Advanced Biomed Inc. Commitments Disclosure
15. COMMITMENTS AND CONTINGENCIES
Contingencies
In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Company records contingent liabilities resulting from such claims, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable. In the opinion of management, there were no pending or threatened claims and litigation as of June 30, 2025 and up through October 8, 2025, the issuance date of these consolidated financial statements.
Lease commitment
The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which results in an economic penalty.
The right-of-use assets relate to leases of office premises and a dormitory for employees in the PRC and the laboratory in Taiwan.
The recognized operating lease ROU assets and lease liabilities as follows:
| June 30, 2025 | June 30, 2024 | |||||||
| US$ | US$ | |||||||
| Operating lease ROU asset | 65,399 | 126,740 | ||||||
| June 30, 2025 | June 30, 2024 | |||||||
| US$ | US$ | |||||||
| Operating lease liabilities | ||||||||
| Current portion | 35,811 | 62,211 | ||||||
| Non-current portion | 5,879 | 64,529 | ||||||
| Total | 41,690 | 126,740 | ||||||
As of June 30, 2025, future minimum lease payments under the non-cancellable operating leases are as follows:
| Future payment | US$ | |||
| 2026 | 36,532 | |||
| 2027 | 5,929 | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total future lease payment | 42,461 | |||
| Less: imputed interest | (771 | ) | ||
| Present value of operating lease liabilities | 41,690 | |||
| Operating lease liabilities, current portion | 35,811 | |||
| Operating lease liabilities, non-current portion | 5,879 | |||
The following summarizes other supplemental information about the Company’s operating lease as of June 30, 2025:
| Weighted average discount rate | 3.40 | % | ||
| Weighted average remaining lease term (years) | 1.15 |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.