Advanced Biomed Inc.

Previous wording

The following discussion should be read in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Report and in our other Securities and Exchange Commission filings. The following discussion may contain predictions, estimates, and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this Report. These risks could cause our actual results to differ materially from any future performance suggested below.

Current wording

The following discussion should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes contained elsewhere in this Report and in our other Securities and Exchange Commission filings. The following discussion may contain predictions, estimates, and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this Report. These risks could cause our actual results to differ materially from any future performance suggested below.

Previous wording

For the years ended June 30, 2024 and 2023 and six-month periods ended December 31, 2024 and 2023, 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.

Current wording

For the years ended June 30, 2024 and 2023 and nine-month periods ended March 31, 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.

Previous wording

For the three-month periods and six-month periods ended December 31, 2024 and 2023, we incurred research and development expenses of $0.2 million, $0.2 million, $0.4 million, $0.4 million, respectively. The research and development expenses increased by approximately $0.05 million or 29% and $0.1 million or 19% mainly due to increase in clinical development activities during the three-month and six-month periods ended December 31, 2024.

Current wording

For the three-month periods and nine-month periods ended March 31, 2025 and 2024, we incurred research and development expenses of $0.3 million, $0.3 million, $0.7 million, $0.7 million, respectively. The research and development expenses decreased by approximately $0.06 million or 20% and increased by approximately $0.01 million or 1% mainly due to decrease in clinical development activities during the three-month periods ended March 31, 2025 and increase in clinical development activities during the nine-month periods ended March 31, 2025.

Previous wording

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, 2024 and 2023 and the three-month periods and six-months periods ended December 31, 2024 and 2023:

Current wording

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, 2024 and 2023 and the three-month periods and nine-months periods ended March 31, 2025 and 2024:

Previous wording

For the years ended June 30, 2024 and 2023, our general and administrative expenses amounted to $1.7 million and $1.7 million, respectively. The slight decrease in administrative expenses by approximately $0.03 million or 2% for the year ended June 30, 2024, is mainly attributable to the decrease in the travelling and entertainment expenses, legal and professional fees and property and related expenses which offset by the increase in staff costs, depreciation and amortization and miscellaneous expenses. For the three-month and six-month periods ended December 31, 2024 and 2023, our general and administrative expenses amounted to $0.3 million, $0.5 million, $0.6 million and $0.7 million, respectively. The decrease in administrative expenses by approximately $0.2 million or 39% and $0.1 million or 15%, respectively, for the three-month and six-month period ended December 31, 2024, is mainly attributable to the decrease in staff costs and miscellaneous expenses which partially offset by the increase in the depreciation and amortization and office suppliers and upkeep expenses.

Current wording

For the years ended June 30, 2024 and 2023, our general and administrative expenses amounted to $1.7 million and $1.7 million, respectively. The slight decrease in administrative expenses by approximately $0.03 million or 2% for the year ended June 30, 2024, is mainly attributable to the decrease in the travelling and entertainment expenses, legal and professional fees and property and related expenses which offset by the increase in staff costs, depreciation and amortization and miscellaneous expenses. For the three-month and nine-month periods ended March 31, 2025 and 2024, our general and administrative expenses amounted to $0.5 million, $0.4 million, $1.1 million and $1.2 million, respectively. The increase in administrative expenses by approximately $0.08 million or 19% for the three-month period ended March 31, 2025, is mainly attributable to the increase in professional fees. The decrease in administrative expenses by approximately $0.03 million or 3% for the nine-month period ended March 31, 2025, is mainly attributable to the decrease in staff costs.

Previous wording

For the three-months period ended December 31, 2024 and 2023, our other (expense) income, net amounted to $(0.4) million and $0.5 million respectively. The increase in other expense, net by approximately $0.9 million for the three-month period ended December 31, 2024, is mainly attributable to the exchange loss resulted from revaluation of the foreign currency balances of approximately $0.4 million for the three-month period ended December 31, 2024 as compared with exchange gain of $0.5 million recorded for the six-month period ended December 31, 2023.

Current wording

For the three-months period ended March 31, 2025 and 2024, our other (expense) income, net amounted to $(0.6) million and $(0.3) million respectively. The increase in other expense, net by approximately $0.3 million for the three-month period ended March 31, 2025, is mainly attributable to the exchange loss resulted from revaluation of the foreign currency balances of approximately $0.7 million for the three-month period ended March 31, 2025 as compared with exchange loss of $0.3 million recorded for the three-month period ended March 31, 2024.

Previous wording

For the six-month periods ended December 31, 2024 and 2023, our other (expense) income, net amounted to $(0.1) million and $0.2 million respectively. The increase in other expense, net by approximately $0.3 million for the six-month period ended December 31, 2024, is mainly attributable to the exchange loss resulted from revaluation of the foreign currency balances of approximately $0.1 million during the six-month period ended December 31, 2024 as compared with exchange gain of $0.2 million recorded for the six-month period ended December 31, 2023.

Current wording

For the nine-month periods ended March 31, 2025 and 2024, our other (expense) income, net amounted to $(0.8) million and $(0.2) million respectively. The increase in other expense, net by approximately $0.6 million for the nine-month period ended March 31, 2025, is mainly attributable to the exchange loss resulted from revaluation of the foreign currency balances of approximately $0.7 million during the nine-month period ended March 31, 2025 as compared with exchange loss of $0.1 million recorded for the nine-month period ended March 31, 2024.

Previous wording

Our loss from operations was $0.9 million and $0.1 million for the three-month periods ended December 31, 2024 and 2023 respectively. Our loss from operations was $1.2 million and $0.9 million for the six-month periods ended December 31, 2024 and 2023 respectively.

Current wording

Our loss from operations was $1.4 million and $1.1 million for the three-month periods ended March 31, 2025 and 2024 respectively. Our loss from operations was $2.6 million and $2.0 million for the nine-month periods ended March 31, 2025 and 2024 respectively.

Previous wording

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, 2024 and the six-month period ended December 31, 2024, the Company reported net loss of $2,782,278 and $1,173,484, respectively. As of June 30, 2024 and December 31, 2024, the Company’s working capital surplus (deficit) was $318,650 and $ (689,903) respectively. In addition, the Company had net cash outflows of $2,126,340 and $871,521 from operating activities for the financial year ended June 30, 2024 and the six-month period ended December 31, 2024. These conditions give rise to substantial doubt as to whether the Company will be able to continue as a going concern.

Current wording

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, 2024 and the nine-month period ended March 31, 2025, the Company reported net loss of $2,782,278 and $2,557,358, respectively. As of June 30, 2024 and March 31, 2025, the Company’s working capital surplus was $318,650 and $3,617,805 respectively. In addition, the Company had net cash outflows of $2,126,340 and $4,281,093 from operating activities for the financial year ended June 30, 2024 and the nine-month period ended March 31, 2025. These conditions give rise to substantial doubt as to whether the Company will be able to continue as a going concern.

Previous wording

Management has commenced a strategy to raise debt and equity. Our director and former Chief Executive Officer, Hung To Pau, Ph.D. paid the initial public offering costs and certain expenditures, amounted $1,233,764, on behalf of the Company and committed to the disbursement of the remaining initial public offering costs. Advanced Biomed Taiwan entered into an unsecured, interest-free loan with Yi Lu, our Chairman of the Board and current Chief Executive Officer, of NTD 3,578,212 (approximately $109,125) for general working capital in January 2023. As of December 31, 2024, the loan balance due to Yi Lu amounted to $109,125. Advanced Biomed Taiwan entered into ten unsecured, interest-free loans with Well Fancy Development Ltd amounting to NTD 2,967,700 (approximately $91,455), NTD 2,989,873 (approximately $92,138), NTD 4,270,200 (approximately $131,593), NTD 1,945,000 (approximately $59,938), NTD 1,858,120 (approximately $57,261), NTD 2,912,200 (approximately $89,744), NTD 2,890,065 (approximately $89,062), NTD 5,857,750 (approximately $180,516) and NTD 4,356,145 (approximately $134,242) and NTD 3,732,100 (approximately US$115,011) for general working capital in August 2022, April 2023, May 2023, June 2023, July 2023, August 2023, October 2023, December 2023, February 2024 and April 2024, respectively. As of June 30, 2024, the loan balance due to Well Fancy Development Ltd totally amounted to NTD 33,779,153 (approximately $1,040,960) and amounted to $545,900 for general working capital. Shanghai Sglcell Biotech Co., Ltd entered into five unsecured, interest-free loans to Shanghai Junfu Electronic Technology Co., Ltd. amounting to RMB500,000 (approximately US$68,500) in April 2023, May 2023, June 2023 and September 2023, respectively, and RMB700,000 (approximately US$95,900), RMB1,500,000 (approximately US$205,499), RMB700,000 (approximately US$95,900) and RMB650,000 (approximately US$89,050) in January 2024, March 2024, June 2024 and October 2024, respectively, for general working capital. As of December 31, 2024 and June 30, 2024, the loan balance due to Shanghai Sglcell Biotech Co., Ltd totally amounted to RMB5,550,000 (approximately US$760,347) and RMB4,900,000 (approximately to US$674,262), respectively.

Current wording

Management has commenced a strategy to raise debt and equity. Our director and former Chief Executive Officer, Hung To Pau, Ph.D. paid the initial public offering costs and certain expenditures, amounted $1,233,764, on behalf of the Company and committed to the disbursement of the remaining initial public offering costs. Advanced Biomed Taiwan entered into an unsecured, interest-free loan with Yi Lu, our Chairman of the Board and current Chief Executive Officer, of NTD 3,578,212 (approximately $107,810) for general working capital in January 2023. As of December 31, 2024, the loan balance due to Yi Lu amounted to $107,810. Advanced Biomed Taiwan entered into ten unsecured, interest-free loans with Well Fancy Development Ltd amounting to NTD 2,967,700 (approximately US$89,415), NTD 2,989,873 (approximately US$90,084), NTD 4,270,200 (approximately US$128,659), NTD 1,945,000 (approximately US$58,602), NTD 1,858,120 (approximately US$55,984), NTD 2,912,200 (approximately US$87,743), NTD 2,890,065 (approximately US$87,076), NTD 5,857,750 (approximately US$176,491), NTD 4,356,145 (approximately US$131,249) and NTD 3,732,100 (approximately US$112,447) for general working capital in August 2022, April 2023, May 2023, June 2023, July 2023, August 2023, October 2023, December 2023, February 2024 and April 2024, respectively. As of June 30, 2024, the loan balance due to Well Fancy Development Ltd totally amounted to NTD 33,779,153 (approximately $1,017,750) and amounted to $545,900 for general working capital. Shanghai Sglcell Biotech Co., Ltd entered into nine unsecured, interest-free loans to Shanghai Junfu Electronic Technology Co., Ltd. amounting to RMB500,000 (approximately US$68,902) in April 2023, May 2023, June 2023 and September 2023, respectively, and RMB700,000 (approximately US$96,462), RMB1,500,000 (approximately US$206,706), RMB700,000 (approximately US$96,462) and RMB650,000 (approximately US$89,572) in January 2024, March 2024, June 2024 and October 2024, respectively, for general working capital. As of December 31, 2024 and June 30, 2024, the loan balance due to Shanghai Sglcell Biotech Co., Ltd totally amounted to RMB5,550,000 (approximately US$764,810) and RMB4,900,000 (approximately to US$674,262), respectively.

Previous wording

Advanced Biomed Inc.(HK) entered into one unsecured, interest-free loan to Hung To Pau, Ph.D. amounting to US$200,000 for general working capital in July 2024. And Shanghai Sglcell Biotech Co., Ltd entered into three unsecured, interest-free loans to Hung To Pau, Ph.D. amounting to RMB122,566 (approximately US$16,792), RMB121,681 (approximately US$16,670) and RMB76,000 (approximately US$10,412) for general working capital in October 2024, November 2024 and December 2024. As of December 31, 2024, the loan balance due to Hung To Pau, Ph.D. totally amounted to US$200,000 and RMB320,247 (approximately US$43,874) for general working capital. In addition, Advanced Biomed Inc.(Taiwan) entered into four unsecured, interest-free loans to Well Fancy Development Ltd amounting to NTD 5,740,600 (approximately US$175,072), NTD 1,911,944 (approximately US$58,309), NTD 1,906,840 (approximately US$58,153) and NTD 3,121,500 (approximately US$95,196) for general working capital in July 2024, October 2024, November 2024 and December 2024. And Advanced Biomed Inc. entered into one unsecured, interest-free loan to Well Fancy Development Ltd amounting to US$119,975 for general working capital in November 2024. As of December 31, 2024, the loan balance due to Well Fancy Development Ltd totally amounted to NTD 12,680,884 (approximately US$386,730) and US$119,975 for general working capital.

Current wording

Advanced Biomed Inc.(HK) entered into one unsecured, interest-free loan to Hung To Pau, Ph.D. amounting to US$200,000 for general working capital in July 2024. And Shanghai Sglcell Biotech Co., Ltd entered into three unsecured, interest-free loans to Hung To Pau, Ph.D. amounting to RMB122,566 (approximately US$16,890), RMB121,681 (approximately US$16,768) and RMB76,000 (approximately US$10,473) for general working capital in October 2024, November 2024 and December 2024. As of March 31, 2025, the loan balance due to Hung To Pau, Ph.D. totally amounted to US$200,000 and RMB320,247 (approximately US$44,131) for general working capital. In addition, Advanced Biomed Inc.(Taiwan) entered into four unsecured, interest-free loans to Well Fancy Development Ltd amounting to NTD 5,740,600 (approximately US$172,962), NTD 1,911,944 (approximately US$57,606), NTD 1,906,840 (approximately US$57,452), NTD 3,121,500 (approximately US$94,049), NTD 1,798,060 (approximately US$54,175), NTD 1,291,552 (approximately US$38,914) and NTD 455,992 (approximately US$13,739) for general working capital in July 2024, October 2024, November 2024, December 2024, January 2025, February 2025 and March 2025. And Advanced Biomed Inc. entered into one unsecured, interest-free loan to Well Fancy Development Ltd amounting to US$119,975 and US$155,000 for general working capital in November 2024 and March 2025. As of March 31, 2025, the loan balance due to Well Fancy Development Ltd totally amounted to NTD 16,226,488 (approximately US$488,897) and US$274,975 for general working capital.

Previous wording

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 $2,657,235 as of December 31, 2024 will be sufficient to meet our research and development and operating expenditures for a minimum period of approximately 3 months until June 30, 2025 from the date of this report.

Current wording

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 $5,184,100 as of March 31, 2025 will be sufficient to meet our research and development and operating expenditures for a minimum period of twelve months from the date of this report.

Previous wording

As of December 31, 2024 and June 30, 2024, the Company’s working capital surplus and (deficit) was ($689,903) and $318,650. 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 4 months from the date of this prospectus, in the absence of unforeseen circumstances, taking into account the cash and financial resources presently available to us.

Current wording

As of March 31, 2025 and June 30, 2024, the Company’s working capital surplus was $3,617,805 and $318,650. 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 4 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.

Previous wording

The following table summarizes our cash flows for the six-month periods ended December 31, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the nine-month periods ended March 31, 2025 and 2024:

Previous wording

For the six-month period ended December 31, 2024, our net cash used in operating activities was approximately $0.9 million, which primarily reflected our net loss of approximately $1.1 million, as primarily adjusted by the (i) non-cash depreciation and amortization of approximately $0.2 million positively offset by (ii) increase in accounts payable, accrual and other current liabilities of approximately $0.06 million and negatively impacted by increase in prepaid expenses and other current assets of approximately $0.04 million.

Current wording

For the nine-month period ended March 31, 2025, our net cash used in operating activities was approximately $4.3 million, which primarily reflected our net loss of approximately $2.6 million, as primarily adjusted by the (i) non-cash depreciation and amortization of approximately $0.3 million positively offset by (ii) increase in accounts payable, accrual and other current liabilities of approximately $0.1 million and negatively impacted by increase in prepaid expenses and other current assets of approximately $2.1 million.

Previous wording

For the six-month period ended December 31, 2024, our net cash used in investing activities was approximately $0.01 million, primarily attributable to the purchase of equipment.

Current wording

For the nine-month period ended March 31, 2025, our net cash used in investing activities was approximately $0.01 million, primarily attributable to the purchase of equipment.

Previous wording

For the six-month period ended December 31, 2024, our Company recorded net cash generated from financing activities of approximately $0.8 million, which was mainly attributable to the certain expenditures paid on behalf by the related parties and loans from the related parties totalling of approximately $0.8 million.

Current wording

For the nine-month period ended March 31, 2025, our Company recorded net cash generated from financing activities of approximately $6.7 million, which was mainly attributable to the proceeds from issuance of shares of approximately $5.6 million and the certain expenditures paid on behalf by the related parties and loans from the related parties totalling of approximately $1.1 million.

Previous wording

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 prospectus, we believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.

Current wording

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 unaudited interim condensed 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.

Previous wording

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 prospectus reflect the more significant judgments and estimates used in preparation of our consolidated financial statements.

Current wording

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, assumptions used in assessing right of use assets, impairment of long-lived assets and uncertain tax position. 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 prospectus reflect the more significant judgments and estimates used in preparation of our consolidated financial statements.

Previous wording

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 December 31, 2024, cash balances of $2,641,164 and $16,071 were maintained at financial institutions in Taiwan and the PRC. PRC and Taiwan laws and regulations impose certain restrictions on our ability to transfer cash between countries and between our subsidiaries. See “Prospectus Summary — Transfers of Cash to and from Our Subsidiaries” for detailed discussions. Risk of loss is not expected by management. A hypothetical 10% change in average interest rates during 2024 would not have a material impact in annual interest income.

Current wording

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 March 31, 2025, cash balances of $2,995,245 and $1,974 were maintained at financial institutions in Taiwan and the PRC. PRC and Taiwan laws and regulations impose certain restrictions on our ability to transfer cash between countries and between our subsidiaries. See “Prospectus Summary — Transfers of Cash to and from Our Subsidiaries” for detailed discussions. Risk of loss is not expected by management. A hypothetical 10% change in average interest rates during 2024 would not have a material impact in annual interest income.

Previous wording

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 December 31, 2024 and June 30, 2024, except for the impairment loss on intangible assets recognized, no further impairment of long-lived assets was recognized.

Current wording

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 Mardh31, 2025 and June 30, 2024, except for the impairment loss on intangible assets recognized, no further impairment of long-lived assets was recognized.

Previous wording

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, 2024 and December 31,2024, bank and cash balances of $2.6 million and 2.7 million respectively were maintained at financial institutions in Taiwan and China, of which approximately $2.6 million and $2.7 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.

Current wording

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, 2024 and March 31,2025, bank and cash balances of $2.6 million and 3.0 million respectively were maintained at financial institutions in Taiwan and China, of which approximately $2.6 million and $3.0 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.