[Edaily Reporter YU JIN-HEE ] ADBIOTECH Co.,Ltd.(179530), a KOSDAQ-listed company that had been seeking to improve its corporate structure through management restructuring and business diversification, has become embroiled in a legal dispute. Hwang Man-hoe, CEO of ADBIOTECH Co.,Ltd.—a company specializing in veterinary antibodies—has been criminally charged by a biotech startup with which he had a business partnership.

M20: “Inflated Stock Price via Press Releases and IR Materials Containing Unagreed-Upon Content, Then Neglected Contract”

According to sources in the pharmaceutical, biotech, and legal communities on the 10th, smart healthcare company M20 recently filed a criminal complaint with the Chuncheon Police Station against CEO Hwang on charges of fraud and obstruction of business under the Criminal Act. The key issue is whether the two companies fulfilled the Memorandum of Understanding (MOU) for new business and the joint development agreement they signed last August.

Official cooperation between the two companies began on August 27. ADBIOTECH Co.,Ltd. signed a memorandum of understanding (MOU) with M20 to commercialize products based on medium- and low-frequency composite stimulation technology and expand into domestic and international markets. The contract term is 60 months. The framework of the agreement involves ADBIOTECH Co.,Ltd. investing research and development (R&D) funds into M20’s digital healthcare pipeline. A payment agreement totaling 1.3 billion won was signed, including a 500 million won deposit for the exclusive domestic and international distribution rights to M20’s “MayoPet”—a medium- and low-frequency healthcare and rehabilitation DEVICE for pets—as well as 800 million won for clinical trial costs.

During the initial negotiations, a phased funding schedule—including an initial payment of 200 million won—was agreed upon. The agreement stipulated that ADBIOTECH Co.,Ltd. would support the clinical trial costs for devices being developed by M20, such as a device to address muscle loss—a side effect of glucagon-like peptide-1 (GLP-1) obesity treatments—a growth plate stimulator, and a device to treat sarcopenia in individuals aged 65 and older. It was agreed that the intellectual property (IP) rights acquired as a result of successful clinical trials would be jointly owned by both companies, each holding a 50% stake.

However, three months have passed since the contract was signed, and to date, ADBIOTECH Co.,Ltd. has not paid M20 a single won. Immediately after signing the contract, M20 began preparing for clinical trials and manufacturing the devices in collaboration with relevant institutions, including Konkuk University Hospital. However, the company maintains that it has been left to bear the full brunt of the development costs incurred due to ADBIOTECH Co.,Ltd.’s failure to provide financial support. In fact, in accordance with an agreement between the two companies, M20 covered the entire 50 million won production cost for the DEVICE intended for human clinical trials using its own funds. On September 11, M20 sent a certified letter to ADBIOTECH Co.,Ltd. urging payment of the agreed-upon amount, but the funds were never disbursed.

M20 believes that ADBIOTECH Co.,Ltd., despite lacking the financial capacity or intention to fulfill the contract, used M20’s technology to inflate its stock price and then neglected the agreement. Article 178 of the Capital Markets Act strictly prohibits the use of fraudulent means or tactics in connection with the trading of financial investment products, as well as making false statements or causing misunderstandings regarding material facts.

M20 pointed out the content of a press release distributed on August 28, immediately after the signing of the business agreement. The press release included details regarding the review of “equity investment and mergers and acquisitions” (M&A), even though the two companies had not yet reached a final agreement. It also contained a wide range of unspecified plans, such as joint entry into the U.S. market and the development of healthcare devices for large animals.

In fact, on the very day the news of the business agreement broke, ADBIOTECH Co.,Ltd.’s stock price on the KOSDAQ market closed 8.66% higher than the previous day. Trading volume for that single day surged by approximately 764% compared to usual levels. Furthermore, an investment proposal for convertible bonds (CBs) that ADBIOTECH Co.,Ltd. drafted without prior consultation with M20 has sparked controversy. The document contained statements such as “a contract worth 800 million won is already being executed” and “the contract has entered the actual execution phase”—regarding a contract for which not even 1 won had been disbursed. It also included detailed business information, such as M20’s shareholder structure and revenue targets.

An M20 official stated, “A listed company that lacked the financial capacity to fulfill its obligations publicly exaggerated its blueprint for a new business to induce buying momentum in the market,” adding, “This caused harm to the partner venture companies in the form of actual clinical cost burdens and development delays.”

ADBIOTECH Co.,Ltd. Categorically Denies Allegations: “No Intent to Violate the Capital Markets Act”

In contrast, ADBIOTECH Co.,Ltd. has categorically denied allegations of fraud or violations of the Capital Markets Act. The company explains that there was absolutely no intent to intentionally deceive or artificially manipulate stock prices.

An ADBIOTECH Co.,Ltd. official clarified, “There is absolutely no record of stock trading by our executives or major shareholders, either before or after the contract,” adding, “The view that we entered into a false contract for the purpose of propping up the stock price is contrary to the facts.”

The two sides’ explanations also clash sharply regarding the cause of the non-payment. In a certified letter sent through its legal counsel, ADBIOTECH Co.,Ltd. cited M20’s complete capital impairment and financial crisis as the primary reasons for terminating the contract.

ADBIOTECH Co.,Ltd. stated, “During the detailed review process following the signing of the contract, we confirmed M20’s financial soundness and its state of complete capital impairment,” adding, “Under these circumstances, there were legal and procedural difficulties in disbursing a large sum of funds as planned.”

They continued, “At the time, our company also faced tight liquidity conditions due to delays in the convertible bond financing schedule,” adding, “Given M20’s financial condition, it is difficult to fulfill the original contract terms as written, and we may need to reevaluate certain business operations within the scope that ensures business viability.”

M20 countered that ADBIOTECH Co.,Ltd.’s explanation was nothing more than an excuse fabricated after the fact. They claimed that they had provided ADBIOTECH Co.,Ltd. with investor relations (IR) materials and financial statements on three separate occasions prior to signing the contract.

M20 emphasized, “We conducted an investor relations (IR) presentation when CEO Hwang visited our company in person on August 10, and subsequently provided all 2025 financial statements and articles of incorporation,” adding, “We had entered into the contract and even completed external publicity after fully understanding the other party’s financial situation.”

They further countered, “It is contradictory to belatedly raise concerns about the startup’s financial condition—which they were already aware of—in order to evade payment obligations that arose immediately after the contract was signed.” Regarding the certified letter sent in September, they stated, “Although it was an official letter urging the company to fulfill its obligations in good faith, ADBIOTECH Co.,Ltd. dismissed it as a mere formality and dragged its feet.”

This lawsuit has dealt a significant blow to ADBIOTECH Co.,Ltd.’s corporate image and its momentum for pursuing new business ventures. ADBIOTECH Co.,Ltd. has been pursuing a growth strategy aimed at expanding beyond its business structure centered on immune antibodies for livestock and aquaculture into areas such as human healthcare and beauty devices.

The plan was to create synergy by combining its animal antibody R&D foundation with low-to-medium frequency technology. However, as the legal dispute with a key partner has come to light, the stalling of the low-to-medium frequency medical device and obesity treatment-related businesses—which were presented as new growth engines—has become inevitable. If the investigation by law enforcement agencies gains momentum, it is expected to weigh on the company’s credibility and future efforts to raise additional capital.

ADBIOTECH Co.,Ltd. plans to appoint legal counsel to respond to the investigation. A company official stated, “We are closely reviewing the facts and legal issues surrounding the complaint, both before and after the contract was signed,” adding, “We will diligently engage in the legal proceedings to clarify the facts.”