Edgar Filing: Advanced Biomedical Technologies Inc.

advancedbio-10q_043011.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

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

	For the quarter ended April 30, 2011

	OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE 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 x 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 o

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	¨	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	x

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

As of June 17, 2011, there are 56,474,850 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.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying condensed unaudited financial statements of Advanced BioMedical Technologies, Inc., formerly known as Geostar Mineral Corporation, 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, 2010 included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 15, 2011. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed financial statements for the period ended April 30, 2011 are not necessarily indicative of the operating results that may be expected for the full year ending October 31, 2011.

ADVANCED BIOMEDICAL TECHNOLOGIES, INC.

AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF APRIL 30, 2011

(UNAUDITED)

ADVANCED BIOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONTENTS

Pages


Condensed Consolidated Balance Sheets as of April 30, 2011 (unaudited) and October 31, 2010	F-1

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended April 30, 2011 and 2010 (unaudited) and the period from inception September 25, 2002 through April 30, 2011 (unaudited)	F-2

Condensed Consolidated Statements of Stockholders’ Deficit for the period from inception September 25, 2002 through April 30, 2011 (unaudited)	F-3

Condensed Consolidated Statements of Cash Flows for the six months ended April 30, 2011 and 2010 (unaudited) and the period from inception September 25, 2002 through April 30, 2011 (unaudited)	F-4


Notes to Condensed Consolidated Financial Statements (unaudited)	F-5 - F-7

ADVANCED BIOMEDICAL TECHNOLOGIES, INC. ("ABMT")
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS


ASSETS
	April 30,			October 31,
	2011			2010
	Unaudited

CURRENT ASSETS
Cash and cash equivalents	$	33,695		$	38,614
Government grants receivable		244,479			-
Other receivables and prepaid expenses		13,556			12,623
Total Current Assets		291,730			51,237

PROPERTY AND EQUIPMENT, NET		48,104			49,461
TOTAL ASSETS	$	339,834		$	100,698

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Other payables and accrued expenses	$	24,704		$	25,711
Due to a stockholder		113,025			217,951
Due to directors		147,815			158,941
Due to a related company		411,402			400,192
Due to related parties		864,933			788,400
Total Current Liabilities		1,561,879			1,591,195


COMMITMENTS AND CONTINGENCIES		-			-

DEFICIT
ABMT Stockholders' Deficit
Common stock, $0.00001 par value, 100,000,000 shares
authorized, 56,374,850 and 56,144,850 shares
issued and outstanding as of April 30, 2011 and October 31, 2010		564			562
Common stock, 230,000 shares to be issued		-			2
Stock subscription receivable		-			(230,000	)
Additional paid-in capital		1,508,172			1,494,551
Deferred stock compensation		(80,208	)		(206,459	)
Accumulated deficit during development stage		(2,502,662	)		(2,436,044	)
Accumulated other comprehensive loss		(147,911	)		(113,109	)
Total ABMT Stockholders' Deficit		(1,222,045	)		(1,490,497	)

Noncontrolling interests		-			-
Total Deficit		(1,222,045	)		(1,490,497	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	339,834		$	100,698


The accompanying notes are an integral part of these condensed consolidated financial statements

F-1

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

	(UNAUDITED)
	Three months ended						Six months ended						September 25, 2002
	April 30,						April 30,						(Inception) through
	2011			2010			2011			2010			April 30, 2011

OPERATING EXPENSES
General and administrative expenses	$	139,358		$	112,600		$	265,211		$	257,200		$	2,247,580
Depreciation		1,285			7,387			2,593			14,839			263,963
Research and development (Net of
government grant)		-			-			30			1,840			119,063
Total Operating Expenses		140,643			119,987			267,834			273,879			2,630,606

LOSS FROM OPERATIONS		(140,643	)		(119,987	)		(267,834	)		(273,879	)		(2,630,606	)

OTHER INCOME (EXPENSES)
Government grants		244,479			-			244,479			-			244,479
Interest income		12			23			36			36			1,637
Interest paid to a stockholder
and related parties		(14,612	)		(15,698	)		(29,438	)		(28,529	)		(129,833	)
Imputed interest		(6,781	)		(6,673	)		(13,621	)		(14,061	)		(190,705	)
Other income (expenses)		(519	)		(2,494	)		(240	)		(2,787	)		(14,839	)
Total Other Income (Expenses), net		222,579			(24,842	)		201,216			(45,341	)		(89,261	)

INCOME (LOSS) FROM OPERATIONS BEFORE TAXES		81,936			(144,829	)		(66,618	)		(319,220	)		(2,719,867	)
Income tax expense		-			-			-			-			-
NET INCOME (LOSS)		81,936			(144,829	)		(66,618	)		(319,220	)		(2,719,867	)
Net loss attributable to noncontrolling interests		-			-			-			-			217,205
NET INCOME (LOSS) ATTRIBUTABLE TO ABMT
COMMON STOCKHOLDERS		81,936			(144,829	)		(66,618	)		(319,220	)		(2,502,662	)

OTHER COMPREHENSIVE LOSS
Total other comprehensive loss		(17,946	)		(158	)		(34,802	)		(114	)		(147,911	)
Add: foreign currency translation loss
attributable to noncontrolling interest		-			-			-			-			-
Foreign currency translation loss
attributable to ABMT common stockholders		(17,946	)		(158	)		(34,802	)		(114	)		(147,911	)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE
TO ABMT COMMON STOCKHOLDERS	$	63,990		$	(144,987	)	$	(101,420	)	$	(319,334	)	$	(2,650,573	)

Net income (loss) per share-basic and diluted	$	0.00		$	(0.00	)	$	(0.00	)	$	(0.01	)

Weighted average number of shares
outstanding during the period
- basic and diluted		56,374,850			55,732,159			56,374,850			55,775,130


The accompanying notes are an integral part of these condensed consolidated financial statements


F-2

ADVANCED BIOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (UNAUDITED)


																				Accumulated			Accumulated
	Common Stock				Shares to be issued						Stock			Additional			Deferred			deficit during			other
	Number							Number of			subscriptions			Paid-in			Stock			development			comprehensive			Noncontrolling
	of Shares		Amount		Shares			Amount			receivable			capital			Compensation			stage			loss			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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(57,848	)

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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(94,584	)

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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(521,459	)

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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(199,174	)

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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(224,272	)

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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(262,871	)

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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(560,288	)

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	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(845,862	)
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			-			-			-			-			-			230,000

Imputed interest on advances from a stockholder and related company		-		-		-			-			-			13,621			-			-			-			-			13,621

Amortisation for stock issued for services		-		-		-			-			-			-			126,251			-			-			-			126,251

Net loss for the period		-		-		-			-			-			-			-			(66,618	)		-			-			(66,618	)

Foreign currency translation loss		-		-		-			-			-			-			-			-			(34,802	)		-			(34,802	)

Comprehensive loss		-		-		-			-			-			-			-			-			-			-			(101,420	)
Balance at April 30, 2011		56,374,850	$	564		-		$	-		$	-		$	1,508,172		$	(80,208	)	$	(2,502,662	)	$	(147,911	)	$	-		$	(1,222,045	)


The accompanying notes are an integral part of these condensed consolidated financial statements

F-3

ADVANCED BIOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six months ended						September 25, 2002
	April 30,						(inception) through
	2011			2010			April 30, 2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(66,618	)	$	(319,220	)	$	(2,502,662	)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation		2,593			14,839			263,963
Loss on disposal of fixed assets		-			-			5,328
Stock issued for services		126,251			76,250			488,475
Noncontrolling interests		-			-			(217,205	)
Imputed interest		13,621			14,061			190,705
Changes in operating assets and liabilities
(Increase) decrease in:
Government grants receivable		(244,479	)		-			(244,479	)
Other receivables and prepaid expenses		(571	)		(2,252	)		(13,556	)
Increase (decrease) in:
Other payables and accrued expenses		(1,120	)		(15,232	)		24,704
Net cash used in operating activities		(170,323	)		(231,554	)		(2,004,727	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			(4,389	)		(317,395	)
Net cash used in investing activities		-			(4,389	)		(317,395	)

CASH FLOWS FROM FINANCING ACTIVITIES
Stock issued to founders		-			-			505
Proceeds from issuance of shares		230,000			240,250			478,300
Contribution by stockholders		-			-			519,157
Distributed to stockholders		-			-			(31,409	)
Due to a stockholder		(104,855	)		(131,411	)		113,025
Due to directors		(15,043	)		(47,727	)		147,815
Due to a related company		-			-			411,402
Due to related parties		53,769			213,907			864,933
Net cash provided by financing activities		163,871			275,019			2,503,728

EFFECT ON EXCHANGE RATES ON CASH		1,533			(8	)		(147,911	)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(4,919	)		39,068			33,695

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		38,614			10,606			-

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	33,695		$	49,674		$	33,695




The accompanying notes are an integral part of these condensed consolidated financial statements

F-4

ADVANCED BIOMEDICALTECHNOLOGIES, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 BASIS OF PRESENTATION

The accompanying unaudited condensed 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 condensed consolidated financial statements contain all adjustments consisting only of normal recurring accruals considered necessary to present fairly the Company's financial position as of April 30, 2011, the consolidated results of operations for the three and six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) to April 30, 2011 and consolidated statements of cash flows for the six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) to April 30, 2011. The consolidated results for the three and six months ended April 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year ending October 31, 2011. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes for the year ended October 31, 2010 appearing in the Company's annual report on Form 10-K as filed with the Securities and Exchange Commission on February 15, 2011.

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 for the three months and six months ended April 30, 2011 and 2010 were included in the consolidated financial statements as if the transactions had occurred retroactively.

F-5

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.

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 subsidiaries, 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 generally accepted accounting principles 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 GOVERNMENT GRANTS

Government grants are recognized when there is reasonable assurance that the Company complies with any conditions attached to them and the grants will be received.

In April 2011, the Company was informed of approval of one grant totaling $244,479 under the Qualified Therapeutic Discovery Project Grants Program. The Qualified Therapeutic Discovery Project Grants Program was included in the healthcare reform legislation, and established a one-time pool of $1 billion for grants to small biotechnology companies developing novel therapeutics which show potential to: (a) result in new therapies that either treat areas of unmet medical need, or prevent, detect, or treat chronic or acute diseases and conditions; (b) reduce long-term health care costs in the United States; or (c) significantly advance the goal of curing cancer within a the 30-year period. The grant was received on May 6, 2011. There are no matching funding requirements or other requirements necessary to receive the funding.

F-6

NOTE 6 RELATED PARTY TRANSACTIONS

As of April 30, 2011, the Company owed a stockholder $113,025 which is unsecured and repayable on demand. Interest is charged at 7% per annum on the amount owed.

As of April 30, 2011, the Company owed two related parties a total of $864,933 which is unsecured and repayable on demand. Interests are charged at 7% per annum on the amount owed.

Total interest expenses on advances from a stockholder and the related parties accrued for the three and six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) through April 30, 2011 were $14,612, $15,698, $29,438, $28,529 and $129,833 respectively.

As of April 30, 2011, the Company owed $147,815 to three directors for advances made on an unsecured basis, repayable on demand and interest free.

As of April 30, 2011, the Company owed $411,402 to a related company 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 $6,781, $6,673, $13,621, $14,061 and $190,705 for the three and six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) through April 30, 2011 respectively.

NOTE 7 STOCKHOLDERS’ EQUITY

For the three and six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) through April 30, 2011, the Company recognized $63,125, $38,125, 126,251, $76,250 and $488,475 respectively as amortization of deferred stock compensation and are included in general and administrative expenses as consultancy fees. Deferred stock compensation for consultancy services carried forward as of April 30, 2011 and October 31, 2010 amounted to $80,208 and $206,459 respectively.

NOTE 8 RECENT ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The amendments in this ASU generally represent clarification of Topic 820, but also include instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This update results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards (“IFRS”). The amendments are effective for interim and annual periods beginning after December 15, 2011 and are to be applied prospectively. Early application is not permitted. The Company does not expect the adoption of ASU 2011-04 will have a material impact on the Company’s Condensed Consolidated Financial Statements.

NOTE 9 GOING CONCERN

As reflected in the accompanying unaudited condensed financial statements, the Company has an accumulated deficit of $2,502,662 at April 30, 2011 that includes a net loss of $66,618 for the six months ended April 30, 2011. As at April 30, 2011, the Company’s total current liabilities exceeded its total current assets by $1,270,149 and the Company used cash in operations of $170,323 for the six 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 condensed 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.

F-7

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 annual 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 15, 2011.

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 which include orthopedic trauma, sports related medical treatment, or cartilage injuries. 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:

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 April 30, 2011, we have completed all additional clinical trials required by the SFDA. The Company’s SFDA application process will be resumed once the additional and supplementary reports are submitted to the SFDA. We expect the final SFDA approval by the end of 2011.

Furthermore, we anticipate that following the SFDA final approval, the Company should be earning revenues as early as the fourth quarter of 2011. The Company is also looking forward to starting the application process for the PA Biding Wires with the SFDA by the end of 2011 provided sufficient funding is in place.

Process of Human Trials

As of April 30, 2011, 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.

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.

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.

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.

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 April 30, 2011.

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.

Estimate current production lines in full capacity
	Output Quantity (Max.)	Price at ex-factory (U$)		Total Turnover (U$)
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.

Marketing and Sales Goals:

1) Fourth quarter of 2011: forecasted revenue of $665,280; Distribution of our product in approximately 50 hospitals immediately following SFDA approval.

2) First quarter of 2012: forecasted revenue of $914,980; Distribution of our product in approximately 78 hospitals.

3) Second quarter of 2012: forecasted revenue of $1,307,920; Distribution of our product in approximately 126 hospitals.

4) Third quarter of 2012: forecasted revenue of $2,596,560; Distribution of our product in approximately 210 hospitals.

5) Fourth quarter of 2012: forecasted revenue of $4,022,870; Distribution of our product in approximately 356 hospitals.

In general, we estimate that the Company will distribute product to a total of 50 hospitals and expect to generate total revenues of $665,280 in the year 2011 and $8,842,330 in the year 2012. We also expect a continuous increase of affiliated hospitals and anticipate large increases in revenue due to marketing results of the PA Screw in China and the utilization of the Company's secured funding to bring the remaining family of self-reinforced, re-absorbable PA products to market. Our marketing and sales goals are based on fund availability for the past two years. We expect to achieve a much higher growth rate in terms of number of affiliated hospitals and revenue when adequate funds become available.

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 others 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.

Number of Hospitals in China in year 2009 Statistic and Census report by Ministry of Health of People's Republic of China.

Statistic and Census report by Ministry of Health of People's Republic of China.
(Year 2009)
					Total	Total
	Total	Government	Society	Private	Non-Profit	Profit
Hospitals	19712	9777	6048	3887	15650	4038
General Hospital	13119	5830	5060	2229	10856	2245
TCM Hospital	2688	2244	158	286	2403	285
TCM-WM Hospital	236	96	48	92	139	97
Minority Hospital	191	170	8	13	175	16
Specialist Hospital	3437	1422	763	1252	2048	1383
Nursing Hospital	41	15	11	15	29	12

TCM Hospital: Traditional Chinese Medicine Hospital
WM Hospital: Western Medicine Hospital
Minority Hospital: The hospitals locate in Autonomous Region (Province) in China

By the end of year 2011, we anticipate that there will be over 50 hospitals carrying our products, and by the end of year 2017, we estimate that our products will reach over 1500 hospitals. Based on the estimated sales figures for one single product, PA Screw, the Company's projected annual revenue in 2017 would be $64,800,000.

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

There is substantial research and development (R&D) activity in the market indicating a favorable growth trend. While revenues for active lifestyle participants registered a compound annual growth rate (CAGR) of 17.4 percent for the period 2002-2006; R&D expenditure for the same period recorded a higher growth of 18.4 percent. Increasing R&D expenditure is considered a key indicator of the future direction of the orthopedic market as it points to sustained technological development and innovation.

The Company believes that Asia holds tremendous growth potential for orthopedic device manufacturers due to its fundamental population advantage. Asia accounts for more than 50 percent of the population in the world, but its share of the global orthopedic devices market is comparatively low at approximately 10 percent. Within the region, Japan contributes to a majority of market revenues, indicating large potential for growth in relatively under-penetrated countries such as China and India.

In future periods, we expect research and development expenses to grow as we continue to invest in basic research, clinical trials, product development and in our intellectual property.

U.S. Government Grant

In April 2011, the Company received approval of one grant totalling $244,479.25 awarded to the Company under the U.S. Government’s Qualifying Therapeutic Discovery Project, a program created as part of the Patient Protection and Affordable Care Act of 2010. The grant is to support the ongoing development of bio-absorbable internal fixation devices, the Company's novel treatment for orthopaedic trauma. The grant was received in May 2011 in full.

The Qualifying Therapeutic Discovery Project grants are provided under new section 48D of the Internal Revenue Code (IRC), enacted as part of the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148). The IRS, in conjunction with the Department of Health and Human Services, approved applications for projects that showed significant potential to produce new and cost-saving therapies, support jobs and increase U.S. competitiveness under the Qualifying Therapeutic Discovery Project program. Only projects that show a reasonable potential to meet these goals were certified as eligible for the credit or grant.

Finance Costs

As of April 30, 2011, a stockholder and two related parties had loaned a total of $977,958 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 and six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) through April 30, 2011 are $14,612, $15,698, $29,438, 28,529 and $129,833 respectively

As of April 30, 2011, the Company owed $559,217 to the directors and a related company for advances made on an unsecured basis, repayable on demand. Total imputed interest expenses, calculated at 5% per annum, recorded as additional paid-in capital amounted to $6,781, $6,673, $13,621, $14,061 and $190,705 for the three and six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) through April 30, 2011, respectively.

	Three months ended				Six months ended				September 25, 2002
	April 30,				April 30,				(Inception) through
	2011		2010		2011		2010		April 30, 2011

Interest paid to directors and a related company	$	(6,781)		(6,673)		(13,621)		(14,061)		(190,705)

Net Income (Loss)

The net income (loss) for the three and six months ended April 30, 2011 and 2010 and for the period from September 25, 2002 (inception) through April 30, 2011 are $81,936, ($144,829), ($66,618), ($319,220) and ($2,719,867) respectively. We do not have any revenue from inception to April 30, 2011 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 $1,270,149 as of April 30, 2011 compared to a working capital deficit of $1,539,958 as of October 31, 2010. 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 $170,323 in the six months ended April 30, 2011. This amount was attributable primarily to the net loss after adjustment for non-cash items, such as depreciation, imputed interest on advances from directors and a related company, and others like decrease in other receivables and prepaid expenses.

Net Cash Used in Investing Activities.

We recorded zero net cash used in investing activities in the six months ended April 30, 2011. 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 six months ended April 30, 2011 was $163,871, which represented advances from related parties, loan repayment to related parties and proceeds from issuance of 230,000 shares for private placement.

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

We believe that our existing cash, cash equivalents at April 30, 2011, will be insufficient 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.


3.		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, due from related parties, other payables and accrued liabilities and due to 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.

4.		Government grants

		Government grants are recognized when there is reasonable assurance that the Company complies with any conditions attached to them and the grants will be received.

5.		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.

6.		Research and Development

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

7.		Foreign currency translation

		The financial statements of the Company’s subsidiary denominated in currencies other than US dollars 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

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 maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this quarterly report on From 10-Q (the “Evaluation Date”). Our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching our desired disclosure control objectives. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our certifying officers have concluded that our disclosure controls and procedures require additional diligence to be considered effective in reaching that level of assurance.

As of the Evaluation Date, we carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that with the additional controls and procedures we have put in place, our disclosure controls and procedures were effective as of the Evaluation Date.

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.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

ITEM 6. 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 *

*filed herewith

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

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.

June 20, 2011	By:
		ADVANCED BIOMEDICAL TECHNOLOGIES, INC.

		By:	/s/Chi Ming YU
			Chi Ming YU, President and Director


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


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