Advanced Biomed Inc. (ADVB) Risk Analysis

Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats. In particular, our Common Stock may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock price run-ups, may be unrelated to our actual or expected operating performance, financial condition or prospects. The market price of our Common Stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: - actual or anticipated fluctuations in our revenue and other operating results;- the sale of Resale Shares by the Selling Stockholder in the open market;- the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;- actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;- announcements by us or our competitors of significant services or features, technical innovations, acquisitions, strategic relationships, joint ventures, or capital commitments;- price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;- lawsuits threatened or filed against us; and - other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. - In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. In the event that we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business. Holders of our Common Stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Common Stock. As a result of this volatility, investors may experience losses on their investment in our Common Stock. Furthermore, the potential extreme volatility may confuse the public investors of the value of our stock, distort the market perception of our stock price and our company's financial performance and public image, negatively affect the long-term liquidity of our Common Stock, regardless of our actual or expected operating performance. If we encounter such volatility, including any rapid stock price increases and declines seemingly unrelated to our actual or expected operating performance and financial condition or prospects, it will likely make it difficult and confusing for prospective investors to assess the rapidly changing value of our Common Stock and understand the value thereof.

Although our securities are listed on the Nasdaq Capital Market, we cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market. In order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum stockholders' equity, minimum share price, and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting. On July 18, 2025, we received a written notice (the "Deficiency Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC notifying us that, for the last 32 consecutive business days, the bid price for our Common Stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the "Minimum Bid Price Requirement"). The Notice has no immediate effect on the listing or trading of our Common Stock, which will continue to trade on the Nasdaq Capital Market under the symbol "ADVB." In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided a compliance period of 180 calendar days, or until January 14, 2026 (the "Compliance Period"), to regain compliance with the Minimum Bid Price Requirement. We did not regain compliance with the Minimum Bid Price Requirement by the end of the Compliance Period and were not eligible for a second compliance period. On January 16, 2026, we received a letter from Nasdaq notifying us that our Common Stock would be subject to delisting unless we timely requested a hearing before the Nasdaq Hearings Panel (the "Panel"). We requested a hearing on January 21, 2026, which stayed the suspension of our Common Stock pending the Panel's decision. To regain compliance, we effected the Reverse Stock Split, which became effective on February 13, 2026, and our Common Stock began trading on a split-adjusted basis on February 20, 2026. On March 12, 2026, the Panel notified us that we had regained compliance with the Minimum Bid Price Requirement, and that we will be subject to a Panel monitor for a period of one year. If, during the monitor period, we fail to satisfy any continued listing requirement, we will not be permitted to provide Nasdaq with a plan of compliance, and Nasdaq will not be permitted to grant us additional time to regain compliance; instead, we would be issued a delist determination letter, and although we could request a new hearing, there can be no assurance that the Panel would grant us continued listing. In addition, under Nasdaq Listing Rule 5810(c)(3)(A)(iv), because we have effected a reverse stock split within the prior one-year period (and have effected reverse stock splits with a cumulative ratio of 100 shares or more to one over the prior two-year period, taking into account our 1-for-5 reverse stock split effected in October 2024 and the 1-for-20 Reverse Stock Split), if our Common Stock again fails to meet the Minimum Bid Price Requirement, we would not be eligible for any compliance period and Nasdaq would issue a delisting determination. We cannot assure you that the market price of our Common Stock will remain above $1.00 per share, and the Reverse Stock Split may reduce the liquidity of our Common Stock. If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including: - limited availability for market quotations for our securities;- reduced liquidity with respect to our securities;- a determination that our Common Stock is a "penny stock," which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Stock;- limited amount of news and analyst coverage; and - a decreased ability to issue additional securities or obtain additional financing in the future.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the continued listing of securities in Nasdaq, and Nasdaq may use such discretion to apply additional or more stringent criteria for the continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny continued listing or to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by the Public Company Accounting Oversight Board ("PCAOB"), an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company's audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company's listed securities. Nasdaq was concerned that the offering size was insufficient to establish the company's initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. stockholders, operations, or members of the board of directors or management. Our offering will be relatively small, and our company's insiders will hold a large portion of the company's listed securities. Nasdaq might apply the additional and more stringent criteria for our continued listing, which might cause delay or even denial of our continued listing.

If we issue additional shares of Common Stock, or securities convertible into or exchangeable or exercisable for Common Stock, our stockholders may experience dilution, and any such issuances may result in downward pressure on the price of our Common Stock. We also cannot assure you that we will be able to sell shares or other securities in any future offering at a price per share that is equal to or greater than the price per share paid by our existing stockholders, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

The market price of our stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: - actual or anticipated fluctuations in our revenue and other operating results;- the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;- actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;- announcements by us or our competitors of significant products, acquisitions, strategic partnerships, joint ventures, or capital commitments;- price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;- lawsuits threatened or filed against us; and - other events or factors, including those resulting from health pandemics, war or incidents of terrorism, or responses to these events. In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies.

As of October 13, 2026, Dr. Yi Lu "Stanley", our former Chairman and Chief Executive Officer, beneficially owned approximately 20.30% of our outstanding shares of Common Stock, and Dr. Xiaomin Chen, our Chairman and Chief Executive Officer, beneficially owned approximately 16.34% of our outstanding shares of Common Stock. As a result, each of Dr. Lu and Dr. Chen is able to exercise significant influence over all matters that require us to obtain stockholder approval, including the election of directors to our board and approval of significant corporate transactions that we may consider, such as a merger or sale of our company or its assets. This concentration of ownership in our shares by Dr. Lu and Dr. Chen will limit other stockholders' ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

Our Common Stock is currently listed on the Nasdaq Capital Market. We cannot predict whether investor interest in us will lead to the development of an active and liquid trading market. If an active trading market does not develop, holders of our shares of Common Stock may have difficulty selling our shares that may now be owned or may be purchased later. Even if an active trading market develops for our shares, the market price of our shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume of our shares may fluctuate and cause significant price variations to occur.

As a Nevada corporation, we are subject to provisions of the Nevada Revised Statutes ("NRS") that may have the effect of discouraging, delaying, or preventing a change of control that stockholders may consider favorable. In particular, Nevada's "business combination" statute (NRS 78.411-78.444) restricts certain transactions between a Nevada corporation and an "interested stockholder" (generally a person who owns 10% or more of the corporation's voting shares) for up to two years after the person becomes an interested stockholder, unless certain conditions are met. Nevada's "control share" statute (NRS 78.378-78.3793) also limits the voting rights of a person acquiring a "controlling interest" (generally 20% or more of a corporation's voting shares), unless approved by the disinterested stockholders. These statutes, and similar provisions in our articles of incorporation and bylaws, may make it more difficult for a third party to acquire control of us without the approval of our board of directors and may discourage potential takeover attempts that stockholders might consider in their best interests.

Provisions of our articles of incorporation, our bylaws, and Nevada law may have the effect of deterring unsolicited takeovers or delaying or preventing a change in control of our Company or changes in our management, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices. In addition, these provisions may limit the ability of stockholders to approve transactions that they may deem to be in their best interests. These provisions include: - the ability of stockholders to call special meetings only upon request of stockholders holding 80% of the shares entitled to vote at the meeting; and - the "business combinations" and "control share acquisitions" provisions of Nevada law (discussed below), to the extent applicable, could discourage attempts to acquire our stockholders' stock even on terms above the prevailing market price. The existence of the forgoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our Common Stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your Common Stock in an acquisition.

We are incorporated under the laws of the State of Nevada. Nevada law provides directors and officers with broader discretion in the discharge of their duties, and greater protection from liability, than directors and officers of corporations incorporated in many other states. Except in cases of intentional misconduct, fraud, or a knowing violation of law, Nevada law generally provides that directors and officers are not personally liable to the corporation or its stockholders. As a result, stockholders may have more limited rights to challenge actions of our directors and officers, even when they believe those actions are not in their best interests. This limitation on liability could reduce the likelihood of derivative litigation against our directors and officers and may discourage or prevent stockholders from bringing a lawsuit, even in instances where they believe that directors or officers have acted improperly.

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets. On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in "Restrictive Market", (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company's auditors. On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company's auditors for three consecutive years, the issuer's securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law. On March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of the Holding Foreign Companies Accountable Act. In the announcement, the SEC clarifies that before any issuer will have to comply with the interim final amendments, the SEC must implement a process for identifying covered issuers. The announcement also states that the SEC staff is actively assessing how best to implement the other requirements of the Holding Foreign Companies Accountable Act, including the identification process and the trading prohibition requirements. On June 22, 2021, the U.S. Senate passed the AHFCAA, which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two. On December 29, 2022, a legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act"), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to HFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two. On September 22, 2021, the PCAOB adopted a final rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining, as contemplated under the Holding Foreign Companies Accountable Act, whether the board of directors of a company is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. The final amendments are effective on January 10, 2022. The SEC will begin to identify and list Commission-Identified Issuers on its website shortly after registrants begin filing their annual reports for 2021. On December 16, 2021, PCAOB announced the PCAOB Holding Foreign Companies Accountable Act determinations (the "PCAOB determinations") relating to the PCAOB's inability to inspect or investigate completely registered public accounting firms headquartered in China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong. On August 26, 2022, PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the People's Republic of China governing inspections and investigations of audit firms based in Mainland China and Hong Kong. On December 15, 2022, the PCAOB announced in the 2022 Determination its determination that the PCAOB was able to secure complete access to inspect and investigate accounting firms headquartered in Mainland China and Hong Kong, and the PCAOB Board voted to vacate previous determinations to the contrary. Should the PCAOB again encounter impediments to inspections and investigations in Mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, including by the CSRC or the MOF, the PCAOB will make determinations under the HFCAA as and when appropriate. The inability of the PCAOB to conduct inspections of auditors in PRC makes it more difficult to evaluate the effectiveness of these accounting firm's audit procedures or quality control procedures as compared to auditors outside of PRC that are subject to the PCAOB inspections, which could cause investors and potential investors in our Common Stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. Our auditor WWC, P.C., the independent registered public accounting firm that issues the audit report included elsewhere in this Report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards Our auditor, WWC, P.C. is headquartered in San Mateo, California and has been inspected by the PCAOB on a regular basis, with the last inspection conducted in 2023. It is not subject to the determinations announced by the PCAOB on December 16, 2021 or the Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People's Republic of China on August 26, 2022. However, if the PCAOB is unable to inspect our accounting firm in the future, our Common Stock may be delisted from or prohibited from trading on a national securities exchange. The recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us since we are an emerging growth company and substantially all of our operations are conducted in Hong Kong. The Holding Foreign Companies Accountable Act, which requires that the PCAOB be permitted to inspect an issuer's public accounting firm within three years, may result in the delisting of our Company or prohibition of trading in our Common Stock in the future if the PCAOB is unable to inspect our accounting firm at such future time. Further, the AHFCAA which was later signed into law in the Consolidated Appropriations Act, reduces the period for foreign companies to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading, and this ultimately could result in our Common Stock being delisted by an exchange.