Edgar Filing: Advanced Biomedical Technologies Inc.

abmt_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended January 31, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-53051

Advanced BioMedical Technologies, Inc.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

350 Fifth Avenue, 59th Floor

New York, NY 10118

(Address of principal executive offices, including zip code.)

(718) 766-7898

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES o NO þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO þ

As of March 25, 2013, there are 56,574,850 shares of common stock outstanding.

All references in this Report on Form 10-Q to the terms “we”, “our”, “us”, the “Company”, “ABMT” and the “Registrant” refer to Advanced BioMedical Technologies, Inc. unless the context indicates another meaning.

TABLE OF CONTENTS

		Page

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		6
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		15
Item 4	Controls and Procedures		15

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings		16
Item 1A.	Risk Factors		16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		16
Item 3.	Defaults upon Senior Securities		16
Item 4.	Other Information		16
Item 5.	Exhibits		17

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying consolidated unaudited financial statements of Advanced BioMedical Technologies, Inc., a Nevada corporation are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company's most recent annual financial statements for the year ended October 31, 2012 included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 13, 2013. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying consolidated financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying consolidated financial statements for the period ended January 31, 2013 are not necessarily indicative of the operating results that may be expected for the full year ending October 31, 2013.

TABLE OF CONTENTS

ADVANCED BIOMEDICAL TECHNOLOGIES, INC.

AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED FINANCIAL STATEMENTS

AS OF JANUARY 31, 2013

(UNAUDITED)

TABLE OF CONTENTS

ADVANCED BIOMEDICAL TECHNOLOGIES, INC.

AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONTENTS

	Pages

Consolidated Balance Sheets as of January 31, 2013 (unaudited) and October 31, 2012		F-1

Consolidated Statements of Operations and Comprehensive Loss for the three months ended January 31, 2013 and 2012 and the period from September 25, 2002 (inception) through January 31, 2013(unaudited)		F-2

Consolidated Statements of Stockholders’ Deficit for the period from September 25, 2002 (inception) through January 31, 2013 (unaudited)		F-3

Consolidated Statements of Cash Flows for the three months ended January 31, 2013 and 2012 and the period from inception September 25, 2002 9inception through January 31, 2013 (unaudited)		F-4

Notes to the Consolidated Financial Statements (unaudited)		F-5 - F-8

TABLE OF CONTENTS

ADVANCED BIOMEDICAL TECHNOLOGIES, INC. ("ABMT") AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

	January 31,			October 31,
	2013			2012
ASSETS	(Unaudited)

CURRENT ASSETS
Cash and cash equivalents	$	44,488		$	49,092
Other receivables and prepaid expenses		20,473			21,637

Total Current Assets		64,961			70,729

PROPERTY AND EQUIPMENT, NET		137,097			141,613

DEPOSIT FOR PURCHASE OF PROPERTY AND EQUIPMENT		1,675			1,670

Total Assets	$	203,733		$	214,012

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Other payables and accrued expenses	$	41,691		$	38,208
Due to directors		492,996			507,395
Due to a stockholder		282,384			267,819
Due to related parties		1,786,942			1,626,785

Total Current Liabilities		2,604,013			2,440,207

Total Liabilities		2,604,013			2,440,207

COMMITMENTS AND CONTINGENCIES		-			-

DEFICIT
ABMT Stockholders' Deficit
Common stock, $0.00001 par value, 100,000,000 shares
authorized, 56,574,850 shares
issued and outstanding as of January 31, 2013 and October 31, 2012		566			566
Common stock, 230,000 shares to be issued		-			-
Stock subscription receivable		-			-
Additional paid-in capital		1,677,921			1,671,956
Deferred stock compensation		-			(1,667	)
Accumulated deficit during development stage		(3,857,269	)		(3,682,008	)
Accumulated other comprehensive loss		(221,498	)		(215,042	)
Total Deficit		(2,400,280	)		(2,226,195	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	203,733		$	214,012

F-1

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ADVANCED BIOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

	Three months ended						September 25, 2002 (inception) through
	January 31,			January 31,			January 31,
	2013			2012			2013
OPERATING EXPENSES
General and administrative expenses	$	109,111		$	150,380		$	3,196,816
Depreciation		6,438			5,306			297,072
Research and development (net of government grant)		19,411			17,632			276,094
Total Operating Expenses		134,960			173,318			3,769,982

LOSS FROM OPERATIONS		(134,960	)		(173,318	)		(3,769,982	)

OTHER INCOME (EXPENSES)
Government grants		-			-			244,479
Interest income		20			27			1,833
Interest paid to a stockholder and related parties		(30,784	)		(19,779	)		(287,820	)
Imputed interest		(5,965	)		(6,610	)		(235,456	)
Other, net		(3,572	)		215			(27,528	)
Total Other Income (Expenses), net		(40,301	)		(26,147	)		(304,492	)

LOSS FROM OPERATIONS BEFORE TAXES		(175,261	)		(199,465	)		(4,074,474	)
Income tax expense		-			-			-
NET LOSS		(175,261	)		(199,465	)		(4,074,474	)
Net loss attributable to noncontrolling interests		-			-			217,205
NET LOSS ATTRIBUTABLE TO ABMT
COMMON STOCKHOLDERS		(175,261	)		(199,465	)		(3,857,269	)

OTHER COMPREHENSIVE LOSS
Foreign currency translation loss		(6,456	)		(11,881	)		(221,498	)
COMPREHENSIVE LOSS ATTRIBUTABLE
TO ABMT COMMON STOCKHOLDERS	$	(181,717	)	$	(211,346	)	$	(4,078,767	)

Net loss per share -basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average number of shares outstanding during the period - basic and diluted		56,574,850			56,534,633

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ADVANCED BIOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (UNAUDITED)

																		Accumulated deficit during development stage			Accumulated other comprehensive loss
	Common stock issued				Shares to be issued				Stock subscriptions receivable			Additional paid-in capital			Deferred stock compensation
	Number of shares				Number of shares		Amount																	Noncontrolling interests
	Number of shares		Amount		Number of shares		Amount																	Noncontrolling interests			Total

Stock issued to founders for cash		50,510,000	$	505		-	$	-	$	-		$	275,002		$	-		$	-		$	-		$	217,205		$	492,712

Net loss for the period		-		-		-		-		-			-			-			(40,343	)		-			(17,290	)		(57,633	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(225	)		10			(215	)

Balance at December 31, 2003		50,510,000	$	505		-	$	-	$	-		$	275,002		$	-		$	(40,343	)	$	(225	)	$	199,925		$	434,864

Net loss for the year		-		-		-		-		-			-			-			(65,960	)		-			(28,269	)		(94,229	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(357	)		2			(355	)

Balance at December 31, 2004		50,510,000	$	505		-	$	-	$	-		$	275,002		$	-		$	(106,303	)	$	(582	)	$	171,658		$	340,280

Imputed interest on advances from a stockholder and related company		-		-		-		-		-			23,103			-			-			-			-			23,103

Net loss for the year		-		-		-		-		-			-			-			(357,863	)		-			(153,370	)		(511,233	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(12,290	)		2,064			(10,226	)

Balance at December 31, 2005		50,510,000	$	505		-	$	-	$	-		$	298,105		$	-		$	(464,166	)	$	(12,872	)	$	20,352		$	(158,076	)

Imputed interest on advances from a stockholder and related company		-		-		-		-		-			27,184			-			-			-			-			27,184

Net loss for the year		-		-		-		-		-			-			-			(172,738	)		-			(18,276	)		(191,014	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(6,084	)		(2,076	)		(8,160	)

Balance at December 31, 2006		50,510,000	$	505			$	-	$	-		$	325,289		$	-		$	(636,904	)	$	(18,956	)	$	-		$	(330,066	)

Imputed interest on advances from a stockholder, related company and related party		-		-		-		-		-			39,021			-			-			-			-			39,021

Net loss for the year		-		-		-		-		-			-			-			(196,871	)		-			-			(196,871	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(27,401	)		-			(27,401	)

Balance at December 31, 2007		50,510,000	$	505		-	$	-	$	-		$	364,310		$	-		$	(833,775	)	$	(46,357	)	$	-		$	(515,317	)

Imputed interest on advances from a stockholder and related company		-		-		-		-		-			27,764			-			-			-			-			27,764

Net loss for the period		-		-		-		-		-			-			-			(227,038	)		-			-			(227,038	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(35,833	)		-			(35,833	)

Balance at October 31,2008		50,510,000	$	505		-	$	-	$	-		$	392,074		$	-		$	(1,060,813	)	$	(82,190	)	$	-		$	(750,424	)

Recapitalization		5,104,000		51		-		-		-			(51	)		-			-			-			-			-

Stock issued for services ($3.05 per share)		100,000		1		-		-		-			304,999			(292,292	)		-			-			-			12,708

Stock issued for cash in private placement ($1.15 per share)		5,000		-		-		-		-			5,750			-			-			-			-			5,750

Stock issued for cash in private placement ($1.15 per share)		2,000		-		-		-		-			2,300			-			-			-			-			2,300

Contributed capital		-		-		-		-		-			26,950			-			-			-			-			26,950

Distributed to the stockholders		-		-		-		-		-			(31,409	)		-			-			-			-			(31,409	)

Imputed Interest on advances from a stockholder and related company		-		-		-		-		-			31,656			-			-			-			-			31,656

Net loss for the year		-		-		-		-		-			-			-			(558,432	)		-			-			(558,432	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(1,856	)		-			(1,856	)

Balance at October 31, 2009		55,721,000	$	557			$	-	$	-		$	732,269		$	(292,292	)	$	(1,619,245	)	$	(84,046	)	$	-		$	(1,262,757	)

Stock issued for cash in private placement ($1.5 per share)		6,667		-		-		-		-			10,000			-			-			-			-			10,000

Stock issued for cash in private placement ($1.5 per share)		16,667		-		-		-		-			25,000			-			-			-			-			25,000

Stock issued for cash in private placement ($1.5 per share)		136,833		2		-		-		-			205,248			-			-			-			-			205,250

Stock to be issued for cash in private placement ($1.0 per share)		-		-		230,000		2		(230,000	)		229,998			-			-			-			-			-

Stock issued for services ($1 per share)		100,000		1		-		-		-			99,999			(100,000	)		-			-			-			-

Stock issued for services ($1 per share)		13,683		-		-		-		-			13,683			(13,683	)		-			-			-			-

Stock issued for services ($1 per share)		150,000		2		-		-		-			149,998			(150,000	)		-			-			-			-

Amortisation for stock issued for services		-		-		-		-		-			-			349,516			-			-			-			349,516

Imputed interest on advances from a stockholder and related company		-		-		-		-		-			28,356			-			-			-			-			28,356

Net loss for the year		-		-		-		-		-			-			-			(816,799	)		-			-			(816,799	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(29,063	)		-			(29,063	)

Balance at October 31, 2010		56,144,850	$	562		230,000	$	2	$	(230,000	)	$	1,494,551		$	(206,459	)	$	(2,436,044	)	$	(113,109	)	$	-		$	(1,490,497	)

Stock issued for cash in private placement ($1 per share)		230,000		2		-		230,000		(2	)		-			-			-			-			-			230,000

Stock issued for cash in private placement ($1.05 per share)		100,000		1		-		-		-			104,999			(105,000	)		-			-			-			-

Imputed interest on advances from a stockholder and related company		-		-		-		-		-			27,060			-			-			-			-			27,060

Amortisation for stock issued for services		-		-		-		-		-			-			223,958			-			-			-			223,958

Net loss for the year		-		-		-		-		-			-			-			(487,439	)		-			-			(487,439	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(65,852	)		-			(65,852	)

Balance at October 31, 2011		56,474,850	$	565			$	-	$	-		$	1,626,610		$	(87,501	)	$	(2,923,483	)	$	(178,961	)	$	-		$	(1,562,770	)

Stock issued for services ($0.2 per share)		100,000		1				-		-			19,999			(20,000	)		-			-			-			-

Imputed interest on advances from a stockholder and related company		-		-		-		-		-			25,347			-			-			-			-			25,347

Amortisation for stock issued for services		-		-		-		-		-			-			105,834			-			-			-			105,834

Net loss for the year		-		-		-		-		-			-			-			(758,525	)		-			-			(758,525	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(36,081	)		-			(36,081	)

Balance at Oct 31, 2012		56,574,850	$	566			$	-	$	-		$	1,671,956		$	(1,667	)	$	(3,682,008	)	$	(215,042	)	$	-		$	(2,226,195	)

Imputed interest on advances from a stockholder and related company		-		-		-		-		-			5,965			-			-			-			-			5,965

Amortisation for stock issued for services		-		-		-		-		-			-			1,667			-			-			-			1,667

Net loss for the period		-		-		-		-		-			-						(175,261	)		-			-			(175,261	)

Foreign currency translation loss		-		-		-		-		-			-			-			-			(6,456	)		-			(6,456	)

Balance at Jan 31, 2013		56,574,850	$	566		-	$	-	$	-		$	1,677,921		$	-		$	(3,857,269	)	$	(221,498	)	$	-		$	(2,400,280	)

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ADVANCED BIOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three months ended						Sep 25, 2002 (inception) through January 31, 2013
	January 31,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss attributable to ABMT common stockholders	$	(175,261	)	$	(199,465	)	$	(3,857,269	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		6,438			5,306			297,072
Loss on disposal of fixed assets		-			-			11,704
Stock issued for services		1,667			29,584			693,683
Noncontrolling interests		-			-			(217,205	)
Imputed interest		5,965			6,610			235,456
Changes in operating assets and liabilities (Increase) decrease in:
Other receivables and prepaid expenses Increase (decrease) in:		1,219			(514	)		(20,473	)
Other payables and accrued expenses		3,452			29,155			41,691
Net cash used in operating activities		(156,520	)		(129,324	)		(2,815,341	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(1,523	)		(66,918	)		(445,873	)
Construction in progress		-			17,159			-
Deposit for purchase of property and equipment		-			9,320			(1,675	)
Net cash used in investing activities		(1,523	)		(40,439	)		(447,548	)

CASH FLOWS FROM FINANCING ACTIVITIES
Stock issued to founders		-			-			505
Proceeds from issuance of shares		-			-			478,300
Contribution by stockholders		-			-			519,157
Distributed to stockholders		-			-			(31,409	)
Due to a stockholder		14,662			27,339			282,384
Due to directors		(15,829	)		(7,108	)		492,996
Due to related parties		154,549			143,184			1,786,942
Net cash provided by financing activities		153,382			163,415			3,528,875

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS		57			235			(221,498	)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(4,604	)		(6,113	)		44,488

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		49,092			78,781			-

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	44,488		$	72,668		$	44,488

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ADVANCED BIOMEDICALTECHNOLOGIES, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the unaudited consolidated financial statements contain all adjustments consisting only of normal recurring accruals considered necessary to present fairly the Company's financial position as of January 31, 2013, the consolidated results of operations for the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) to January 31, 2013 and consolidated statements of cash flows for the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) to January 31, 2013. The consolidated results for the three months ended January 31, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year ending October 31, 2013. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes for the year ended October 31, 2012 appearing in the Company's annual report on Form 10-K as filed with the Securities and Exchange Commission on February 13, 2013.

NOTE 2 ORGANIZATION

Advanced BioMedical Technologies, Inc. (fka “Geostar Mineral Corporation” or ”Geostar”) (“ABMT”) was incorporated in Nevada on September 12, 2006.

Shenzhen Changhua Biomedicine Engineering Company Limited (“Shenzhen Changhua”) was incorporated in the People’s Republic of China (“PRC”) on September 25, 2002 as a limited liability company with a registered capital of $724,017. Shenzhen Changhua is owned by two stockholders in the proportion of 70% and 30% respectively. Shenzhen Changhua plans to develop, manufacture and market self-reinforced, re-absorbable degradable PA screws, robs and binding ties for fixation on human fractured bones. The Company is currently conducting clinical trials on its products and intends to raise additional capital to produce and market its products commercially pending the approval from the State Food and Drug Administration (“SFDA”) of the PRC on its products. The Company has no revenue since its inception and, in accordance with Accounting Standards Codification (“ASC”) Topic 915, “Development Stage Entities” (formerly Statement of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprise”), is considered a Development Stage Company.

Masterise Holdings Limited (“Masterise”) was incorporated in the British Virgin Islands on May 31, 2007 as an investment holding company and was then owned as to 63% by the spouse of Shenzhen Changhua’s 70% majority stockholder at the time and 37% by a third party corporation.

On January 29, 2008, Masterise entered into a Share Purchase Agreement (“the Agreement”) with a stockholder of Shenzhen Changhua whereupon Masterise acquired 70% of Shenzhen Changhua for US$64,100 in cash. The acquisition was completed on February 25, 2008. As both Masterise and Shenzhen Changhua were under common control and management, the acquisition was accounted for as a reorganization of entities under common control. Accordingly, the operations of Shenzhen Changhua were included in the consolidated financial statements as if the transactions had occurred retroactively.

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On December 31, 2008, ABMT consummated a Share Exchange Agreement (“the Exchange Agreement”) with the stockholders of Masterise pursuant to which ABMT issued 50,000 shares of Common Stock to the stockholders of Masterise for 100% equity interest in Masterise.

Concurrently, on December 31, 2008, a major stockholder of ABMT also consummated an Affiliate Stock Purchase Agreement (the “Affiliate Agreement”) with thirteen individuals including all the stockholders of Masterise, pursuant to which the major stockholder sold a total of 5,001,000 shares of ABMT’s common stock for a total aggregate consideration of $5,000, including 4,438,250 shares to the stockholders of Masterise.

On consummation of the Exchange Agreement and the Affiliate Agreement, the 70% majority stockholder of Masterise became an 80.7% stockholder of ABMT.

On March 13, 2009, the name of the Company was changed from Geostar Mineral Corporation to Advanced Biomedical Technologies, Inc.

The merger of ABMT and Masterise was treated for accounting purposes as a capital transaction and recapitalization by Masterise (“the accounting acquirer”) and a re-organization by ABMT (“the accounting acquiree”). The financial statements have been prepared as if the re-organization had occurred retroactively.

Accordingly, these financial statements include the following:

(1)	The balance sheet consisting of the net assets of the acquirer at historical cost and the net assets of the acquiree at historical cost.

(2)	The statement of operations including the operations of the acquirer for the periods presented and the operations of the acquiree from the date of the transaction.

ABMT, Masterise and Shenzhen Changhua are hereinafter referred to as (“the Company”)

NOTE 3 PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the financial statements of ABMT and its wholly owned subsidiary, Masterise and its 70% owned subsidiary, Shenzhen Changhua. The noncontrolling interests represent the noncontrolling stockholders’ 30% proportionate share of the results of Shenzhen Changhua.

All significant inter-company balances and transactions have been eliminated in consolidation.

NOTE 4 USE OF ESTIMATES

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 5 RELATED PARTY TRANSACTIONS

As of January 31, 2013 and October 31, 2012, the Company owed a stockholder $282,384 and $267,819 respectively, which is unsecured and repayable on demand. Interest is charged at 7% per annum on the amount owed.

As of January 31, 2013 and October 31, 2012, the Company owed two related parties a total of $1,786,942 and $1,626,785 respectively, which are unsecured and repayable on demand. Interests are charged at 7% per annum on the amounts owed.

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Total interest expenses on advances from a stockholder and the related parties accrued for the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) through January 31, 2013 were $30,784, $19,779 and $287,820 respectively.

As of January 31, 2013 and October 31, 2012, the Company owed $492,996 and $507,395 respectively, to two directors for advances made on an unsecured basis, repayable on demand and interest free.

Imputed interest charged at 5% per annum on the amounts owed to three directors and a related company is $5,965, $6,610 and $235,456 for the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) through January 31, 2013 respectively.

NOTE 6 STOCKHOLDERS’ EQUITY

Common stock

On December 8, 2011, the Company issued 100,000 shares of restricted common stock at $0.2 to Dr. John Lynch, the Company's chief officer of dental technologies, for services for a term of twelve months. The shares were valued at the closing price on the date of grant yielding an aggregate fair value of $20,000. In this respect, the Company recognized $1,667 for the three months ended January 31, 2013 as consultancy fees included in general and administative expenses and recorded deferred stock compensation of $0 as of January 31, 2013.

For the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) through January 31, 2013, the Company recognized $1,667, $29,584 and $693,683 respectively as consultancy fees included in general and administrative expenses and recorded deferred stock compensation carried forward of $0 and $1,667 as of January 31, 2013 and October 31, 2012 for these services.

NOTE 7 COMMITMENTS AND CONTINGENCIES

The Company’s existing rental leases do not contain significant restrictive provisions. The following is a schedule by year of future minimum lease obligations under non-cancelable rental operating leases which fall due as follows:

Year ending 31, October, 2013		$	35,043
Fiscal year ending October 31, 2014		$	30,024

NOTE 8 FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB Codification Topic 825 (ASC Topic 825), "Disclosure About Fair Value of Financial Instruments," requires certain disclosures regarding the fair value of financial instruments. The carrying amounts of other receivables and prepaid expenses, other payables and accrued liabilities and due to a stockholder, directors and related parties approximate their fair values because of the short-term nature of the instruments. The management of the Company is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial statements.

NOTE 9 RECENT ACCOUNTING PRONOUNCEMENTS

There have been no new accounting pronouncements during the three months ended January 31, 2013, that are of significance or potentially significance, to us.

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NOTE 10 GOING CONCERN

As reflected in the accompanying unaudited consolidated financial statements, the Company has an accumulated deficit of $3,857,269 as of January 31, 2013 that includes a net loss of $175,261 for the three months ended January 31, 2013. As of January 31, 2013, the Company’s total current liabilities exceeded Company incurred net current liabilities of $2,539,052 and net liabilities of $ 2,400,280 its total current assets by $2,539,052 and the Company used cash in operations of $125,736 for the three months ended on that date. These factors raise substantial doubt about its ability to continue as a going concern. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. The Company is actively pursuing additional funding and strategic partners, which will enable the Company to implement its business plan. Management believes that these actions as successful will allow the Company to continue its operations through the next fiscal year.

NOTE 11 SUBSEQUENT EVENT

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to January 31, 2013 to the date these financial statements were issued, and has determined that it does not have any material subequent events to disclose in these financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section of the report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this quarterly report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Overview

The following discussion is an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance and should be read in conjunction with the financial statements included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward looking statements as a result of any number of factors, including those set forth in this Quarterly Report, and in the Company’s most recent Annual Report on Form 10-K filed on February 13, 2013.

The Company is subject to a number of risks similar to other companies in the medical device industry. These risks include but are not limited to rapid technological change, uncertainty of market acceptance of our products, uncertainty of regulatory approval, competition from substitute products and larger companies, the need to obtain additional financing, compliance with government regulation, protection of proprietary technology, product liability, and the dependence on key individuals.

All written and oral forward-looking statements made in connection with this Quarterly Report on Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Our Business

We are engaged in the business of designing, developing, manufacturing and the planned future marketing of self-reinforced, re-absorbable biodegradable internal fixation devices. Our polyamide materials, their uses and manufacturing processes are protected by Patent no. ZL97119073.9, PRC, issued by the Chinese Intellectual Property Rights Bureau. Our polyamide materials are used in producing screws, binding wires, rods and related products. These products are used in a variety of applications including orthopedic trauma, sports related medical treatment, or cartilage injuries, and reconstructive dental procedures. At this time, our company is the sole patent holder of PA technologies in China, as well as the only company currently engaged in clinical trials and marketing submission for PA devices in the PRC. Our products are biodegradable internal fixation devices which are made of a very unique material called Polyamide ("PA"). Our PA products, such as screws, binding wires, rods, suture anchors and rib-pins consist of enhanced fibers and high molecular polymers which are designed to facilitate quick healing of complex fractures in many areas of the human skeletal system. Our products offer a number of significant advantages over existing metal implants and the first generation of degradable implants (i.e. PLLA) for patients, surgeons and other customers including:

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1.	A notably reduced need for a secondary surgery to remove implant due to post-operative complications, therefore avoiding unnecessary risk and expense on all patient care;

2.	Enhancing the performance of the materials by manufacturing them to be easily fitted to each patient, forming an exact fit;

3.	Improving the biological activity of materials. Clinical trial results have shown that as PA implants degrade, they promote a progressive shift of load to the new bone creating micro-motion and thereby avoiding bone atrophy due to 'stress shielding';

4.	Reducing the chance of post-operative infection;

5.	Effectively controlling the degeneration speed, so that there will be no complications in treating repeat injuries;

6.	Ease of post-operative care i.e. no distortion during x-ray imaging;

7.	Simple and cost-effective to manufacture.

Our products are designed to replace the traditional internal fixation device made of stainless steel and titanium and overcome the limitations of previous generations of products such as PLA and PLLA. Our laboratory statistics show that our PA products have a higher mechanical strength, last longer in degradation ratio and are more evenly absorbed form outer layer inwards as compared with similar materials such as PLA and PLLA. Thus PA allows increased restoration time for bone healing and re-growth. The Company's PA Degradable and Absorbable Screw ("PA Screw") and Degradable and Absorbable Binding Wire (“PA Binding Wire”) are currently being tested in human trials under permit from China's State Food and Drug Administration ("SFDA").

SFDA Application Process for PA Screws

The Company first submitted its application for PA Screws to the SFDA in 2008. The application has been withheld by the SFDA pending additional clinical trial cases. This is due to the amended SFDA regulations, which unlike previous regulations require the applicant to specify the position on the body where the clinical trial is carried out. Our amended SFDA application has specified the ankle fracture as the body part of our clinical trial. This is because bones around this part carry most of the body weight. As of January 31, 2013, we have completed all additional clinical trials required by the SFDA. The company’s SFDA Application is under the SFDA Review Process.

Process of Human Trials

As of January 31, 2013, for medical study and comparison purpose, the Company has completed a total of 83 successful clinical human trial cases, including 71 cases on ankle fractures and 57 successful PA Binding Wire trial cases. Under SFDA Regulations, a total number of 60 trial cases and 60 comparison cases must be completed before approval is considered. Currently, we have been conducting human trials at the 6 state level hospitals recognized by SFDA for clinical trials in different cities throughout China; including Nanchang, Changsha, Luoyang, Nanning and Tianjin. The cities and provinces where our clinical trial hospitals are based will be the initial target regions on our marketing plan. These regions are both densely populated and have experienced high or above medium economic growth. The clinical trials for the Company’s PA Screws have been completed with 100 percent success rate. The Company is continuously conducting clinical trials on PA Binding Wires.

Government Regulation

Medical implant devices/products manufactured or marketed by the Company in China are subject to extensive regulations by the SFDA. Pursuant to the related laws and acts, as amended, and the regulations promulgated there under (the "SFDA Regulations"), the SFDA regulates the clinical testing, manufacture, labeling, distribution and promotion of medical devices. The SFDA also has the authority to request repair, replacement, or refund of the cost of any device manufactured or distributed by the Company.

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Under the SFDA Regulations, medical devices are classified into three classes (class I, II or III), the basis of the controls deemed necessary by the SFDA to reasonably assure their safety and efficacy. Under the SFDA's regulations, class I devices are subject to general controls (for example, labeling and adherence to Good Manufacturing Practices (“GMP”) requirements) and class II devices are subject to general and special controls. Generally, class III devices are those which must receive premarket approval by the SFDA to ensure their safety and efficacy (for example, life-sustaining, life-supporting and certain implantable devices, or new devices which have not been found substantially equivalent to legally marketed class I or class II devices). The Company is classified as a manufacturer of class III medical devices. Current SFDA enforcement policy prohibits the marketing of approved medical devices for unapproved uses.

Before a new device can be introduced into the market in China, the manufacturer generally must obtain SFDA marketing clearance through clinical trials. Since the Company is classified as a manufacturer of Class III medical devices, the Company must carry out all clinical trials in pre-selected SFDA approved hospitals.

Manufacturers of medical devices for marketing in China are required to adhere to GMP requirements. Enforcement of GMP requirements has increased significantly in the last several years and the SFDA has publicly stated that compliance will be more strictly scrutinized. From time to time the SFDA has made changes to the GMP and other requirements that increase the cost of compliance. Changes in existing laws or requirements or adoption of new laws or requirements could have a material adverse effect on the Company’s business, financial condition and results of operations. There can be no assurance that the Company will not incur significant costs to comply with applicable laws and requirements in the future or that applicable laws and requirements will not have a material adverse effect upon the Company’s business, financial condition and results of operations.

Regulations regarding the development, manufacturing and sale of the Company’s products are subject to change. The Company cannot predict the impact, if any, that such changes might have on its business, financial condition and results of operations.

Results of Operations

The “Results of Operations” discussed in this section merely reflect the information and results of the Company for the period from September 25, 2002 (Shenzhen Changhua’s date of inception) to January 31, 2013.

Revenues

The Company is in its development stage and does not have any revenue. The management team is continuously looking for fundraising possibilities for product improvement, machinery upgrades, facility expansions, continuous research and development, and sales and marketing preparation.

Our facility is located in Shenzhen, China which is built to meet the GMP standards. Our facility covers about 865 square meters, which includes the combined facilities of offices, laboratories, and workshops. There is one production line for the PA Screw and another production line for the PA Binding Wire. The annual production capabilities of each production line are 100,000 pieces for PA Screw, and 240,000 packs for the PA Binding Wires. Both production lines, at their maximum production capacity, are capable of generating approximately USD $30,000,000 in annual revenue.

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Estimate current production lines in full capacity
	Output Quantity (Max.)		Price at ex-factory ($)		Total Turnover ($)
PA Screw	100,000	(piece)	180		18,000,000
PA Binding Wire	240,000	(pack)	50		12,000,000
				Total:	30,000,000

The Company will market its products through a hybrid sales force comprised of a managed network of independent regional distributors/sales agents (80%) and direct sales representatives (20%) in China.

There are two ways the Company will generate revenue, 1) through our nationwide and regional distributors and 2) through our direct sales channels.

China’s Marketing Analysis and Sales Strategy:

We have established long term relationships with many hospitals and national distributors in China. Ms. WANG Hui, the Company's CEO, has over 20 years’ sales experience in medical distribution. She will be in charge of our sales programs. Professor LIU Shangli, our chief medical advisor, is one of the highest ranked orthopedic doctors in China as well as being highly renowned in the rest of the world. He will assist the Company in nationwide product promotion and joint projects with associated academic institutions and medical schools.

During product development and clinical trial stages we developed close relationships with many major national hospitals. We expect these relationships to boost our revenue generation following SFDA final approval. In order to better serve our customers, including hospitals, distributors, patients and the general public, the Company will set up Regional Service Offices to provide technical support, product information, and customer aid service.

China's market for PA devices depends on 3 major conditions:

- Patients

- Advanced technology level

- Performance and price of the materials

The demand for internal fixation medical devices has rapidly increased during the last decade. Total market sales have increased more than 15% each year. There are over 1 million bone fractures in patients in China requiring about 4 million bone bolts/screws each year. Research shows that in the next 10 years, China will have a booming aging population and the population in China will continue to increase. New and improved medical technology will continue to rapidly grow throughout hospitals in China, and material optimization and product pricing is expected to directly stimulate increased sales.

The Company has advantages and more opportunities over other competitors due to:

- No other similar patent registrations in China.

- We are the only company qualified and permitted to perform PA clinical trials by SFDA

- We have a timing advantage over other companies in China which would have to go through the preclinical testing for the SFDA permit on clinical trials.

- Under existing regulations by SFDA, it will take at least 3-5 years for clinical trials.

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Number of Hospitals at the end of July 2012 Statistic and Census report by the Ministry of Health of the People's Republic of China.

Statistic and Census report by the Ministry of Health of the People's Republic of China
(July 2012)

	July 2012		July 2011		Increase / (Decrease)
Total No. of Hospitals		22,665		21,266		1,399
Public Hospital		13,440		13,670		(230	)
Private Hospital		9,225		7,596		1,629
Hospital Rating
AAA		1,476		1,344		132
AA		6,583		6,494		89
A		5,860		5,321		539

In general, technological advancements and the marketing potential within Asia are the biggest factors in driving significant growth within the global orthopedic devices market. Another major factor that positively influences this market is the growing number of aging baby boomers with active lifestyles. This sector represents a large portion of the total population.

Research and Development

The Company has also been conducting research and animal tests on Cranio-Maxillofacial Fracture (CMF) Treatment in cooperation with The First Affiliated Hospital of Guangdong Pharmaceutical University in Guangzhou, China. Under the cooperative agreement, both parties will join efforts in utilizing the Company’s bio-absorbable mini-screws and plates. CMF surgery encompasses the treatment of the face, jaws and skull, including trauma and the correction of facial skeletal deformity. Since the 1980s, titanium plates and screws have been the most commonly used fixation devices in CMF surgery. However concerns of using titanium include bone growth restriction and implant migration through the cranium in children. Also adult patients complain about feeling the metal implants, particularly in cold weather or through thin skin. We believe that utilizing our bio-absorbable mini-screws and plates in CMF surgery will eliminate the problems associated with other treatment types. A separate joint research projects has been setup by the Company and Sichuan University. Both projects are currently under way and the Company has completed the design and production of testing mini-screws using its patented PA material.

The Company has developed six proprietary re-absorbable polymer fixation implant product lines, including screws, pins, tacks, rods and binding wires, which provide an alternative to metal implants and overcome the limitations of first generation re-absorbable fixation devices. The Company’s product range will ultimately cover the full gamut of components featuring self-reinforced, re-absorbable, biodegradable PA macromolecule polymer materials for implantation, including human orthopedic and dental applications, as well as veterinary applications. We expect research and development expenses to grow as we continue to invest in basic and advanced research, clinical trials, product development and in our intellectual property.

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Although there are substantial research and development (R&D) activities within the Company and, the Company regards R&D activity as the key to maintain its technological advantage and innovation, there can be no assurance that the Company will be able to obtain any further clearances or approvals, if required, to market its products for their intended uses on a timely basis, if at all. Moreover, regulatory approvals, if granted, may include significant limitations on the indicated uses for which a product may be marketed. Delays in the receipt of or the failure to obtain such clearances or approvals, the need for additional clearances or approvals, the loss of previously received clearances or approvals, unfavorable limitations or conditions of approval, or the failure to comply with existing or future regulatory requirements could have a material adverse effect on the Company's business, financial condition and results of operations.

ISO 13485:2003 (YY/T 0287-2003) Certification

In December 2012, the Company’s Quality Management System (QMS) has been credited with ISO 13485:2003 certification. The Company’s Quality Management System (QMS) was certified by the Chinese SFDA (Guangdong) to meet YY/T 0287-2003 standard - the Chinese equivalent of ISO 13485:2003. According to the Chinese SFDA regulations, all mainland Chinese medical device manufacturers must establish document, implement and maintain a Quality Management System (QMS). Only the manufacturers with a SFDA certified QMS are allowed to apply for production permits and product registrations.

ISO 13485:2003 specifies requirements for a quality management system where an organization needs to demonstrate its ability to provide medical devices and related services that consistently meet customer requirements and regulatory requirements applicable to medical devices and related services. The primary objective of ISO 13485:2003 is to facilitate harmonized medical device regulatory requirements for quality management systems. As a result, it includes some particular requirements for medical devices and excludes some of the requirements of ISO 9001 that are not appropriate as regulatory requirements. Because of these exclusions, organizations whose quality management systems conform to this International Standard cannot claim conformity to ISO 9001 unless their quality management systems conform to all the requirements of ISO 9001.

While the Company’s facility and laboratory were under renovation in 2012, the Company had been identifying the processes needed for the Quality Management System and their application throughout the organization. The Company has established its quality objectives, the sequence and interaction of the quality management processes and determined the criteria and methods needed to ensure that both the operation and control of these processes are effective. The QMS was considered to have met its objectives and effectiveness after internal analysis and management reviews. The Company submitted its certification request to the SFDA (Guangdong). Having conducted several on-site examinations in late 2012, the SFDA (Guangdong) accredited our QMS with YY/T 0287-2003/ISO 13485:2003. The SFDA certified QMS will enable the Company to manufacture and market its products once they are approved by the SFDA. Furthermore, Quality Management Systems around the world are generally based on ISO 13485; this certification will help the Company to be accredited in other countries in due course.

Finance Costs

As of January 31, 2013 and October 31, 2012, a stockholder and two related parties had loaned a total of $2,069,326 and $1,894,604, respectively to the Company as unsecured loans repayable on demand and interest is charged at 7% per annum on the amount due. Total interest expenses on advances from a stockholder and the related parties accrued for the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) through January 31, 2013 were $30,784, $19,779 and $287,820, respectively.

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As of January 31, 2013 and October 31, 2012, the Company owed $492,996 and $507,395, respectively to the directors for advances made on an unsecured basis, repayable on demand. Total imputed interest expenses on advances from directors, calculated at 5% per annum, recorded as additional paid-in capital amounted to $5,965, $6,610 and $235,456 for the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) through January 31, 2013, respectively.

Net Loss

The net loss attributable to common stockholders the three months ended January 31, 2013 and 2012 and for the period from September 25, 2002 (inception) through January 31, 2013 were $175,261, $199,465 and $3,857,269, respectively. We do not have any revenue from inception to January 31, 2013 but have to incur operating expenses for the upkeep of the Company and the clinical trials.

Liquidity and Capital Resources

We had a working capital deficit of $2,539,052 and $2,369,478 as of January 31, 2013 and October 31, 2012, respectively. Our working capital deficit is due to the fact that we are in the application process for the SFDA permit to produce, market or sell in China. We had no revenues during the period and that our sole source of financing are loans from our related parties and stockholders. Meanwhile, we have been conducting clinical trials for PA Binding Wire.

Cash Flows

Net Cash Used in Operating Activities

Net cash used in operating activities was $156,520 and $129,324 in the three months ended January 31, 2013 and 2012, respectively. This amount was attributable primarily to the net loss after adjustment for non-cash items, such as depreciation, stock issued for services, imputed interest on advances from directors, and others like charges in other receivables and prepaid expenses and other payables and accrued expenses.

Net Cash Used in Investing Activities

We recorded $1,523 and $40,439 net cash used in investing activities in the three months ended January 31, 2013 and 2012, respectively. This amount reflected purchases of property and equipment, primarily for research and development to our facilities.

Net Cash Provided by Financing Activities

Net cash provided by financing activities in the three months ended January 31, 2013 and 2012 was $153,382 and $163,415, respectively, which represented advances from a stockholder and related parties, loan repayments to directors and a stockholder.

Operating Capital and Capital Expenditure Requirements

Our ability to continue as a going concern and support the commercialization of current products is dependent upon our ability to obtain additional financing in the near term. We anticipate that such funding will be in the form of equity financing from sales of our common stock. However, there is no assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our business plan should we decide to proceed. We anticipate continuing to rely on advances from our related parties and stockholders in order to continue to fund our business operations.

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We believe that our existing cash, cash equivalents at January 31, 2013, will be insufficient to meet our cash needs. Our minimum cash requirement for the next 12 months is projected to be $500,000. This amount may increase if we decide to start clinical trials on new products. Once we receive the SFDA permit for our PA Screw, our revenue will cover our expenditures. Otherwise, we will continue to rely on external investments and shareholder's loans to meet our cash needs. The management is actively pursuing additional funding and strategic partners, which will enable the Company to implement our business plan, business strategy, to continue research and development, clinical trials or further development that may arise.

We intend to spend more to support the commercialization of current products and on research and development activities, including new products development, regulatory and compliance, clinical studies, and the enhancement and protection of our intellectual property portfolio.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.

CRITICAL ACCOUNTING POLICIES

The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including but not limited to those related to income taxes and impairment of long-lived assets. We base our estimates on historical experience and on various other assumptions and factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Based on our ongoing review, we plan to adjust to our judgments and estimates where facts and circumstances dictate. Actual results could differ from our estimates.

We believe the following critical accounting policies are important to the portrayal of our financial condition and results and require our management's most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain.

1. Property and equipment

Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, major renewals and betterments are capitalized and expenditures for maintenance and repairs are charged to expense as incurred.

Depreciation is provided on a straight-line basis, less estimated residual value over the assets estimated useful lives. The estimated useful lives of the assets are 5 years.

2. Long-lived assets

In accordance with FASB Codification Topic 360 (ASC Topic 360), “Accounting for the impairment or disposal of Long-Lived Assets", long-lived assets and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted net cash flows related to the long- lived assets. The Company reviews long-lived assets to determine that carrying values are not impaired.

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3. Fair value of financial instruments

4. Income taxes

The Company accounts for income taxes under the FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period included the enactment date.

5. Research and Development

Research and development costs related to both present and future products are expensed as incurred.

6. Foreign currency translation

The reporting currency of the company’s financial statements is the US dollar. The financial statements of the Company’s subsidiary denominated in currencies other than the US dollar are translated into US dollars using the closing rate method. The balance sheet items are translated into US dollars using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the year. All exchange differences are recorded within equity.

RECENT ACCOUNTING PRONOUNCEMENTS

There have been no new accounting pronouncements during the three months ended January 31, 2013, that are of significance or potentially significance, to us.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Our disclosure controls and procedures are designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our principal executive officer and principal financial officer by others within our organization. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of January 31, 2013 to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of January 31, 2013.

Changes in Internal Control

During the most recently completed fiscal quarter, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Currently we are not involved in any pending litigation or legal proceeding.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM4. OTHER INFORMATION

None.

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ITEM 5. EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Exhibit No.		Description

3.1		Articles of Incorporation (1)
3.2		Bylaws (1)
31.1		Section 302 Certification of Chief Executive Officer*
31.2		Section 302 Certification of Chief Financial Officer *
32.1		Section 906 Certification of Chief Executive Officer *
32.2		Section 906 Certification of Chief Financial Officer *
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

_____________

*filed herewith

(1) Incorporated by reference to the Form SB-2 registration statement filed on January 16, 2007.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 25, 2013	By:

		ADVANCED BIOMEDICAL TECHNOLOGIES, INC.

		By:	/s/ Chi Ming YU
			Chi Ming YU, President and Director (Principal Executive Officer)

		By:	/s/ Wang Hui
			Wang Hui, Director and Chief Executive Officer (Controller)

		By:	/s/ Kai GUI
			Kai GUI, Director, Secretary and Chief Financial Officer (Principal Financial Officer)