Correspondence 0001575872-23-000807 from Advanced Biomed Inc. (ADVB)
Advanced Biomed Inc.
Date: May 19, 2023 · CIK: 0001941029 · Accession: 0001575872-23-000807
AI Filing Summary & Sentiment
Reasoning
Referenced dates: March 17, 2023
Letter
VIA EDGAR United States Securities and Exchange Commission Division of Corporate Finance Amendment No.1 to Draft Registration Statement on Form S-1 Submitted March 6, 2023 CIK No. 0001941029
Re: Advanced Biomed Inc.
Dear Mr. Danberg,
Advanced Biomed Inc. (the “Company”) submit this letter in response to comments from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in its letter dated March 17, 2023, relating to the above referenced Amendment No.1 to Draft Registration Statement on Form S-1 (“Amendment No.1 to Draft Registration Statement”). The Company is concurrently submitting a registration statement on Form S-1 (the “Registration Statement”).
For the Staff’s convenience, the Staff’s comments have been stated below in their entirety in bold, followed by the corresponding responses from the Company. Except for any page references appearing in the headings or the Staff’s comments (which are references to the Amendment No.1 to Draft Registration Statement), all page references herein correspond to the page of the Amended Registration Statement. Capitalized terms used but not defined in this letter have the meanings ascribed to such terms in the Registration Statement.
Amendment No. 1 to Draft Registration Statement on Form S-1 submitted March 6, 2023
Prospectus Summary
Overview, page 9
1. We note your revisions in response to our prior comment 6 and reissue. Your disclosure on pages 9, 58 and 66 appears to indicate that the testing completed between July 17, 2019 and December 2021 was for your A+Pre, AC-1000 and A+SCDrop. However, you then present the results for A+LCGuard without mentioning the involvement of A+Pre, AC-1000 or A+SCDrop. Please revise to connect your statements about A+Pre, AC-1000 and A+SCDrop to the results of A+LCGuard. We also note that page 75 provides that the 123 case studies took place during the August 2020 – September 2022 timeframe. Please clarify what developmental tests and studies were conducted for each of your products, specify which products were tested in each of these studies, and when these studies each took place. Please also revise references to “clinic trials” and certain values “obtained through clinical trials” so as to not draw an inference to clinical trials as defined by the FDA and other comparable regulators. Revise to state explicitly that you have not conducted any clinical trials.
Response: We note the Staff’s comment and have revised the relevant disclosure to include the requested information and revised reference to “clinical trials” to show that we have not started the clinical trial for any of our products on pages 10, 61, 71, and 78 of the Registration Statement.
2. We note your revisions in response to our prior comment 7 and reissue in part. Please disclose here the role of single cell targeting in CTC capturing. We also note your statement that you will need to “complete the registration application and obtain the corresponding license in accordance with the local regulations before engaging in commercial activities in the respective regions/countries” and that you have “applied for product registration in China in accordance with relevant Chinese laws and regulations.” For each of China, the U.S. and Europe, please disclose the governmental authority holding regulatory jurisdiction over the commercialization of your products and the regulatory requirements you must satisfy to receive licensure or approval, including the steps you have completed and those that remain to be completed. We note, for example, your statements that A+Cellscan chip has completed a “development plan” and “performance study,” A+SCDrop samples have been “produced for product registration,” your CTC identification and counting application is “ready for commercialization,” your A+LCGuard has completed a “prospective study” and your immunochromogenic kits “are ready to be transformed into commercialization.” Please disclose what each of these steps mean in the context of registering your products for licensure or approval. Finally, we note your statement that your “products and devices work together to achieve the designed result.” Please clearly state whether, if approved, your products could be sold individually, or whether they are only designed to work together and not with any third-party products.
Response: We note the Staff’s comment and have revised the disclosure to more accurately describe the functions of our products and provide detailed information on the product registration process and the applicable authorities in China, the U.S. and Europe throughout the Registration Statement.
3. We note your response to prior comment 12 regarding permissions or approvals and reissue. Disclose each permission or approval that you or your subsidiaries are required to obtain from Chinese authorities to operate your business and to offer the securities being registered to foreign investors. State whether you or your subsidiaries are covered by permissions requirements from the China Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that is required to approve your operations, and state affirmatively whether you have received all requisite permissions or approvals and whether any permissions or approvals have been denied. Please also describe the consequences to you and your investors if you or your subsidiaries: (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions or approvals in the future. Please also identify your PRC counsel in the prospectus summary. Note that even if you disclose that you are not subject to any permissions or approvals you must still revise your summary to include the consequences to you and your offering if you: (i) inadvertently conclude that such permissions or approvals are not required, or (ii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions or approvals in the future.
Response: We note the Staff’s comment and have revised the disclosure accordingly on page 3 of the Registration Statement.
4. We note your response to our prior comment 13 and reissue. Please include disclosure in your prospectus summary that provides a clear description of how cash is transferred through your organization. Disclose your intentions to distribute earnings. Quantify any cash flows and transfers of other assets by type that have occurred between the holding company and its subsidiaries, and direction of transfer. Quantify any dividends or distributions that a subsidiary have made to the holding company and which entity made such transfer, and their tax consequences. Similarly quantify dividends or distributions made to U.S. investors, the source, and their tax consequences. Your disclosure should make clear if no transfers, dividends, or distributions have been made to date. Describe any restrictions on foreign exchange and your ability to transfer cash between entities, across borders, and to U.S. investors. Describe any restrictions and limitations on your ability to distribute earnings from the company, including your subsidiaries, to the parent company and U.S. investors.
Response: We note the Staff’s comment and have revised the disclosure accordingly on page 4 of the Registration Statement.
Commercialization Preparation, page 10
5. We note your revisions in response to our prior comment 8 and reissue in part. Please disclose what the development plan and performance study for your A+CellScan entailed, the purpose of the development plan and performance study, and when each was completed. Please also discuss the pre-mass production test in more detail and what factors will need to be satisfied to achieve mass production.
Response: We note the Staff’s comment and have disclosed the requested information in Our Business section under “A+CellScan” and “Commercialization Preparation” on pages 75 and 78 of the Registration Statement, respectively. The “development plan” is a generic phrase we used to describe the designed functions of A+CellScan and has been replaced by more detailed descriptions.
6. We note your revisions in response to our prior comment 14 and reissue in part. We note from your response that you “currently cooperate with Unimold Technology Inc. for small-scale trial produc”tion.” Please clearly disclose this information in your prospectus and describe the terms and parameters of this arrangement. To the extent that you have entered into any contracts with Unimold, please disclose the material terms of these agreements and file these agreements as exhibits to the Registration Statement.
Response: We note the Staff’s comment and have revised the disclosure to state that there is no formal cooperation agreement between Unimold and us, that each mold is made to order, and disclosed the material terms of the Non-Disclosure Agreement between Unimold and us on page 79 of the Registration Statement. The Non-Disclosure Agreement is filed with the Commission as an exhibit.
Competitive Strengths, page 11
7. We note your revisions in response to our prior comment 16. Please revise to provide a basis for your statement that you are able to “complete the detection and analysis in a short period of time while ensuring the accuracy of the results and reducing the death number of targeted cells throughout the process.”
Response: We note the Staff’s comment and have disclosed the basis of our statement on page 13 of the Registration Statement.
8. We note your revisions in response to our prior comment 10. Please revise the “Ready for Commercialization” label under your “Competitive Strengths” section to remove the implication that your products are ready to be commercialized, as none of your products have received the regulatory approvals necessary to commercialize them.
Response: We note the Staff’s comment and have revised the Competitive Strengths section accordingly on pages 13 and 80 of the Registration Statement.
Risks Factors
Risks Related to Doing Business in Taiwan
Advanced Biomed Taiwan does not currently own any trademark or patent, page 34
9. We note your revisions in response to our prior comment 20 and reissue in part. Please disclose the material terms of your agreement with National Applied Research Laboratories in an appropriate section of your Business section. Please be sure to disclose the payment obligations of the agreement, the aggregate amounts paid or received to date under the agreement, the duration of the agreement, and any termination provisions.
Response: We note the Staff’s comment and have disclosed material terms of the agreement on page 78 of the Registration Statement.
Use of Proceeds, page 54
10. We note your revisions in response to our prior comment 22 and reissue. Please disclose how far in the development process you estimate that the allocated proceeds from the offering will enable you to reach. For example, please indicate if you expect to be able to fully fund your clinical trial starting June 2023, complete the design and development of specific chips or finish building your laboratory without raising additional capital.
Response: We note the Staff’s comment and have revised the disclosure accordingly on page 56 of the Registration Statement.
Critical Accounting Policies and Estimates, page 61
11. We note your response to comment 25. Your disclosures continue to indicate that your significant accounting estimates include the useful lives for property, plant and equipment and intangible assets, fair value of financial instruments, assumptions used in assessing right of use assets and goodwill, impairment of long-lived assets, property, plant and equipment, intangible assets and goodwill and uncertain tax position. However you only disclose a critical accounting policy related to goodwill. Please revise as necessary. As previously requested, please also revise your disclosures to address the material implications of the uncertainties that are associated with the methods, assumptions and estimates underlying your critical accounting estimates. Your expanded disclosures should address the risk related to using different assumptions and analyze their sensitivity to change based on outcomes that are deemed reasonably likely to occur. It does not appear that your additional disclosures related to goodwill address this. Refer to Item 303(b)(3) of Regulation S-K.
Response: We note the Staff’s comment and have revised the disclosure accordingly on pages 65-67 of the Registration Statement.
Business
Quality Control System, page 75
12. We note your revisions in response to our prior comment 19. Please expand your Quality Control Section to disclose how you assess whether your products and processes adhere to the regulations subject to your Quality Control System.
Response: We note the Staff’s comment and have disclosed additional information related to our Quality Control System on page 78 of the Registration Statement.
Intellectual Property, page 77
13. We note your revisions in response to our prior comment 29 and reissue in part. Please revise your table to disclose the expiration dates of all your granted and pending patents and provide a product candidate that each patent relates to or clarify any patents that are not associated with any of your product candidates. Please also revise to explain what a utility model is and specify the type of invention patent to the extent subtypes exist for such jurisdictions.
Response: We note the Staff’s comment and have revised the IP related disclosure accordingly on page 82 of the Registration Statement.
Regulations in the PRC
Registration and Filings of Medical Devices, page 84
14. We note your response to our prior comment 31 and your statement on page 84: “As of the date of this prospectus, we have completed the filing for the Class I medical device. Our products are Class III medical devices and are required to conduct clinical trials before completing the registration process.” Please clarify for which device you completed the filing for as a Class I medical device and revise your summary to state that your products are Class III medical devices required to conduct clinical trials before completing the registration process.
Response: We note the Staff’s comment and have revised the disclosure accordingly on page 89 of the Registration Statement.
National Medical Insurance Program, page
15. We note your revisions in response to our prior comment 32 and reissue in part. We note your intention to “make [y]our products covered by medical insurance programs in the future.” Please discuss how you anticipate reimbursement coverage and rates will be determined for your products, the applicable agency or agencies that will make such determinations in the PRC and the anticipated timeline for any such decisions. Please also include risk factor disclosure regarding risks and uncertainties around reimbursement coverage and rates, particularly with respect to the need to negotiate such terms with government entities in the PRC, and the impact that an inability to receive third-party payor coverage will have on your business. We note, for example, your statement on page 29 that “In the absence of guarantee and reimbursement from third-party payers and government departments, end users pay for their own expenses will use our products.”
Response: We note the Staff’s comment and have revised the disclosure to include more information and risk related to
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CORRESP
1
filename1.htm
May 19, 2023
VIA
EDGAR
Conlon Danberg
United States Securities and Exchange Commission
Division of Corporate Finance
100 F. Street, N.E.
Washington, D.C. 20549
Re: Advanced Biomed Inc.
Amendment No.1 to Draft Registration
Statement on Form S-1
Submitted March 6, 2023
CIK No. 0001941029
Dear Mr. Danberg,
Advanced Biomed Inc. (the “Company”)
submit this letter in response to comments from the staff (the “Staff”) of the Securities and Exchange Commission (the
“Commission”) contained in its letter dated March 17, 2023, relating to the above referenced Amendment No.1 to Draft
Registration Statement on Form S-1 (“Amendment No.1 to Draft Registration Statement”). The Company is concurrently
submitting a registration statement on Form S-1 (the “Registration Statement”).
For the Staff’s convenience, the Staff’s
comments have been stated below in their entirety in bold, followed by the corresponding responses from the Company. Except for any page
references appearing in the headings or the Staff’s comments (which are references to the Amendment No.1 to Draft Registration
Statement), all page references herein correspond to the page of the Amended Registration Statement. Capitalized terms used but not
defined in this letter have the meanings ascribed to such terms in the Registration Statement.
Amendment No. 1 to Draft Registration Statement
on Form S-1 submitted March 6, 2023
Prospectus Summary
Overview, page 9
1.
We note your revisions in response to our prior comment 6 and reissue. Your disclosure on pages 9, 58 and 66 appears to indicate that the testing completed between July 17, 2019 and December 2021 was for your A+Pre, AC-1000 and A+SCDrop. However, you then present the results for A+LCGuard without mentioning the involvement of A+Pre, AC-1000 or A+SCDrop. Please revise to connect your statements about A+Pre, AC-1000 and A+SCDrop to the results of A+LCGuard. We also note that page 75 provides that the 123 case studies took place during the August 2020 – September 2022 timeframe. Please clarify what developmental tests and studies were conducted for each of your products, specify which products were tested in each of these studies, and when these studies each took place. Please also revise references to “clinic trials” and certain values “obtained through clinical trials” so as to not draw an inference to clinical trials as defined by the FDA and other comparable regulators. Revise to state explicitly that you have not conducted any clinical trials.
Response: We note the Staff’s comment
and have revised the relevant disclosure to include the requested information and revised reference to “clinical trials” to
show that we have not started the clinical trial for any of our products on pages 10, 61, 71, and 78 of the Registration Statement.
2.
We note your revisions in response to our prior comment 7 and reissue in part. Please disclose here the role of single cell targeting in CTC capturing. We also note your statement that you will need to “complete the registration application and obtain the corresponding license in accordance with the local regulations before engaging in commercial activities in the respective regions/countries” and that you have “applied for product registration in China in accordance with relevant Chinese laws and regulations.” For each of China, the U.S. and Europe, please disclose the governmental authority holding regulatory jurisdiction over the commercialization of your products and the regulatory requirements you must satisfy to receive licensure or approval, including the steps you have completed and those that remain to be completed. We note, for example, your statements that A+Cellscan chip has completed a “development plan” and “performance study,” A+SCDrop samples have been “produced for product registration,” your CTC identification and counting application is “ready for commercialization,” your A+LCGuard has completed a “prospective study” and your immunochromogenic kits “are ready to be transformed into commercialization.” Please disclose what each of these steps mean in the context of registering your products for licensure or approval. Finally, we note your statement that your “products and devices work together to achieve the designed result.” Please clearly state whether, if approved, your products could be sold individually, or whether they are only designed to work together and not with any third-party products.
Response: We note the Staff’s comment
and have revised the disclosure to more accurately describe the functions of our products and provide detailed information on the product
registration process and the applicable authorities in China, the U.S. and Europe throughout the Registration Statement.
3.
We note your response to prior comment 12 regarding permissions or approvals and reissue. Disclose each permission or approval that you or your subsidiaries are required to obtain from Chinese authorities to operate your business and to offer the securities being registered to foreign investors. State whether you or your subsidiaries are covered by permissions requirements from the China Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that is required to approve your operations, and state affirmatively whether you have received all requisite permissions or approvals and whether any permissions or approvals have been denied. Please also describe the consequences to you and your investors if you or your subsidiaries: (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions or approvals in the future. Please also identify your PRC counsel in the prospectus summary. Note that even if you disclose that you are not subject to any permissions or approvals you must still revise your summary to include the consequences to you and your offering if you: (i) inadvertently conclude that such permissions or approvals are not required, or (ii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions or approvals in the future.
Response: We note the Staff’s comment
and have revised the disclosure accordingly on page 3 of the Registration Statement.
4.
We note your response to our prior comment 13 and reissue. Please include disclosure in your prospectus summary that provides a clear description of how cash is transferred through your organization. Disclose your intentions to distribute earnings. Quantify any cash flows and transfers of other assets by type that have occurred between the holding company and its subsidiaries, and direction of transfer. Quantify any dividends or distributions that a subsidiary have made to the holding company and which entity made such transfer, and their tax consequences. Similarly quantify dividends or distributions made to U.S. investors, the source, and their tax consequences. Your disclosure should make clear if no transfers, dividends, or distributions have been made to date. Describe any restrictions on foreign exchange and your ability to transfer cash between entities, across borders, and to U.S. investors. Describe any restrictions and limitations on your ability to distribute earnings from the company, including your subsidiaries, to the parent company and U.S. investors.
Response: We note the Staff’s comment
and have revised the disclosure accordingly on page 4 of the Registration Statement.
Commercialization
Preparation, page 10
5.
We note your revisions in response to our prior comment 8 and reissue in part. Please disclose what the development plan and performance study for your A+CellScan entailed, the purpose of the development plan and performance study, and when each was completed. Please also discuss the pre-mass production test in more detail and what factors will need to be satisfied to achieve mass production.
Response: We note the Staff’s comment
and have disclosed the requested information in Our Business section under “A+CellScan” and “Commercialization
Preparation” on pages 75 and 78 of the Registration Statement, respectively. The “development plan” is a generic
phrase we used to describe the designed functions of A+CellScan and has been replaced by more detailed descriptions.
6.
We note your revisions in response to our prior comment 14 and reissue in part. We note from your response that you “currently cooperate with Unimold Technology Inc. for small-scale trial produc”tion.” Please clearly disclose this information in your prospectus and describe the terms and parameters of this arrangement. To the extent that you have entered into any contracts with Unimold, please disclose the material terms of these agreements and file these agreements as exhibits to the Registration Statement.
Response: We note the Staff’s comment
and have revised the disclosure to state that there is no formal cooperation agreement between Unimold and us, that each mold is made
to order, and disclosed the material terms of the Non-Disclosure Agreement between Unimold and us on page 79 of the Registration Statement.
The Non-Disclosure Agreement is filed with the Commission as an exhibit.
Competitive Strengths, page 11
7.
We note your revisions in response to our prior comment 16. Please revise to provide a basis for your statement that you are able to “complete the detection and analysis in a short period of time while ensuring the accuracy of the results and reducing the death number of targeted cells throughout the process.”
Response: We note the Staff’s comment
and have disclosed the basis of our statement on page 13 of the Registration Statement.
8.
We note your revisions in response to our prior comment 10. Please revise the “Ready for Commercialization” label under your “Competitive Strengths” section to remove the implication that your products are ready to be commercialized, as none of your products have received the regulatory approvals necessary to commercialize them.
Response: We note the Staff’s comment
and have revised the Competitive Strengths section accordingly on pages 13 and 80 of the Registration Statement.
Risks Factors
Risks Related to Doing Business in Taiwan
Advanced Biomed Taiwan does not currently
own any trademark or patent, page 34
9.
We note your revisions in response to our prior comment 20 and reissue in part. Please disclose the material terms of your agreement with National Applied Research Laboratories in an appropriate section of your Business section. Please be sure to disclose the payment obligations of the agreement, the aggregate amounts paid or received to date under the agreement, the duration of the agreement, and any termination provisions.
Response: We note the Staff’s comment
and have disclosed material terms of the agreement on page 78 of the Registration Statement.
Use of Proceeds, page 54
10.
We note your revisions in response to our prior comment 22 and reissue. Please disclose how far in the development process you estimate that the allocated proceeds from the offering will enable you to reach. For example, please indicate if you expect to be able to fully fund your clinical trial starting June 2023, complete the design and development of specific chips or finish building your laboratory without raising additional capital.
Response: We note the Staff’s comment
and have revised the disclosure accordingly on page 56 of the Registration Statement.
Critical Accounting Policies and Estimates,
page 61
11.
We note your response to comment 25. Your disclosures continue to indicate that your significant accounting estimates include the useful lives for property, plant and equipment and intangible assets, fair value of financial instruments, assumptions used in assessing right of use assets and goodwill, impairment of long-lived assets, property, plant and equipment, intangible assets and goodwill and uncertain tax position. However you only disclose a critical accounting policy related to goodwill. Please revise as necessary. As previously requested, please also revise your disclosures to address the material implications of the uncertainties that are associated with the methods, assumptions and estimates underlying your critical accounting estimates. Your expanded disclosures should address the risk related to using different assumptions and analyze their sensitivity to change based on outcomes that are deemed reasonably likely to occur. It does not appear that your additional disclosures related to goodwill address this. Refer to Item 303(b)(3) of Regulation S-K.
Response: We note the Staff’s comment
and have revised the disclosure accordingly on pages 65-67 of the Registration Statement.
Business
Quality Control System, page 75
12.
We note your revisions in response to our prior comment 19. Please expand your Quality Control Section to disclose how you assess whether your products and processes adhere to the regulations subject to your Quality Control System.
Response: We note the Staff’s comment
and have disclosed additional information related to our Quality Control System on page 78 of the Registration Statement.
Intellectual Property, page 77
13.
We note your revisions in response to our prior comment 29 and reissue in part. Please revise your table to disclose the expiration dates of all your granted and pending patents and provide a product candidate that each patent relates to or clarify any patents that are not associated with any of your product candidates. Please also revise to explain what a utility model is and specify the type of invention patent to the extent subtypes exist for such jurisdictions.
Response: We note the Staff’s comment
and have revised the IP related disclosure accordingly on page 82 of the Registration Statement.
Regulations in the PRC
Registration and Filings of Medical Devices,
page 84
14.
We note your response to our prior comment 31 and your statement on page 84: “As of the date of this prospectus, we have completed the filing for the Class I medical device. Our products are Class III medical devices and are required to conduct clinical trials before completing the registration process.” Please clarify for which device you completed the filing for as a Class I medical device and revise your summary to state that your products are Class III medical devices required to conduct clinical trials before completing the registration process.
Response: We note the Staff’s comment
and have revised the disclosure accordingly on page 89 of the Registration Statement.
National Medical Insurance Program, page
87
15.
We note your revisions in response to our prior comment 32 and reissue in part. We note your intention to “make [y]our products covered by medical insurance programs in the future.” Please discuss how you anticipate reimbursement coverage and rates will be determined for your products, the applicable agency or agencies that will make such determinations in the PRC and the anticipated timeline for any such decisions. Please also include risk factor disclosure regarding risks and uncertainties around reimbursement coverage and rates, particularly with respect to the need to negotiate such terms with government entities in the PRC, and the impact that an inability to receive third-party payor coverage will have on your business. We note, for example, your statement on page 29 that “In the absence of guarantee and reimbursement from third-party payers and government departments, end users pay for their own expenses will use our products.”
Response: We note the Staff’s comment
and have revised the disclosure to include more information and risk related to