leases

The Company adopted ASC 842 on July 1, 2020. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, operating lease liability, and operating lease liability, non-current in the Company's consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company's leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) for leases that have lease terms of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition requirements; and (ii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to July 1, 2020 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and(c) initial direct costs.

Fair Value Measurement

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follows:

●

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

●

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. The Company accounts for bank loans and lease payables at amortized cost and has elected NOT to account for them under the fair value hierarchy. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

As of June 30, 2025 and 2024, the carrying amount for cash and cash equivalents, trade accounts receivable (net of allowance for credit losses) and current liabilities (excluding the "Current portion of long-term debt and finance lease obligations") was equal to or approximated fair value due to their short-term nature or proximity to current market rates.

The fair values of private debt are based on, among other things, available trade information, and/or an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 10 for the fair value of our long-term debt.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist of cash on hand, the Company's demand deposit placed with financial institutions and other receivables. Bank and cash balances are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management. As of June 30, 2025 and 2024, bank and cash balances of $2.9 million and $2.6 million, respectively were maintained at financial institutions in Taiwan and China, of which approximately $2.9 million and $2.6 million, respectively, was subject to credit risk. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. The maximum exposure to credit risk is the carrying amounts of cash and bank balances presented on the consolidated statements of financial position.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company's policy is to ensure that it has sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.

Impact of Inflation

The types of inflationary pressures that affected the Company has primarily related to research and development costs, staff salaries and related costs. Inflation in Taiwan and China has not materially affected our profitability and operating results. However, we can provide no assurance that we will be unaffected by higher inflation rates in Taiwan and China or globally in the future.

Seasonality

We have not observed any significant seasonal trends. Our directors believe that there is no apparent seasonality factor affecting the industry that our Company is operating in.

Trend Information

Other than as disclosed elsewhere in this Report, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our profitability, liquidity, or capital resources, or that would cause reported financial information not necessarily indicative of future operating results or financial condition.

Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

We are not exposed to interest rate risk while we have no bank loans outstanding.

As of June 30, 2025 and 2024, bank and cash balances of approximately $2.9 million and $2.6 million, respectively, were maintained at financial institutions. A hypothetical 10% decrease in average interest rates during 2025 would not have a material impact in annual interest income.

Credit Risk

Credit risk is the potential financial loss to the Company resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Company, as and when they fall due. As the Company does not hold any collateral, the maximum exposure to credit risk is the carrying amounts of other receivables (exclude prepayments), financial instrument and cash presented on the consolidated statements of financial position. The Company has no other financial assets which carry significant exposure to credit risk.

Foreign Exchange Risk

Our reporting currency is the United States Dollar. The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of NT$ and RMB converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice. However, the Company assessed that a hypothetical 10% decrease in exchange rates during 2025 would not have a material impact in exchange gain/loss.

Critical, Accounting Judgements and Key Sources of Estimation Uncertainty

There are no critical judgements, apart from those involving estimation (see below) that the management has made in the process of applying the Group's accounting policy and that has the most significant effect on the amounts recognized in the financial statements.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are disclosed below:

Impairment of intangible assets

The Company reviews finite-lived intangible assets for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. Accounting standards require that if the sum of the future cash flows expected to result from a company's asset, undiscounted and without interest charges, is less than the reported value of the asset, an asset impairment must be recognized in the financial statements. The amount of impairment to recognize is calculated by subtracting the fair value of the asset from the reported value of the asset. As disclosed in note 6 to the consolidated financial statements for the years ended June 30, 2025 and 2024, the intangible asset related to acquired patents are carried forward through the acquisition of Shanghai Sglcell since the year ended June 30, 2022.

The Company believe that the accounting estimate related to asset impairment is a "critical accounting estimate" because: (1) it is susceptible to change from period to period because it requires company management to make assumptions about future sales and cost of sales over the life of the products arising from the patents acquired (generally six years); and (2) the impact that recognizing an impairment would have on the assets reported on our balance sheet as well as our net loss would be material. Management's assumptions about future sales prices and future sales volumes of the products arising from the patents acquired require significant judgment because actual sales prices and volumes have fluctuated in the past and are expected to continue to do so. Management has discussed the development and selection of this critical accounting estimate with our board of directors and the board has reviewed the Company's disclosure relating to it in this MD&A. In estimating future sales, we use our internal budgets. We develop our budgets based on estimated sales data for new products, planned timing of new product launches, customer commitments related to newly developed products.

The Company had previously recognized an impairment loss on certain intangible assets in prior years. The remaining intangible assets were assessed for impairment as of the balance sheet date, and management concluded that no further impairment was required.

The management has assessed that risk related to using different assumptions and analyze their sensitivity to change based on outcomes that are deemed reasonably likely to occur and concluded any change would not have affected our liquidity and capital resources with the impairment recognized as of June 30, 2025 and 2024.

Recent accounting pronouncements

In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." This amendment incorporates certain U.S. Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations. For entities subject to the SEC's existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company does not expect the adoption of ASU 2023-06 to have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to income Tax Disclosures. The amendment in this update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company has adopted ASU 2023-09 on July 1, 2024 and the adoption of the standard did not have a material impact to the overall financial presentation. See Note 10 for further information.

In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Award. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period. The Company believes the future adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02, "Codification Improvements - Amendments to Remove References to the Concepts Statements". This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These issues to remove references to various Concepts Statements and the amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. Early application of the amendments in this Update is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). The Company is currently evaluating the impact of adoption on the Company's related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). The ASU requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis including purchases of inventory, employee compensation, depreciation, and intangible asset amortization for each income statement line item that contains those expenses. ASU 2024-03, as clarified by ASU 2025-01 is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of adoption on the Company's related disclosures.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.