Advanced Biomed Inc S-1/A, filed Jun 20, 2023

Advanced Biomed Inc. (ADVB)

S-1/A 2023-06-20

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Fang Liu, Esq. VCL Law LLP		William S. Rosenstadt, Esq. Mengyi “Jason” Ye, Esq.
1945 Old Gallows Road		Ortoli Rosenstadt LLP
Suite 630		366 Madison Avenue, 3rd Floor
Vienna, VA 22182		New York, NY 10017
Telephone: (703) 919-7285		Telephone: (212) 588-0022

Large Accelerated Filer ☐		Accelerated Filer ☐		Non-Accelerated Filer ☒		Smaller Reporting Company ☒
						Emerging Growth Company ☒

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 Hong Kong	100,000
October 26, 2022	Advanced Biomed Hong Kong	500,000
November 7, 2022	Advanced Biomed Taiwan	122,000
December 2, 2022	Advanced Biomed Hong Kong	110,000
December 14, 2022	Advanced Biomed Taiwan	85,000

	Per Share	Total⁽³⁾⁽⁴⁾
Public offering price	$	$
Underwriting discounts and commissions ⁽¹⁾⁽²⁾	$	$
Proceeds to us, before expenses⁽²⁾	$	$

	Page Number

Prospectus Summary	9
Risk Factors	23
Cautionary Note Regarding Forward-Looking Statements	55
Use of Proceeds	56
Dividend Policy	57
Capitalization	58
Dilution	59
Management’s Discussion and Analysis of Financial Conditions and Results of Operations	60
Business	71
Management	105
Security Ownership of Certain Beneficial Owners and Management	110
Description of Securities	111
Shares Eligible for Future Sale	112
Underwriting	116
Legal Matters	124
Experts	124
Enforceability of Civil Liabilities	124
Where You Can Find More Information	125
Index to Consolidated Financial Statements	F-1

	Flatness	Roughness	No Water leakage	Critical size compared with original design	Thickness
A⁺Pre Chip	ΔF < 0.1 mm	ΔR<1.5 um /mm²	Under 2 bar	within 5%	2 mm ±10%
AC-1000 Enrichment Chip	ΔF < 0.3 mm	ΔR < 1.5 um/mm²	Under 2 bar	within 5%	1.5 mm ±10%

	●	Nanjing Yitian Biotech Co., Ltd. established in January 2017 for future marketing and clinical-related business in the PRC;

	●	Beijing Yitian Jiarui Technology Co. Ltd. established in October 2017 for future marketing and clinical-related business in the PRC;

	●	Shanghai Sglcell Biotech Co., Ltd. established in April 2019 for clinical-related business in the PRC;

	●	Shandong Sglcell Medical Devices Co., Ltd. established in July 2021 for clinical-related business in the PRC; and

	·	Our subsidiary in Taiwan is subject to risks related to complying with Taiwan laws and regulations. See “Risk Factors – Risks Related to Doing Business in Taiwan –Advanced Biomed Taiwan is subject to restrictions on paying dividend or making other payments to us, which may restrict our ability to satisfy its liquidity requirements” on page 37; and “Taiwanese investors holding more than 10% of Advanced Biomed common stock will be subject to Taiwan regulations on investment or technical cooperation in China for its investment or technical cooperation in China” on page 38.

	·	The geopolitical tension between Taiwan and China that could negatively affect our business and hence the value of your investment. See “Risk Factors – Risks Related to Doing Business in Taiwan – We face economic and political risks associated with doing business in Taiwan, particularly due to the geopolitical tension between Taiwan and China that could negatively affect our business and hence the value of your investment” on page 37.

	·	The imposition of foreign exchange restrictions in Taiwan may have an adverse effect on foreign investors’ abilities to acquire securities of a Taiwan company, including the shares of our subsidiaries in Taiwan, or to repatriate the interest, dividends or sale proceeds from those securities. See “Risk Factors – Risks Related to Doing Business in Taiwan – The imposition of foreign exchange restrictions in Taiwan may have an adverse effect on foreign investors’ abilities to acquire securities of a Taiwan company, including the shares of our subsidiaries in Taiwan, or to repatriate the interest, dividends or sale proceeds from those securities” on page 38.

	·	“Common stock” prior to the completion of this offering refers to shares our common stock of par value US$0.001 per share;
	·	“Huangshan Sglcell” refers to Sglcell (Huangshan) Biotech Co., Ltd., a company incorporated in the People’s Republic of China and our wholly foreign owned entity 100% owned by Advanced Biomed HK;
	·	“Nanjing Yitian” refers to Nanjing Yitian Biotech Co., Ltd., a company incorporated in the People’s Republic of China and a wholly owned subsidiary by Shanghai Sglcell;

	·	“NMPA” refers to National Medical Products Administration, formerly known as China Food and Drug Administration;

	·	“NTD” or “NT$” refers to New Taiwan Dollar, the legal currency of Taiwan;

	·	“PRC Subsidiaries” refers to Beijing Yitian, Huangshan Sglcell, Nanjing Yitian, Shandong Sglcell and Shanghai Sglcell.

	·	“RMB” or “Renminbi” refers to the legal currency of the People’s Republic of China;

	·	“Shandong Sglcell” refers to Shandong Sglcell Medical Devices Co., Ltd. a company incorporated in the People’s Republic of China and a wholly-owned subsidiary by Shanghai Sglcell;

	·	“Shanghai Sglcell” refers to Shanghai Sglcell Biotech Co., Ltd., a company incorporated in the People’s Republic of China and our wholly foreign owned entity 100% owned by Advanced Biomed HK; and

	·	“Taiwan” refer to refers to Taiwan, Penghu, Kinmen, Matsu, and any other areas under the effective control of the government of Republic of China;

Shares of common stock to be offered:		[ ] shares of common stock

Offering price per share:		The purchase price for the common stock being sold in this offering is expected to be $[ ] per share of common stock.

Shares of common stock outstanding prior to this offering (1)		100,000,000 shares

Shares of common stock outstanding after this offering (1)(2)		[ ] shares

Lock-up agreement		We have agreed that, without the prior written consent of the underwriters, subject to certain exceptions, we will not, for a period of [ ] months after the date of the prospectus, sell, transfer or dispose of any common stock. All of our directors, officers, and shareholders holding more than 5% of our common stock as of the effective date of this prospectus, have agreed not to sell, transfer or dispose of any common stock for a period of six months from the date of the prospectus, subject to certain exceptions.

Proposed NASDAQ Capital Market symbol		We have applied to list our common stock on the NASDAQ Capital Market under the symbol “ADVB”.

Underwriter’s over-allotment option		We have granted the underwriters an option for 45 days from the date of this prospectus to purchase up to an additional [ ] shares of our common stock at the public offering price, less the underwriting discounts and commissions, to cover over-allotments, if any.

Underwriter warrants		Upon the closing of this offering, we will issue to the representative of the underwriters warrants entitling the representative of the underwriters to purchase 1% of the aggregate number of shares of common stock sold in this offering. The underwriter warrants are exercisable at any time and from time to time, in whole or in part, during the four and a half year period commencing six months following the date of commencement of sales of this offering, at a price per share equal to 150% of the per share offering price. For additional information, please refer to the “Underwriting” section beginning on page 109.

Use of proceeds		We estimate that we will receive net proceeds, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, of approximately $[ ] from this offering assuming no exercise of the underwriter’s warrants and completion of the offering. We intend to use the net proceeds of this offering as follows after we complete the remittance process:

		●	Approximately 80% for invitro diagnosis (IVD) clinical trials, chip design and development, upgrade and construction of facilities, and expansion to other markets;
		●	10% for marketing and sales; and
		●	10% for general working capital.

		See “Use of Proceeds.”

	For the years ended June 30,
	2022			2021
	US$			US$

Operating expenses:
Research and development expenses		(1,619,531	)		(1,734,620	)
General and administrative expenses		(754,840	)		(102,320	)
Impairment of intangible assets		(1,617,974	)		-
Total operating expenses		(3,992,345	)		(1,836,940	)

Other income (expense):
Interest income		243			28
Other expense, net		(35,620	)		(246	)
Total other expense, net		(35,377	)		(218	)

Income before tax expense		(4,027,722	)		(1,837,158	)
Income tax expense		-			-
Net loss		(4,027,722	)		(1,837,158	)

	For the nine-month periods ended March 31,
	2023			2022
	US$			US$

Operating expenses:
Research and development expenses		(895,011	)		(1,045,243	)
General and administrative expenses		(1,157,047	)		(246,606	)
Total operating expenses		(2,052,058	)		(1,291,849	)

Other income (expense):
Interest income		122			301
Other expense, net		(269	)		(37,300	)
Total other expense, net		(147	)		(36,999	)

Income before tax expense
Income tax expense		-			-
Net loss		(2,052,205	)		(1,328,848	)

	As of June 30,
	2022		2021
	US$		US$

Cash		4,783,864		65,922
Working capital		2,015,999		885,147
Total assets		6,713,499		1,006,373
Total liabilities		3,221,903		30,131
Total stockholders’ equity		3,491,596		976,242

	As of March 31, 2023		As of June 30, 2022
	US$		US$

Cash		2,529,498		4,783,864
Working capital		1,026,004		2,015,999
Total assets		4,416,783		6,713,499
Total liabilities		3,031,645		3,221,903
Total stockholders’ equity		2,385,138		3,491,596

	·	On June 29, 2022, Advanced Biomed made a $2.5 million capital contribution to Advanced Biomed Taiwan;

	·	On October 11, 2022, Advanced Biomed made a $86,000 capital contribution to Advanced Biomed Taiwan;

	·	On October 24, 2022, Advanced Biomed made a $100,000 capital contribution to Advanced Biomed Hong Kong;

	·	On October 26, 2022, Advanced Biomed made a $500,000 capital contribution to Advanced Biomed Hong Kong;

	·	On November 7, 2022, Advanced Biomed made a $122,000 capital contribution to Advanced Biomed Taiwan;

	·	On December 2, 2022, Advanced Biomed made a $110,000 capital contribution to Advanced Biomed Hong Kong;

	·	On December 14, 2022, Advanced Biomed made a $85,000 capital contribution to Advanced Biomed Taiwan;

	As of June 30, 2022
	Actual			Pro Forma Adjusted for this Offering
Cash	$	4,783,864		$
Long-term debt		-
Stockholders’ equity:
Common Stock, $0.00025 par value per share, 500,000,000 shares authorized; 99,000,000 shares issued and outstanding on an actual basis; [ ] shares of common stock issued and outstanding on a pro forma basis*		24,750
Additional paid-in capital		12,657,007
Accumulated deficits		(9,459,020	)
Accumulated other comprehensive income		268,859
Stockholders’ equity		3,491,596
Non-controlling interests		-
Total stockholders’ equity		3,491,596
Total capitalization	$	8,275,460		$

	As of March 31, 2023
	Actual			Pro Forma Adjusted for this Offering
Cash	$	2,529,498		$
Long-term debt		-
Stockholders’ equity:
Common Stock, $0.00025 par value per share, 500,000,000 shares authorized; 100,000,000 shares issued and outstanding on an actual basis; [ ] shares of common stock issued and outstanding on a pro forma basis*		25,000
Additional paid-in capital		13,656,757
Accumulated deficits		(11,511,225	)
Accumulated other comprehensive income		214,606
Stockholders’ equity		2,385,138
Non-controlling interests		-
Total stockholders’ equity		2,385,138
Total capitalization	$	4,914,636		$

	Offering without Over- allotment Option	Offering with Full Exercise of Over- allotment Option
Assumed public offering price per share	$	$
Net tangible book value per share as of June 30, 2022	$	$
Increase in pro forma net tangible book value per share attributable to price paid by new investors	$	$
Pro forma net tangible book value per share after this offering	$	$
Dilution in pro forma net tangible book value per share to new investors in this offering	$	$

	·	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.

	·	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 will 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.

	Years Ended June 30, 2022,
	2022			2021			Change
Operating expenses:		$			$			$
Research and development		(1,619,531	)		(1,734,620	)		115,089		7	%
General and administrative expenses		(754,840	)		(102,320	)		(652,520	)	(638	)%
Impairment of intangible assets		(1,617,974	)		-			(1,617,974	)	nm	%
Total operating expenses		(3,992,345	)		(1,836,940	)		(2,155,405	)	(117	)%

Interest income		243			28			215		nm	%
Other expense, net		(35,620	)		(246	)		35,374		nm	%

Net loss		(4,027,722	)		(1,837,158	)		(2,190,564	)	(119	)%

	Nine-month Periods Ended March 31
	2023			2022			Change
Operating expenses:		$			$			$
Research and development		(895,011	)		(1,045,243	)		150,332		14	%
General and administrative expenses		(1,157,047	)		(246,606	)		(910,441	)	(369	)%
Total operating expenses		(2,052,058	)		(1,291,849	)		(760,208	)	(59	)%

Interest income		122			301			(178)		nm	%
Other expense, net		(269	)		(37,300	)		37,876		nm	%

Net loss		(2,052,205	)		(1,328,848	)		(723,357	)	54	%

	June 30,			June 30,
	2022			2021			Change
Total current assets	$	5,005,711		$	913,497		$	4,092,214
Total current liabilities		(2,989,712	)		(28,350	)		(2,961,362	)
Net current assets	$	2,015,999		$	885,147		$	1,130,852

	March 31,			June 30,
	2023			2022			Change
Total current assets	$	2,986,800		$	5,005,711		$	(2,018,911	)
Total current liabilities		(1,960,796	)		(2,989,712	)		1,028,916
Net current assets	$	1,026,004		$	2,015,999		$	(989,995	)

	Nine-month periods ended March 31,						Years ended June 30,
	2023			2022			2022			2021
		$			$			$			$

Cash and cash equivalents at beginning of the year/period		4,783,864			65,922			65,922			65,705

Net cash provided by/(used in) from operating activities		(3,137,745	)		788,948			(741,450	)		(473,975	)
Net cash used in investing activities		(62,368	)		(807,435	)		(1,083,684	)		(25,442	)
Net cash provided financing activities		1,000,000			-			6,097,131			697,164
Foreign currency effect		(54,253	)		241,661			445,945			(197,530	)

Net increase in cash and cash equivalents		(2,254,366	)		223,174			4,717,942			217

Cash and cash equivalents as at end of the year/period		2,254,366			289,096			4,783,864			65,922

Category		Estimated useful lives

Software		3 years
Patents		6 years

Category		Estimated useful lives

Lab equipment		3 to 5 years
Computer equipment		3 years
Furniture and fixtures		5 years
Leasehold improvements		3 years

Item		Domain Names
	1	advanbiomed.com
	2	sglcell.cn
	3	sglcell.net
	4	sglcell.com
	5	singlecellbiomed.com.cn
	6	singlecellbiomed.cn
	7	singlecellbiomed.com
	8	cell-biomed.com
	9	abi-cell.com
	10	abi-singlecell.com
	11	yitiancell.com

	As of March 31, 2023
	Number		% of Total Employees
Functions:
Technology, Research and Development		21		53	%
Medical Affairs		5		12	%
Operations and Quality Assurance		4		10	%
Sales and Marketing		4		10	%
General and Administration		6		15	%

Total number of employees		40		100.0	%

Name	Licenses and Approvals	PRC and Taiwan Regulatory Authority	Expiration Date
Advanced Biomed Taiwan	Business Registration Certificate	Tainan City Government	indefinite

Advanced Biomed HK	Certificate of Incorporation	Registrar of Companies, Hong Kong Special Administrative Region	indefinite