Risk Factors Dashboard

Investing in our securities involves a high degree of risk. Before making any investment decision, you should consider carefully the following risks and other information in this Report, including our consolidated financial statements and related notes. The risks and uncertainties we describe are not the only ones facing us. Additional risks and uncertainties that we are unaware of or that we believe are not material at the time could also materially adversely affect our business, financial condition or results of operations. In any case, the value of our Common Stock could decline, and you could lose all or part of your investment. Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Business and Industry

We recently transitioned our business strategy, and our future success is uncertain.

During our most recent fiscal year, we discontinued our biotechnology operations and redirected our resources toward the development of our artificial intelligence platform FinTruth. Because our continuing business differs significantly from our historical operations, investors have limited information regarding our ability to successfully execute this strategy.

The transition to an AI-focused business involves substantial risks, including developing a commercially viable platform, obtaining customer acceptance, competing against significantly larger companies, protecting proprietary technology, securing adequate financing, and generating sustainable revenues. There can be no assurance that our new business strategy will be successful. There can be no assurance that we will be able to obtain any sources of financing.

We have generated limited revenue from our AI-focused operations and may never achieve profitability.

Following the discontinuation of our biotechnology business, our continuing operations are focused primarily on developing our artificial intelligence platform FinTruth. We currently generate no significant revenue from these activities and expect that our future operating results will depend largely upon our ability to successfully commercialize our technology.

Commercialization may require substantial additional investments, strategic partnerships, customer adoption, regulatory compliance, and market acceptance, none of which can be assured.

We may rely on a limited number of third parties for marketing, distribution and revenue, and the loss of or underperformance by any of them could harm our business.

We may rely on financial IT companies, MaaS and AI distribution platforms, foundation-model providers and other strategic technology partners for indirect distribution. Depending on a small number of partners concentrates our risk. If any of these relationships ends, is not renewed on favorable terms or underperforms, or if a partner has financial, operational or reputational problems, our revenue, our sales pipeline and our ability to carry out our business plan could be materially and adversely affected.

We have recently transitioned our business to enterprise AI applications and have a limited operating history in this industry, which makes it difficult to evaluate our prospects.

We acquired Acellent in April 2026 and have since disposed of our biomedical operations and shifted our focus entirely to FinTruth, which is currently our sole product. As of the date of this Report, we have not generated any customer revenue from FinTruth, and our revenue relating to FinTruth has been derived solely from agency service fees. Our business plan depends on converting pilot and proof-of-concept engagements into commercial contracts, achieving our twelve-month deployment and hiring objectives, and developing recurring and usage-based enterprise revenue. We may not achieve these objectives on our anticipated timeline or at all, and our limited operating history in the AI industry makes it difficult to evaluate our business and future prospects.

The market for AI financial verification is new and evolving, and may not develop as we expect.

Our strategy is premised on the continued adoption of large language models and AI agents by financial institutions in credit analysis, investment research, risk assessment and compliance review, and on demand for independent verification of AI-generated output. If financial institutions slow or limit their adoption of AI, if foundation-model providers substantially reduce hallucination and other errors in their models, or if customers prefer to rely on manual review or internal tools, demand for FinTruth may be lower than we anticipate. Commercial banks, insurance companies and other regulated institutions also typically have lengthy procurement, security review and approval processes, which may delay or prevent sales.

The AI industry is intensely competitive and rapidly changing, and we may be unable to compete successfully against larger and better-funded competitors.

We face competition from foundation-model providers that may incorporate verification, citation and fact-checking functions directly into their models, from large technology, data and financial information companies, from financial IT companies, and from other AI start-ups. Many of these competitors have substantially greater financial, technical, data and marketing resources, larger customer bases and broader distribution than we do. Some of the same parties with whom we seek to collaborate, including foundation-model providers and financial IT platforms, may also compete with us. The rapid pace of innovation in AI may render our technology obsolete or require us to make significant investments to remain competitive, which we may be unable to fund.

Evolving laws and regulations relating to AI in the jurisdictions where we or our customers operate could increase our costs, restrict our services or reduce demand for FinTruth.

Governments in many jurisdictions, including the United States at the federal and state levels, the European Union and other markets, have adopted or are considering laws, regulations and guidance governing the development and use of AI, including requirements relating to transparency, explainability, risk management, human oversight, data governance and the use of AI in credit and other consequential decisions. Our customers in regulated financial services may be subject to such requirements and may in turn impose them on us. While increasing regulatory focus on the accountability and accuracy of AI is a driver of our business, new or inconsistent regulatory requirements could require us to change FinTruth, limit the use cases or jurisdictions we can serve, increase our compliance costs and expose us to liability.

We depend on third-party cloud providers, models and distribution partners, and any disruption in these relationships could harm our business.

We do not own any data centers, and the SaaS version of FinTruth runs on rented infrastructure from multiple international public cloud providers. We also rely, and expect to rely increasingly, on financial IT companies, MaaS and AI distribution platforms, foundation-model providers and marketing partners, to distribute and promote FinTruth. Interruptions, capacity constraints, price increases or changes in terms by our cloud providers, or the termination of or failure to perform by our distribution and marketing partners, could disrupt our services, increase our costs and impair our ability to grow our customer base.

We may be unable to attract and retain qualified AI and engineering talent.

Competition for personnel with expertise in AI research, algorithm engineering, data and knowledge engineering and financial domain knowledge is intense. Our AI research and algorithm engineering team currently consists of three full-time employees, and we intend to grow from twelve to approximately eighteen full-time employees under our twelve-month plan. The loss of any key personnel, or our inability to hire additional qualified personnel on acceptable terms, could delay the development of Smith RM and FinTruth and adversely affect our business.

We may be unable to adequately protect our proprietary technology and data, and we may be subject to claims that we infringe the intellectual property rights of others.

Our success depends in part on our proprietary technology and data assets, including Smith RM, our verification algorithms, our financial rules knowledge base and our proprietary datasets. We rely primarily on trade secret protection, confidentiality agreements and contractual restrictions to protect these assets, and these measures may not prevent unauthorized use, disclosure or reverse engineering of our technology, or the independent development of similar technology by our competitors. In addition, our datasets are derived in part from publicly available information, and the legal framework governing the use of such information, including for model training, remains unsettled in Hong Kong, the PRC and other jurisdictions. Third parties may claim that FinTruth, Smith RM or our datasets infringe or misappropriate their intellectual property or data rights. Any such claims, regardless of merit, could be costly to defend, divert the attention of our management, require us to pay damages or license fees, or require us to modify or cease offering portions of FinTruth.

Failure to attract and retain our senior management and other key employees could adversely affect our business.

Our future success is significantly dependent upon the continued service of our senior management, such as Dr. Xiaomin Chen, our chairman of the board of directors and chief executive officer, and our engineering teams. If we lose their services, we may not be able to locate suitable or qualified replacements, and we may incur additional expenses to recruit new senior management team members, which could severely disrupt our business and growth. In addition, if these personnel join our competitors or form a competing business, our business and prospects could be adversely affected.

FinTruth is a complex software, and undetected defects, errors, vulnerabilities or performance failures could harm our reputation, cause us to lose customers and expose us to liability.

FinTruth combines several parts: a data ingestion layer, the Smith RM reasoning core, a formal verification engine with numerical, logical, ontology and narrative verifiers, a financial rules knowledge base, and an output layer. It is delivered as a browser-based SaaS workspace, through APIs and as an on-premises deployment. Software this complex often contains defects, errors or vulnerabilities, particularly when new versions, verification modules or features are first released. These may be found only after our customers have used the product. Defects could cause FinTruth to process documents incorrectly, fail to extract numbers or claims, misclassify claims, produce inaccurate audit reports, or become unavailable. Correcting defects may require significant resources and may not be done in time. Any such problem could lead to lost or delayed market acceptance, loss of customers, warranty or indemnity claims, diversion of engineering resources and damage to our reputation.

On-premises deployments of FinTruth involve additional technical, support and security challenges.

When FinTruth is deployed on-premises, it runs on the customer’s own infrastructure and is subject to the customer’s security controls. Each customer environment may differ in hardware, operating systems, network setup and security policies. This can make implementation, configuration, testing, updates and technical support more difficult, slower and more expensive. Our client solutions and commercialization team, supported by our product and software engineering team, may not be able to support a growing number of on-premises deployments. We also have limited visibility into and control over customer environments. Performance problems or security incidents arising in those environments may be attributed to FinTruth even when we did not cause them, which could lead to disputes, liability or reputational harm. Deploying our software, including Smith RM, outside our own controlled environment may also increase the risk that it is copied, reverse engineered or misappropriated.

Cyberattacks, security breaches and other incidents affecting our systems or those of our third-party providers could disrupt our operations, compromise confidential information and subject us to significant liability.

Our business depends on the confidentiality, integrity and availability of our information technology systems and data. That includes the confidential financial reports, credit reports and other source documents our customers upload, our proprietary datasets, and the source code and model weights of Smith RM. Cyberattacks are becoming more frequent, sophisticated and severe, and they come from many types of attackers, including organized criminal groups, hacktivists and state-sponsored actors. Threats include ransomware, phishing and social engineering, denial-of-service attacks, credential theft, malware and exploitation of software vulnerabilities, including previously unknown (“zero-day”) vulnerabilities. Attackers are also increasingly using AI to make their attacks more effective. Companies that provide services to financial institutions may be especially attractive targets because of the value of the data they handle.

We use rented infrastructure from multiple international public cloud providers, as well as other third-party software and service providers. Our ability to monitor their security practices is limited, and an incident affecting any of them could affect us. Like other companies our size, we have limited resources to spend on cybersecurity, and our security measures may not detect or prevent every incident. A security incident could interrupt our services, cause loss, corruption or unauthorized disclosure of customer or proprietary data, and lead to theft of our intellectual property. It could also result in regulatory investigations and penalties, notification obligations, litigation, breach of contract claims, loss of customers and significant remediation costs. Any of these could materially and adversely affect our business, financial condition and results of operations. As a result, our business, financial condition and results of operations could be adversely affected.

Our financial-institution customers impose demanding security, data-handling and audit requirements, and our failure to satisfy them could prevent us from winning or keeping customers.

Our target customers include commercial banks, securities firms, insurance companies, asset managers and auditing firms. These customers are subject to extensive regulation of how they manage technology, outsourcing and third-party risk. Before buying from us, they typically conduct detailed security and vendor due diligence. They may also require contract terms on data protection, data location, business continuity, incident notification, audit rights, service levels and liability. Meeting these requirements may require us to get security certifications, put in place additional controls, pay for audits or accept increased liability. Doing so could be costly and lengthen our sales cycles. If we cannot meet these requirements, or if we breach them after signing a contract, we may lose customers, face contractual claims or be shut out of parts of our target market.

We are subject to SEC cybersecurity disclosure requirements, and a failure to identify, assess or timely disclose material cybersecurity incidents could expose us to regulatory action and litigation.

SEC rules require us to describe our processes for assessing, identifying and managing material cybersecurity risks, as well as our board’s oversight of those risks. They also require us to disclose a cybersecurity incident on Form 8-K within four business days after we determine that the incident is material. Deciding whether an incident is material can be complex and must be done quickly, often before all the facts are known. Making this assessment may be especially difficult for us because we have a lean operating structure and limited dedicated security personnel. Failure to comply with these regulations may affect our business, financial business conditions and prospects are materially and adversely affected. If we fail to assess or disclose incidents properly, or if our disclosure is later found to be inaccurate or incomplete, we could face SEC enforcement action, securities litigation and reputational harm. In addition, a public disclosure could itself reveal information that attackers or competitors could exploit.

Our insurance coverage may not be adequate to cover losses from cybersecurity incidents, technology failures or other operational events.

We may not have insurance that is sufficient for, or covers at all, losses from cybersecurity incidents, service interruptions, professional liability claims related to FinTruth’s outputs, or other operational events. Cyber and technology errors and omissions insurance may be unavailable on acceptable terms, may become more expensive, or may contain exclusions, deductibles and coverage limits that leave us responsible for a large part of any loss. Insurers may also deny coverage for particular claims. Losses that are uninsured or exceed our coverage could materially and adversely affect our financial condition.

We have a small workforce and depend on a limited number of key personnel, and our lean operating structure may not be sufficient to support our business as a public company.

After disposing of our biomedical operations, we have kept a lean, technology-focused operating structure. We currently have approximately twelve full-time employees, and our AI research and algorithm engineering team has three full-time employees. Because a few individuals hold critical knowledge of our reasoning core, our verification algorithms, our datasets and our customer relationships, losing any of them could seriously disrupt our development, implementation and commercialization activities. In addition, a small team may lack enough people to separate duties properly and to cover the operational, compliance, financial reporting and governance work required of a Nasdaq-listed company while we pursue our business plan. We may be unable to hire additional qualified personnel when we need them or on acceptable terms.

Business interruptions caused by natural disasters, public health events, geopolitical events, power or telecommunications failures or other events beyond our control could disrupt our operations.

Substantially all of our employees are based in Hong Kong, and our SaaS platform runs on third-party cloud infrastructure. Typhoons, floods, earthquakes, pandemics or other public health emergencies, social unrest, geopolitical tensions, terrorism, power outages, telecommunications failures or cloud service outages could disrupt our research and development, customer implementation and support, and the availability of FinTruth. Because our workforce is concentrated in one location, a single event could affect most of our operations. Our business continuity and disaster recovery plans may not work as intended, and we may not have enough insurance to cover resulting losses.

We will need substantial additional capital to fund our operations and business plan, which may not be available on acceptable terms or at all.

We expect to fund FinTruth’s continued operation and commercialization through a combination of operating revenues, proceeds from the sale of Advanced Biomed Inc. (Taiwan), and future capital-raising activities. Although we have received term sheets and engagement letters relating to potential financing transactions, none of these transactions may be completed. Our ability to raise capital may be affected by market conditions, our operating results, our status as a company with operations in Hong Kong, and regulatory developments affecting companies with operations in Hong Kong or the PRC. If we cannot obtain enough financing when we need it, we may have to delay, scale back or entirely stop our product development, hiring and commercialization efforts.

Cybersecurity Breaches and other Disruptions to our Information Technology Systems

The efficient operation of our business is dependent on our information technology systems to process, transmit and store sensitive electronic data, including employee, distributor and customer records, and to manage and support our business operations. The secure maintenance of this information is critical to our operations. Despite our security measures, our information technology system may be vulnerable to attacks by hackers or breaches due to errors or malfeasance by employees and others who have access to our system, or other disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters. Any such event could compromise our information technology systems, expose our customers, distributors and employees to risks of misuse of confidential information, impair our ability to effectively and timely operate our business, and cause other disruptions, which could result in legal claims or proceedings, disrupt our operations and the services we provide to customers, damage our reputation, and cause a loss of confidence in our products and services, any of which could adversely affect our results of operations and competitive position.

We may be subject to litigation and other claims and legal proceedings, and may not always be successful in defending ourselves against these claims or proceedings.

We may be subject to lawsuits and other claims in the ordinary course of our business. We may from time to time be subject to lawsuits and other legal proceedings brought by our customers, competitors, employees, business partners, investors, other shareholders of the companies we invest, or other entities against us in the ordinary course of our business. We may also be subject to regulatory proceedings in the ordinary course of our business. We may not be successful in defending ourselves, and the outcomes of these lawsuits and proceedings may be unfavorable to us. Lawsuits and regulatory proceedings against us may also generate negative publicity that significantly harms our reputation, which may adversely affect our customer base, market position and our relationships with our research partners and other business partners. In addition to the related costs, managing and defending litigation and other legal proceedings and related indemnity obligations can significantly divert our management’s attention from operating our business. We may also need to pay damages or settle lawsuits or other claims with a substantial amount of cash, negatively affecting our liquidity. As a result, our business, financial condition and results of operations could be adversely affected.

Risks Relating to Our Financial Prospects and Need for Additional Capital

We have recorded negative cash flows from operating activities historically and may have a current liabilities position in the future.

We have experienced significant cash outflow from operating activities since our inception. We had net cash outflow in operating activities from continuing operations of $0.96 million and $2.3 million for the years ended June 30, 2026 and 2025, respectively. We had net cash outflow in operating activities of $5.8 million and $2.1 million for the years ended June 30, 2025 and 2024, respectively. We had net cash outflow in operating activities from discontinued operations of $0.99 million to and $3.5 million for the years ended June 30, 2026 and 2025, respectively. We had net cash outflow in operating activities of $5.8 million and $2.1 million for the years ended June 30, 2025 and 2024, respectively. The cost of continuing operations could further reduce our cash position, and an increase in our net cash outflow from operating activities could adversely affect our operations by reducing the amount of cash available to meet the cash needs for operating our business and to fund our investments in our business expansion.

We had net current asset of $12.3 million as of June 30, 2026. We cannot guarantee that we will remain in a net current assets position in future, which would expose us to liquidity risk. Our future liquidity and ability to make additional capital investments necessary for our operations and business expansion will depend primarily on our ability to maintain sufficient cash and to obtain adequate external financing. There can be no assurance that we will be able to obtain any sources of financing.

We require substantial funding for our operations and have a limited operating history and limited revenue from FinTruth. If we cannot raise sufficient additional capital on acceptable terms, our business, financial condition and prospects may be adversely affected.

We require substantial capital to fund our existing operations, commercialize new products, expand our business and pursue strategic investments. In particular, we require substantial capital to:

Because we lack a significant operating history on AI, in particular Fintruth, you have no basis upon which to evaluate our ability to achieve our business objective. If we fail to complete our initial launch of FinTruth, we will never generate any operating revenues.

Further financing may not be available to us on acceptable terms, or at all. If we fail to raise capital as and when needed it would have a negative impact on our financial condition and our ability to pursue our business strategy. In addition, if we raise funds by issuing debt securities or incurring additional borrowings, the terms of debt securities issued or borrowings could impose significant restrictions on our operations, and we may be unable to repay the indebtedness when due. If we raise funds by issuing equity securities, your investment in our company could be diluted.

Raising additional capital may lead to dilution of shareholdings by our existing stockholders, restrict our operations, and may further result in fair value loss adversely affecting our financial results.

We may seek additional funding through a combination of equity and debt financings and collaborations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of existing holders of our shares will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our existing stockholders.

The incurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, and other operating restrictions that could adversely impact our ability to conduct our business.

Risks Related to Doing Business in Hong Kong and China

We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers.

While we are currently not subject to the laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection, there can be no assurance that such laws will continue to be inapplicable to us in the future as these laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particular with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.

Substantially all of our operations, personnel and research and development activities are located in Hong Kong, and changes in the political, economic and legal environment in Hong Kong or the PRC, including the possibility that the PRC government may intervene in or influence our operations, could materially and adversely affect our business.

We conduct our AI technology operations through Acellent, a Hong Kong company, and our research and development and engineering personnel are based solely in Hong Kong. Hong Kong is a Special Administrative Region of the PRC, and the PRC government has significant oversight and discretion over the conduct of business in Hong Kong. Although Hong Kong currently maintains a legal system separate from that of mainland China under the “one country, two systems” principle, there can be no assurance that this will continue. Laws such as the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region and the Safeguarding National Security Ordinance, as well as any future extension of mainland China laws and regulations to Hong Kong, could affect how we collect and process data, develop and deploy AI models, and serve customers. The PRC government may also intervene in or influence the operations of Hong Kong-based companies at any time, which could result in a material change in our operations and/or the value of our common stock, or significantly limit or completely hinder our ability to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 62 If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 62 If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

The PRC has adopted, and continues to adopt, an extensive and rapidly evolving body of laws regulating artificial intelligence, algorithms and generative AI, and if FinTruth or our activities become subject to these laws, compliance could be costly and failure to comply could subject us to penalties or force us to modify or suspend our services.

The PRC has implemented a series of AI-specific regulations, including the Provisions on the Administration of Algorithm Recommendation for Internet Information Services, the Provisions on the Administration of Deep Synthesis of Internet Information Services, the Interim Measures for the Management of Generative Artificial Intelligence Services and the Measures for Labeling Artificial Intelligence-Generated Synthetic Content. These rules impose, among other things, algorithm filing and security assessment requirements, content management and labeling obligations, requirements relating to the legality and quality of training data and protection of intellectual property and personal information, and obligations to prevent discrimination and the generation of false or harmful information. The PRC has also amended its Cybersecurity Law to address AI governance, and further comprehensive AI legislation has been under consideration.

Although we currently conduct our operations in Hong Kong, FinTruth processes Chinese-language reports, applies PRC Accounting Standards for Business Enterprises, and relies on datasets that include business registration and judicial information. If we provide FinTruth, its APIs or Smith RM to customers or users in mainland China, deploy FinTruth on-premises for customers in mainland China, or enter into integrated or bundled arrangements with foundation-model providers or financial IT platforms operating in mainland China, we or our partners may be required to complete algorithm filings, security assessments or other registrations, and to comply with content, labeling and data requirements that may be difficult or costly for us to satisfy. The interpretation and enforcement of these rules remain uncertain and are subject to significant regulatory discretion. Failure to comply could result in warnings, fines, suspension of services, removal of applications or other penalties, and could limit our ability to pursue customers in mainland China.

We may be subject to PRC laws on cybersecurity, data security, personal information protection and cross-border data transfers, which are complex and evolving.

The PRC Cybersecurity Law, Data Security Law and Personal Information Protection Law, together with implementing regulations such as the Measures for Cybersecurity Review and the Provisions on Promoting and Regulating Cross-Border Data Flows, regulate the collection, storage, use, processing and transfer of data, including “important data” and personal information. The Personal Information Protection Law may apply to processing outside mainland China of personal information of individuals in mainland China under certain circumstances, such as where the purpose is to provide products or services to such individuals or to analyze their behavior. Our proprietary financial datasets include information derived from listed-company financial reports, business registration and judicial information, and our customers may upload credit reports and other source documents that contain information about PRC companies and individuals. If such data are deemed to be subject to these laws, we could be required to obtain consents, conduct security assessments or certifications, or restrict cross-border transfers of data, including transfers to the international public cloud infrastructure on which our SaaS version of FinTruth is hosted. Any of these requirements could increase our compliance costs, limit our ability to use data for product development and model training, and expose us to investigations, fines or other sanctions. Any such proceedings and claims could result in significant costs to us and divert the time and attention of our management and technical personnel from the operation of our business.

We are subject to the Hong Kong Personal Data (Privacy) Ordinance and evolving Hong Kong guidance on the use of AI, and any failure to comply could harm our business and reputation.

We are subject to the Personal Data (Privacy) Ordinance (Cap. 486) of Hong Kong, which regulates the collection, holding, processing and use of personal data. The Office of the Privacy Commissioner for Personal Data has issued guidance on the use of AI, including the Artificial Intelligence: Model Personal Data Protection Framework, and has indicated that it expects organizations procuring, implementing and using AI systems to adopt risk-based governance and data minimization measures. Hong Kong financial regulators, including the Hong Kong Monetary Authority and the Securities and Futures Commission, have also issued guidance on the use of AI and generative AI by authorized institutions and licensed corporations, which our financial-institution customers may expect us to support through contractual commitments, audits and enhanced controls. In addition, the Hong Kong government has proposed amendments to copyright law relating to text and data mining. Changes in these laws and guidance, or in their interpretation or enforcement, could require us to modify FinTruth, our data practices or our training processes, and any actual or alleged failure to comply could result in enforcement action, contractual liability or reputational harm. If we resort to litigation to enforce or protect our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources, while the outcome would be unpredictable, and any remedy may be inadequate.

The PRC and Hong Kong legal systems embody uncertainties, particularly with respect to the regulation of emerging technologies such as AI, which could limit the legal protections available to us.

Laws and regulations governing AI in the PRC and Hong Kong are relatively new, are frequently issued in the form of interim measures or departmental rules, and leave substantial discretion to regulators. Enforcement may be inconsistent, and new rules may be applied with little advance notice or retroactively. In addition, the ownership of and protection afforded to AI models, training data and AI-generated content under PRC and Hong Kong law remain unsettled. As a result, we may be unable to predict our compliance obligations accurately, to enforce our rights in Smith RM, our datasets and our other technology and data assets, or to defend against claims, any of which could materially and adversely affect our business.

Export controls, sanctions and other restrictions on AI technology, semiconductors and cloud services imposed by the United States, the PRC or other jurisdictions could restrict our access to computing resources and models, and limit the markets in which we can operate.

The United States has imposed, and may continue to expand, export controls on advanced semiconductors, AI model weights and related technology, and has adopted rules restricting certain U.S. investments in AI and other technologies involving “countries of concern,” which include the PRC, Hong Kong and Macau. The PRC has adopted countermeasures and its own export control regime. Because we rely on rented infrastructure from international public cloud providers and FinTruth can be configured to work with third-party or open-source large language models, such restrictions could limit our access to computing capacity, models or software, increase our costs, restrict our ability to serve customers in certain jurisdictions or to enter into partnerships, and adversely affect our ability to raise capital from U.S. investors.

Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon our ability to operate profitably in the Mainland China and Hong Kong.

Since we conduct our operations through our subsidiary in Hong Kong, economic, political and legal developments in the PRC will affect our business, financial condition, results of operations and prospects. Policies, regulations, rules, and the enforcement of laws of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on material which can be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws that affect our ability to operate business in China.

The Chinese government may intervene in or influence our operations in the Mainland China or Hong Kong at any time or may exert more control over offerings conducted overseas and/or foreign investment in us, which could result in a material change in our operations and and/or the value of the securities we are registering for sale.

The Chinese government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations in the Mainland China or Hong Kong as the government deems appropriate to further regulatory, political and societal goals. The Chinese government has recently published new policies that significantly affected certain industries such as the education and Internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could require us to seek permission from Chinese authorities to commence to operate our business, which may adversely affect our business, financial condition and results of operations. Furthermore, recent statements made by the Chinese government have indicated an intent to increase the government’s oversight and control over offerings of companies with significant operations in China that are to be conducted in foreign markets, as well as foreign investment in PRC-based issuers. There is no guarantee that we will not be subject to such direct influence or intervention in the future due to changes in laws or other unforeseeable reasons. There is always a risk that the Chinese government may, in the future, seek to affect operations of any company with any level of operations in the Mainland China and Hong Kong. Any such action, once taken by the Chinese government, could cause the value of our Common Stock to significantly decline or become worthless. In addition, if we were to become subject to the direct intervention or influence of the PRC government at any time due to changes in laws or other unforeseeable reasons, it may require a material change in our operations and/or result in increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

We face risks arising from China including risks and uncertainties regarding the enforcement of laws and that rules and regulations in China can change quickly with little advance notice. The Chinese government may intervene or influence the operations Hong Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in the operations Hong Kong and/or the value of our Common Stock. The Chinese government may intervene or influence the operations of our subsidiaries in Shanghai and Hong Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in the operations of our subsidiaries in Shanghai and Hong Kong and/or the value of our Common Stock.

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in Hong Kong may be harmed by changes in laws and regulations in China, including those relating to securities regulation, data protection, cybersecurity and mergers and acquisitions and other matters. Our ability to operate in China through our subsidiaries in Shanghai and Hong Kong may be harmed by changes in laws and regulations in China, including those relating to securities regulation, data protection, cybersecurity and mergers and acquisitions and other matters. The PRC central or local governments may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our and our subsidiaries’ compliance with such regulations or interpretations.

Government actions in the future could significantly affect economic conditions in China or particular regions thereof, and could require us in Hong Kong to materially change our operating activities or divest ourselves of any interests we hold in Chinese assets. We may be subject to various government and regulatory interference. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly, by changes to existing laws or implementation of future laws and regulations relating to their business or industry. Such subsidiaries’ operations could be adversely affected, directly or indirectly, by changes to existing laws or implementation of future laws and regulations relating to their business or industry.

As of the date of this Report, we (1) are not required to obtain permissions from any PRC authorities to operate or issue our Common Stock to foreign investors, (2) are not subject to permission requirements from the CSRC, CAC or any other entity that is required to approve our operations in the Mainland China and Hong Kong, and (3) have not received or were denied such permissions by any PRC authorities. Nevertheless, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. The regulatory agencies like CSRC or CAC may impose fines and penalties on our operations in the Mainland China or Hong Kong, limit our ability to pay dividends outside of the Mainland China or Hong Kong, limit our operations in the Mainland China or Hong Kong, delay or restrict the repatriation of the credits from the ELOC Agreement or any future financing activities into the Mainland China or Hong Kong or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. The CSRC, the CAC, or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt future offerings before settlement and delivery of our Common Stock. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur. In addition, if the CSRC, the CAC or other regulatory PRC agencies later promulgate new rules requiring that we obtain their approvals for future offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect on the trading price of our securities.

Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or complete hinder our ability to offer or continue to offer our securities and cause the value of such securities to significantly decline or be worthless.

The Chinese government may exert more control over Hong Kong business or impose new laws or regulations on business activities in Hong Kong.

Although Acellent is in compliance with current Hong Kong laws and regulations, it may be subject to risks similar to those faced by companies operating in mainland China in the future if the Chinese government were to exert more control over Hong Kong business or impose new laws or regulations on business activities in Hong Kong, which often comes with little advance notice. In that case, we cannot guarantee you that we can timely comply with any new laws and regulations, which could materially affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings of our securities in the U.S.

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. is headquartered in San Mateo, California and has been inspected by the PCAOB on a regular basis, with the last inspection conducted in December 2021. 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.

Regulation and censorship of information disseminated over the Internet in the PRC may adversely affect our business, and we may be liable for content that is displayed on our website.

The PRC has enacted laws and regulations governing internet access and the distribution of products, services, news, information, audio-video programs and other content through the Internet. In the past, the PRC government has prohibited the distribution of information through the Internet that it deems to be in violation of PRC laws and regulations. If any of our Internet information is deemed by the PRC government to violate any content restrictions, we would not be able to continue to display such content and could become subject to penalties, including confiscation of income, fines, suspension of business and revocation of required licenses, which could materially and adversely affect our business, financial condition and results of operations. We may also be subject to potential liability for any unlawful actions of our customers or users of our website or for content we distribute that is deemed inappropriate. It may be difficult to determine the type of content that may result in liability to us, and if we are found to be liable, we may be prevented from operating our website in the PRC.

To the extent cash or assets in our business are in Hong Kong or held by our Hong Kong subsidiary, such cash or assets may not be available to fund our operations or for other use outside of Hong Kong due to interventions in or the imposition of restrictions and limitations by the PRC government.

As a holding company, we may rely on dividends and other distributions from Acellent, our Hong Kong subsidiary, for our cash requirements. There are currently no restrictions or limitations under Hong Kong law on the conversion of Hong Kong dollars into foreign currencies or the remittance of currencies out of Hong Kong, or on the ability of Acellent to transfer cash to us or to pay dividends. However, if the PRC government were to impose restrictions or limitations on our or Acellent’s ability to transfer cash or assets, the cash or assets of Acellent may not be available to fund our operations or for other use outside of Hong Kong. In addition, if Acellent incurs debt on its own behalf, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us.

Risks Related to Nevada Corporate Laws

Nevada law and our charter documents provide our directors and officers with broad protection from liability, which could reduce stockholder rights.

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.

We indemnify our officers and directors against liability to us and our security holders, and such indemnification could increase our operating costs.

Our articles of incorporation and bylaws require us to indemnify our officers and directors against claims associated with carrying out the duties of their offices. We are also required to advance the costs of certain legal defenses upon the indemnitee undertaking to repay such expenses to the extent it is determined that such person was not entitled to indemnification of such expenses. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our officers, directors, or control persons, the SEC has advised that such indemnification is against public policy and is therefore unenforceable.

Provisions in our articles of incorporation, our bylaws, and Nevada law might discourage, delay or prevent a change in control of our Company or changes in our management and, therefore, depress the trading price of our Common Stock.

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 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.

Nevada’s anti-takeover statutes could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders.

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.

Risks Related to our Common Stock

Our Common Stock may not develop an active trading market and the price and trading volume of our shares may fluctuate significantly.

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.

We do not anticipate paying cash dividends on our Common Stock in the foreseeable future.

We do not anticipate paying cash dividends in the foreseeable future. Presently, we intend to retain all our earnings, if any, to finance development and expansion of our business. Consequently, your only opportunity to achieve a positive return on your investment in us will be if the market price of our Common Stock appreciates.

Our former Chairman and Chief Executive Officer, Dr. Yi Lu, and our current Chairman and Chief Executive Officer, Dr. Xiaomin Chen, own a substantial portion of our outstanding shares of Common Stock and could each significantly influence the outcome of our corporate matters. Yi Lu owns a substantial portion of our outstanding shares of Common Stock and could significantly influence the outcome of our corporate matters.

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. As a result, Mr. 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. Lu 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. Lu 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.

The price of our Common Stock may be volatile or may decline regardless of our operating performance, and stockholders may not be able to resell their shares.

The market price of our stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

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.

You will experience dilution if we issue additional equity securities in future financing transactions.

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. 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 investors in the Resale Offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

Nasdaq may apply additional and more stringent criteria for our continued listing because we had a small Initial Public Offering and insiders hold a large portion of our listed securities.

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 cannot continue to satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.

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:

The market price of our Common Stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.

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. 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, given that we will have relatively small public floats after the Resale Offering, and the Selling Stockholder is offering Resale Shares through this Resale Offering. 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:

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.

Shares eligible for future sale may adversely affect the market price of our Common Stock, as the future sale of a substantial amount of outstanding Common Stock in the public marketplace could reduce the price of our Common Stock.

The market price of our shares could decline as a result of sales of substantial amounts of our shares in the public market or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of our Common Stock. As of October 13, 2026, 1,652,133 shares of our Common Stock were outstanding. The 200,000 shares issued in our January 2026 private placement, the 82,536 commitment fee shares issued under the ELOC Agreement and the 270,000 shares issued in the acquisition of Acellent are “restricted securities” that may become eligible for resale under Rule 144. Certain Common Stock are “restricted securities” as defined in Rule 144, as they are subject to lock-up in connection with our Initial Public Offering. These shares may be sold in the future without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities Act.

We will incur additional costs as a result of becoming a public company, which could negatively impact our net income and liquidity.

We became a public company in March 2025. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, Sarbanes-Oxley and rules and regulations implemented by the SEC and the Nasdaq Capital Market require significantly heightened corporate governance practices for public companies. We expect that these rules and regulations will increase our legal, accounting and financial compliance costs and will make many corporate activities more time-consuming and costly.

We do not expect to incur materially greater costs as a result of becoming a public company than those incurred by similarly sized U.S. public companies. In the event that we fail to comply with these rules and regulations, we could become the subject of a governmental enforcement action, investors may lose confidence in us and the market price of our Common Stock could decline.

The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.

We are a publicly listed company in the United States. As a publicly listed company, we will be required to file quarterly and annual reports with the Securities and Exchange Commission. In some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we will be governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could affect our results of operations.

ITEM 1B. Unresolved Staff Comments

Not applicable.

ITEM 1C. Cybersecurity

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