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What changed in INTELLIGENT BIO SOLUTIONS INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INTELLIGENT BIO SOLUTIONS INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+365 added−529 removedSource: 10-K (2024-09-18) vs 10-K (2023-08-23)

Top changes in INTELLIGENT BIO SOLUTIONS INC.'s 2024 10-K

365 paragraphs added · 529 removed · 271 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

75 edited+27 added−173 removed50 unchanged
Biggest changeThe COV2 Products only include products that are supplied by an “Authorized Supplier,” meaning, by us, the Licensor, any of our affiliates or any affiliates of the Licensor, or any third-party manufacturer and/or reseller that the Licensor has expressly identified or approved in advance in writing for the purpose of quality control for the supply of COV2 Products to us. 21 Pursuant to the COV2 License Agreement, the Licensor granted to us an exclusive license to the Licensor’s proprietary rights to the biosensor technology used in the COV2 Products, worldwide and solely to: ● act as the authorized party for the purpose of prosecuting the application of, and obtaining any, regulatory approval for the COV2 Products, including being authorized to prosecute the approval for an investigational device required for the purpose of carrying out clinical studies; ● manufacture, promote, market, import, offer, sell and distribute the COV2 Products; ● provide reasonable customer support services on the use of the COV2 Products to end users of, and health care practitioners referring end users to, the COV2 Products; ● use the COV2 Products only for the purposes identified and permitted pursuant to regulatory approval; and ● collect data acquired from the COV2 Products.
Biggest changeAs a result of the significant global progress made in mitigating the severity of the COVID-19 pandemic and the significantly diminished demand for COVID-19 testing products, we have redirected our resources and efforts away from developing products related to COVID testing to instead acquire and develop drug testing and screening systems, notwithstanding the license held by us under the COV2 License Agreement. 14 Pursuant to the COV2 License Agreement, the Licensor granted to us an exclusive license to the Licensor’s proprietary rights to the biosensor technology used in the COV2 Products, worldwide and solely to: ● act as the authorized party for the purpose of prosecuting the application of, and obtaining any, regulatory approval for the COV2 Products, including being authorized to prosecute the approval for an investigational device required for the purpose of carrying out clinical studies; ● manufacture, promote, market, import, offer, sell and distribute the COV2 Products; ● provide reasonable customer support services on the use of the COV2 Products to end users of, and health care practitioners referring end users to, the COV2 Products; ● use the COV2 Products only for the purposes identified and permitted pursuant to regulatory approval; and ● collect data acquired from the COV2 Products.
For example, the potential exists use the technology to detect biomarkers of health and disease and provide non-invasive monitoring of therapeutic drug levels via fingerprint analysis. IFP is also researching a pipeline of development projects with the vision that fingerprint-based diagnostic tests could provide rapid health/disease triage and wellness tests, meeting the requirements of a post-covid medical diagnostics world.
For example, the potential exists to use the technology to detect biomarkers of health and disease and provide non-invasive monitoring of therapeutic drug levels via fingerprint analysis. IFP is also researching a pipeline of development projects with the vision that fingerprint-based diagnostic tests could provide rapid health/disease triage and wellness tests, meeting the requirements of a post-COVID medical diagnostics world.
In addition to above, we have 50% equity interest in BiosensX (North America) Inc., which has a separate technology license agreement with the Licensor covering glucose/diabetes management field in the North America Territory.
In addition to the above, we have a 50% equity interest in BiosensX (North America) Inc., which has a separate technology license agreement with the Licensor covering glucose/diabetes management field in the North America Territory.
The “Licensed Products” are products consisting of a biosensor strip and smart device application or dedicated reader device that use the biosensor technology owned by the Licensor relating to measuring, or otherwise determining, the amount or concentration of glucose, and the existence of biological markers of cancer, allergy/immunology and hormones, in a bodily fluid.
The “Licensed Products” are products consisting of a biosensor strip and smart device application or dedicated reader device that use the biosensor technology owned by the Licensor relating to measuring, or otherwise determining, the amount or concentration of glucose, the existence of biological markers of cancer, allergy/immunology and hormones, in a bodily fluid.
The Company intends to develop pathways into areas of medical diagnostics utilizing existing technology and techniques to exploit a competitive advantage against traditional testing methodologies. 11 Intellectual Property The following patents are owned by IFP. Patent Families Primary Patent Families - technologies that are either used in the commercial products or closely related to the commercial products.
The Company intends to develop pathways into areas of medical diagnostics utilizing existing technology and techniques to exploit a competitive advantage against traditional testing methodologies. Intellectual Property The following patents are owned by IFP. Patent Families Primary Patent Families - technologies that are either used in the commercial products or closely related to the commercial products.
Our current and future business has been and will continue to be, subject to a variety of laws globally regarding quality, safety and efficacy, and governing, among other things, clinical evaluations, marketing authorization, commercial sales and distribution of our products. Internationally, various regulatory bodies monitor and supervise the administration of pharmaceutical products and medical devices and equipment.
Its current and future business has been and will continue to be subject to a variety of laws globally regarding quality, safety, efficacy, and governing, among other things, clinical evaluations, marketing authorization, commercial sales, and distribution of our products. Internationally, various regulatory bodies monitor and supervise the administration of pharmaceutical products and medical devices and equipment.
In contrast, the collection of urine and oral fluid samples can take several hours and requires trained collectors. Collection areas must be specially prepared, and sample collection should be observed directly to avoid cheating tests. This is highly invasive and undignified, particularly in the case of urine. 2.
In contrast, the collection of urine and oral fluid samples can take several hours and requires trained collectors. Collection areas must be specially prepared, and sample collection should be observed directly to avoid cheating tests. This is highly invasive, particularly in the case of urine. 2.
The Recreational Drug Monitoring Industry There are four principal categories of recreational drugs - analgesics, depressants, stimulants, and hallucinogens. Analgesics include narcotics like heroin, morphine, fentanyl, and codeine. Depressants include alcohol, barbiturates, tranquilizers, and nicotine. Stimulants include cocaine, methamphetamine, and ecstasy (MDMA).
The Recreational Drug Industry There are four principal categories of recreational drugs - analgesics, depressants, stimulants, and hallucinogens. Analgesics include narcotics like heroin, morphine, fentanyl, and codeine. Depressants include alcohol, barbiturates, tranquilizers, and nicotine. Stimulants include cocaine, methamphetamine, and ecstasy (MDMA).
The Intelligent Fingerprinting Drug Screening System consists of a small, tamper-evident drug screening cartridge that collects ten fingerprint sweat samples, which are then analyzed in a portable handheld reader for precise on-screen results in minutes. This system eliminates the need for invasive and unpleasant urine, saliva, or blood collection to test for substance abuse.
The Intelligent Fingerprinting Drug Screening System consists of a small, tamper-evident drug screening cartridge that collects ten fingerprint sweat samples, which are then analyzed in a portable handheld reader for precise on-screen results in minutes. This system eliminates the need for invasive urine, saliva, or blood collection to test for substance abuse.
The patents listed above cover virtually all aspects of fingerprint diagnostics including: chemistry, screening cartridge technology, collection cartridge technology, fingerprint quantitation, fingerprint controlled medication dispenser, lab testing of fingerprints, accessories, and lateral flow test strip reader. 13 Competition IFP has developed a Point of Care (POC) drug screening test system and a drug laboratory-based confirmation testing service.
The patents listed above cover virtually all aspects of fingerprint diagnostics including chemistry, screening cartridge technology, collection cartridge technology, fingerprint quantitation, fingerprint controlled medication dispenser, lab testing of fingerprints, accessories, and lateral flow test strip reader. 10 Competition IFP has developed a Point of Care (POC) drug screening test system and a drug laboratory-based confirmation testing service.
The below table compares the IFP System to other drug testing systems: 14 The IFP System eliminates the need for highly trained technicians or personal protective equipment, providing a non-invasive and objective testing experience. Its unique 16-hour detection window makes it ideal for assessing an individual’s fitness for work at the time of testing.
The below table compares the IFP System to other drug testing systems: 11 The IFP System eliminates the need for highly trained technicians or personal protective equipment, providing a non-invasive and objective testing experience. Its unique 16-hour detection window makes it ideal for assessing an individual’s fitness for work at the time of testing.
Pursuant to the SGT License Agreement, the Licensor granted to us an exclusive license to the Licensor’s proprietary rights to the biosensor technology used in the Licensed Products, solely in the APAC Region and solely to: ● act as the authorized party for the purpose of prosecuting the application of, and obtaining any, regulatory approval for the Licensed Product, including being authorized to prosecute the approval for an investigational device required for the purpose of carrying out clinical studies; ● manufacture, promote, market, import, offer, sell and distribute the Licensed Products; ● provide reasonable customer support services on the use of the Licensed Products to end users of, and health care practitioners referring end users to, the Licensed Products; ● use the Licensed Products only for the purposes identified and permitted pursuant to regulatory approval; and ● collect data acquired from the Licensed Products 20 The license is non-transferable, non-assignable and non-sublicensable, except that the Licensor will in good faith consider any request by us for any sublicense.
Pursuant to the BPT License Agreement, the Licensor granted to us an exclusive license to the Licensor’s proprietary rights to the biosensor technology used in the Licensed Products, solely in the APAC Region and solely to: ● act as the authorized party for the purpose of prosecuting the application of, and obtaining any, regulatory approval for the Licensed Product, including being authorized to prosecute the approval for an investigational device required for the purpose of carrying out clinical studies; ● manufacture, promote, market, import, offer, sell and distribute the Licensed Products; ● provide reasonable customer support services on the use of the Licensed Products to end users of, and health care practitioners referring end users to, the Licensed Products; ● use the Licensed Products only for the purposes identified and permitted pursuant to regulatory approval; and ● collect data acquired from the Licensed Products. 13 The license is non-transferable, non-assignable and non-sublicensable, except that the Licensor will in good faith consider any request by us for any sublicense.
IFP continues to manufacture the cartridges for the Fingerprinting Drug Screening System in its factory in Cambridge, England. Research and Development Our research and development (R&D) team collaborates with external specialist organizations across jurisdictions to conduct comprehensive R&D initiatives. These collaborative efforts are currently driven by the following primary objectives: 1.
IFP continues to manufacture the cartridges for the Fingerprinting Drug Screening System in its factory in Cambridge, England. Research and Development The Company’s research and development (R&D) team collaborates with external specialist organizations across jurisdictions to conduct comprehensive R&D initiatives. These collaborative efforts are currently driven by the following primary objectives: 1.
The SGT License Agreement requires, among other material provisions, that commencing after the receipt of regulatory approval in a jurisdiction, we will pay the Licensor a minimum royalty with respect to such jurisdiction for each year, in four equal quarterly instalments. The minimum royalty will be 13% of the projected net sales in such jurisdiction for each such year.
The BPT License Agreement requires, among other material provisions, that commencing after the receipt of regulatory approval in a jurisdiction, we will pay the Licensor a minimum royalty with respect to such jurisdiction for each year, in four equal quarterly instalments. The minimum royalty will be 13% of the projected net sales in such jurisdiction for each such year.
The SGT License Agreement also may be terminated by us after July 3, 2029 upon 180 days’ prior written notice. The SGT License Agreement may not be terminated by the Licensor unless we permanently discontinue our business operations in relation to the Licensed Products, or if we dissolve or cease to exist.
The BPT License Agreement also may be terminated by us after July 3, 2029 upon 180 days’ prior written notice. The BPT License Agreement may not be terminated by the Licensor unless we permanently discontinue our business operations in relation to the Licensed Products, or if we dissolve or cease to exist.
Even in regions where certain drugs, such as cannabis, have been decriminalized (such as in various states across the United States, Canada, and Europe), social and workplace challenges persist relating to impairment, drug dependency and associated criminal activity, which in turn will increase the need for testing.
Even in regions where certain drugs, such as cannabis, have been decriminalized (such as in various states across the United States, Canada, and Europe), social and workplace challenges persist relating to impairment, drug dependency and associated criminal activity, which increase the need for testing.
The SGT License Agreement may be terminated by us in the event of a material breach by the Licensor, if the Licensor does not cure the breach within 30 days after receiving notice of the breach; or in the event the Licensor discontinues its business operations or in the case of certain events related to insolvency or bankruptcy.
The BPT License Agreement may be terminated by us in the event of a material breach by the Licensor, if the Licensor does not cure the breach within 30 days after receiving notice of the breach; or in the event the Licensor discontinues its business operations or in the case of certain events related to insolvency or bankruptcy.
The patents protect the following technological claims of the SGB: the architecture of a biofunctional organic thin film transistor device comprising a gate electrode, a dielectric layer, a partially organic semiconducting layer, a source electrode, a drain electrode, a substrate and an enzyme; the method for producing the organic thin film transistor device; and methods of using the device to detect glucose levels.
The patents protect the following technological claims of the BPT: the architecture of a biofunctional organic thin film transistor device comprising a gate electrode, a dielectric layer, a partially organic semiconducting layer, a source electrode, a drain electrode, a substrate and an enzyme; the method for producing the organic thin film transistor device; and methods of using the device to detect glucose levels.
However, the exclusivity of the license granted under the SGT License Agreement runs until the expiration of the patent portfolio covered by the SGT License Agreement, which is currently until 2033. We expect that the patent portfolio will be extended as new patents are created throughout product development, thereby extending the exclusivity of the SGT License Agreement.
However, the exclusivity of the license granted under the BPT License Agreement runs until the expiration of the patent portfolio covered by the BPT License Agreement, which is currently until 2033. We expect that the patent portfolio will be extended as new patents are created throughout product development, thereby extending the exclusivity of the BPT License Agreement.
Our flagship product from this platform, which is commercially available in certain countries outside of the United States, is the Intelligent Fingerprinting Drug Screening System (the “IFP System” or “IFP Products”), a two-part system that consists of non-invasive, sweat-based fingerprint diagnostic testing products designed to detect drugs of abuse including opioids, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine.
The flagship product from this platform, which is commercially available in certain countries outside of the United States, is the Intelligent Fingerprinting Drug Screening System (the “IFP System” or “IFP Products”), a two-part system that consists of non-invasive, fingerprint sweat-based diagnostic testing products designed to detect drugs of abuse including opiates, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine.
Our team collectively possesses the experience and capabilities to build a robust medical technology company that develops next-generation non-invasive medical devices and solutions. Access to Information Our website is at www.ibs.inc .
Our team collectively possesses the experience and capabilities to build a robust medical technology company that develops next-generation non-invasive medical devices and solutions. Available Information Our website is at www.ibs.inc .
Based on research commissioned by the Company, the system has the ability to achieve sensitivity and accuracy levels as demonstrated by the performance characteristics in the table below. We believe that the lateral flow assay technology used in IFP Products has the potential to also deliver significant benefits in other areas of medical diagnostics.
Based on research commissioned by the Company, the system has the ability to achieve sensitivity and accuracy levels, as demonstrated by the performance characteristics in the table below. The Company believes that the lateral flow assay technology used in the IFP Products has the potential to also deliver significant benefits in other areas of medical diagnostics.
The royalty fee rate will be reduced from 13% to 3% upon the expiration of the patent portfolio covered by the SGT License Agreement. There is no set expiration date for the SGT License Agreement.
The royalty fee rate will be reduced from 13% to 3% upon the expiration of the patent portfolio covered by the BPT License Agreement. There is no set expiration date for the BPT License Agreement.
We may be subject to further regulations regarding import and export restrictions, tariff regulations, and duties and tax requirements. These regulatory requirements may change in the future.
The Company may be subject to further regulations regarding import and export restrictions, tariff regulations, and duties and tax requirements. These regulatory requirements may change in the future.
ITEM 1. BUSINESS. Intelligent Bio Solutions Inc. (formerly known as GBS Inc.), and its wholly owned Delaware subsidiary, GBS Operations Inc. were each formed on December 5, 2016, under the laws of the state of Delaware.
ITEM 1. BUSINESS. Intelligent Bio Solutions Inc. and its wholly owned Delaware subsidiary, GBS Operations Inc., were each formed on December 5, 2016, under the laws of the state of Delaware.
The system comprises a small, tamper-evident drug screening cartridge onto which ten fingerprint sweat samples are collected in under a minute, before the portable analysis unit provides an on-screen result in under ten minutes. Samples collected with our confirmatory kits can also be sent to a third-party laboratory service provider to perform confirmation testing.
The system comprises a small, tamper-evident drug screening cartridge onto which ten fingerprint sweat samples are collected in under a minute before the portable analysis unit provides an on-screen result in under ten minutes. Samples collected with a confirmatory kit can also be sent to a third-party laboratory service provider for confirmation testing.
After the expiration of the exclusivity period under the SGT License Agreement, we may continue to market and sell the Licensed Products.
After the expiration of the exclusivity period under the BPT License Agreement, we may continue to market and sell the Licensed Products.
We believe the non-invasive nature of our product will establish us as a significant participant in the glucose testing market in the APAC Region and, therefore, by the time the patents expire, and by the time the exclusivity period under the SGT License Agreement expires, we expect to hold a meaningful share in the market, and brand awareness that will ensure we continue to operate successfully.
We believe the non-invasive nature of our product may establish us as a significant participant in the POCT testing market in the APAC Region and, therefore, by the time the patents expire, and by the time the exclusivity period under the BPT License Agreement expires, we expect to hold a meaningful share in the market, and brand awareness that will ensure we continue to operate successfully.
Our products may also contain hazardous substances, and they are subject laws and regulations relating to labelling requirements and to their sale, collection, recycling, treatment, storage and disposal. Compliance with these laws and regulations may be expensive and noncompliance could result in substantial fines and penalties.
The Company’s products may also contain hazardous substances and they are subject to laws and regulations relating to labelling and to their sale, collection, recycling, treatment, storage, and disposal. Compliance with these laws and regulations may be expensive and noncompliance could result in substantial fines and penalties.
All of our consulting agreements will pre-emptively assign to us all new and improved intellectual property that arise during the term of the agreement. In addition, we may license additional technologies from the Licensor or third parties.
All consulting agreements will pre-emptively assign all new and improved intellectual property that arise during the term of the agreement to the Company. In addition, the Company may license additional technologies from the Licensor or third parties.
Our reference to the URL for our website is intended to be an inactive textual reference only. 26
Our reference to the URL for our website is intended to be an inactive textual reference only. 18
UK (GB 2592432) Australia (AU 2021225394) (Pending) Europe (EP 21709774.0) (Pending) US (US 17/904887) (Pending) The lateral flow test strip reader family - is directed to the DSR-Plus reader used in the commercial product This family was filed in 2020 and is estimated to expire in 2040-2041. 12 Secondary / Tertiary Patent Families UK (GB 2517737) Australia (AU 2014313919) US (US 10617397) The first cartridge family - is directed to a sample cartridge that is no longer being sold or used.
UK (GB 2592432) Australia (AU 2021225394) (Pending) European Unitary (EP 4111173) UK (via Europe (EP 4111173) US (US 17/904887) (Pending) The lateral flow test strip reader family - is directed to the DSR-Plus reader used in the commercial product This family was filed in 2020 and is estimated to expire in 2040-2041. 9 Secondary / Tertiary Patent Families UK (GB 2517737) Australia (AU 2014313919) US (US 10617397) The first cartridge family - is directed to a sample cartridge that is no longer being sold or used.
Prior to any further acquisition or licensing of technology from a third party, we will evaluate the existing proprietary rights, our ability to obtain and protect these rights, and the likelihood or possibility of infringement upon competing rights of others. 24 The issuance of a patent does not ensure that it is valid or enforceable.
Prior to any further acquisition or licensing of technology from a third party, the Company will evaluate the existing proprietary rights, its ability to obtain and protect these rights, and the likelihood or possibility of infringement upon competing rights of others. 16 The issuance of a patent does not ensure that it is valid or enforceable.
Both of these involve the collection of fingerprint sweat samples for analysis. For many years, competitor POC and confirmation tests have needed to rely on collecting either urine or oral fluid (saliva) body fluid samples. There are several competitive advantages of analyzing fingerprint sweat over urine and oral fluid drug testing: 1.
Both of these involve the collection of fingerprint sweat samples for analysis. For many years, competitor POC and confirmation tests relied on collecting either urine or oral fluid (saliva) samples. There are several competitive advantages of analyzing fingerprint sweat over urine and oral fluid drug testing: 1.
Manufacturing The facilities required to produce the Intelligent Fingerprinting Drug Screening Cartridge and DSR-Pus Reader are in place at our manufacturing facility in Cambridge, UK, which is used for fabrication and quality control.
Manufacturing The equipment and facilities required to produce the Intelligent Fingerprinting Drug Screening Cartridge and DSR-Plus Reader are in place at the Company’s manufacturing facility in Cambridge, UK, which is used for fabrication and quality control.
The “COV2 Products” include: (i) a biosensor strip for antibodies against SARS-CoV-2; (ii) a proprietary smartphone application for the purpose reading, storing, analyzing and providing patient support programs for any one or more of the indicators for the purpose of measuring the amount or concentration of immunoglobulins (IgG, IgM, IgA) specific to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2); and/or (iii) a dedicated sensor strip reading device for any one or more of the indicators for the purpose of measuring the amount or concentration of immunoglobulins (IgG, IgM, IgA) specific to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).
The “COV2 Products” include: (i) a biosensor strip for antibodies against SARS-CoV-2; (ii) a proprietary smartphone application for the purpose reading, storing, analyzing and providing patient support programs for any one or more of the indicators for the purpose of measuring the amount or concentration of immunoglobulins (IgG, IgM, IgA) specific to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2); and/or (iii) a dedicated sensor strip reading device for any one or more of the indicators for the purpose of measuring the amount or concentration of immunoglobulins (IgG, IgM, IgA) specific to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) The COV2 Products only include products that are supplied by an authorized supplier.
By expanding the capabilities of these platforms, we will be better equipped to address diverse diagnostic needs and contribute to improved patient outcomes. 8 Regulatory Matters Our R&D, manufacturing facilities and operations for drug screening products adhere to stringent quality criteria, complying with ISO 13485 for In Vitro Diagnostic Devices and Medical Devices, as well as ISO 9001.
By expanding the capabilities of this platform, the Company will be better equipped to address diverse diagnostic needs and contribute to improved patient outcomes. Regulatory Matters The Company’s R&D, manufacturing facilities and operations for drug screening products adhere to stringent quality criteria, complying with ISO 13485 for In Vitro Diagnostic Devices and Medical Devices, as well as ISO 9001.
Our overall competitive position depends upon several factors, including product performance and reliability, connectivity, manufacturing cost, and customer support. Government Regulation We operate in a highly regulated industry.
Our overall competitive position depends upon several factors, including product performance and reliability, connectivity, manufacturing cost, and customer support. Government Regulation The Company operates in a highly regulated industry.
We will tailor our strategy to the targeted region, establishing direct sales and marketing teams or utilizing distribution networks. In some cases, a combination of these strategies may be appropriate. Distributors: Through the use of buy-sell agreements, distributors will purchase the IFP Products and resell them to customers. These distributors can be exclusive or non-exclusive, depending on our arrangements.
The Company plans to tailor its strategy to the targeted region, establishing direct sales and marketing teams or utilizing distribution networks. In some cases, a combination of these strategies may be appropriate. Distributors: Through buy-sell agreements, distributors will purchase the IFP Products and resell them to customers. These distributors can be exclusive or non-exclusive, depending on the agreed arrangement.
We have quality and regulatory oversight of our sub-contracted reference laboratories, where our methodology is accredited by the United Kingdom Accreditation Service (UKAS), ensuring that the laboratory operates according to the ISO 17025 standard.
The Company has quality and regulatory oversight of sub-contracted reference laboratories, where its methodology is accredited by the United Kingdom Accreditation Service (UKAS), ensuring that the laboratory operates according to the ISO 17025 standard.
Technology License Agreements We are party to following technology license agreements. 1) The Amended and Restated License Agreement dated September 12, 2019, which amends and restates all previous license agreements (the “SGT License Agreement”) is limited to the APAC Region. 2) The technology license agreement dated June 23, 2020 (the “COV2 License Agreement”), for COV2 diagnostic test globally.
The Amended and Restated License Agreement dated September 12, 2019, which amends and restates all previous license agreements (the “BPT License Agreement”) is limited to the APAC Region. 2. The technology license agreement dated June 23, 2020 (the “COV2 License Agreement”), for COV2 diagnostic test globally.
Our team, including our employees, contractors, and collaborators, comprises multiple cross-functional units, including strategy, project management, technical engineering, manufacturing and supply chain, quality assurance, legal and compliance, regulatory affairs, clinical affairs, product management & marketing, systems engineering, human resources, IT, investor relations, and finance.
Our subsidiary, IFP, has 37 employees in the United Kingdom. Our team, including our employees, contractors, and collaborators, comprises multiple cross-functional units, including strategy, project management, technical engineering, manufacturing and supply chain, quality assurance, legal and compliance, regulatory affairs, clinical affairs, product management, marketing, systems engineering, human resources, IT, investor relations, and finance.
The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application.
The term of individual patents depends upon the legal term of the patents in the countries where they are obtained. In most countries where the Company files patents, the patent term is 20 years from the earliest date of filing a non-provisional patent application.
UK (GB 2561165) Australia (AU 2018247080) (Pending) Europe (EP 18716321.7) (Pending) US (US 11227140) The confirmation cartridge family - is directed to the confirmation cartridge used in the commercial product This family was filed in 2017 and is estimated to expire in 2037-2038.
UK (GB 2561165) Australia (AU 2018247080) European Unitary (EP 3600034) UK (via Europe) (EP 3600034) US (US 11227140) The confirmation cartridge family - is directed to the confirmation cartridge used in the commercial product This family was filed in 2017 and is estimated to expire in 2037-2038.
Customers include safety-critical industries such as construction, transportation and logistics firms, manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and judicial organizations. 3 ● The Biosensor Platform – Our “Biosensor Platform” consists of a small, printable modified organic thin-film transistor strip that we license across the Asia Pacific Region from Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or “Licensor”).
Customers include safety-critical industries such as construction, transportation and logistics, manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and judicial organizations. ● The Biosensor Platform – A biosensor platform we refer to as the Biosensor Platform Technology (“BPT”), or simply the “Biosensor Platform,” consists of a small, printable modified organic thin-film transistor strip that we license across the Asia Pacific Region (“APAC Region”) from Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or “Licensor”).
We will be subject to numerous post-marketing regulatory requirements, which may include labeling regulations and medical device reporting regulations, and which may require us to report to different regulatory agencies if our device causes or contributes to a death or serious injury or malfunctions in a way that would likely cause or contribute to a death or serious injury.
The Company will be subject to numerous post-marketing regulatory requirements, which may include labelling regulations and medical device reporting regulations, and which may require it to report to different regulatory agencies if its device causes or contributes to a death or serious injury or malfunctions in a way that would likely cause or contribute to a death or serious injury.
We intend to protect any of our proprietary rights through a variety of methods, including confidentiality agreements and/or proprietary information agreements with suppliers, employees, consultants, independent contractors and other entities who may have access to proprietary information. We will generally require employees to assign patents and other intellectual property to us as a condition of employment with us.
The Company intends to protect its proprietary rights through a variety of methods, including confidentiality agreements and/or proprietary information agreements with suppliers, employees, consultants, independent contractors and other entities who may have access to proprietary information. The Company will generally require employees to assign patents and other intellectual property to it as a condition of employment.
Our research, development and manufacturing operations including product assembly line at Cambridge, UK involve the use of hazardous substances, and we are subject to a variety foreign environmental laws and regulations relating to the storage, use, handling, generation, manufacture, treatment, discharge and disposal of hazardous substances.
The Company’s research, development and manufacturing operations, including its product assembly line in Cambridge, UK, involve the use of hazardous substances, and consequently, it is subject to a variety of foreign environmental laws and regulations relating to the storage, use, handling, generation, manufacture, treatment, discharge and disposal of hazardous substances.
The ten samples are collected in under a minute before the portable analysis unit provides an on-screen result in under ten minutes. The system is currently designed to detect opioids, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine.
The ten samples are collected in under a minute before the portable analysis unit provides an on-screen result in under ten minutes. The system is currently designed to detect opioids, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine. In addition, samples collected via confirmatory kits can be sent to a third-party laboratory service provider for confirmation testing.
Liability under environmental laws and regulations can be joint and several and without regard to fault or negligence, and they tend to become more stringent over time, imposing greater compliance costs and increased risks and penalties associated with violations. 25 Employees In the past, we have utilized for our benefit certain employees of the Licensor.
Liability under environmental laws and regulations can be joint and several and without regard to fault or negligence, and they tend to become more stringent over time, imposing greater compliance costs and increased risks and penalties associated with violations. 17 Human Capital As of September 16, we have 11 full-time employees in Australia and 2 in the United States.
Point of Care/Rapid Diagnostics Market According to the MarketsandMarkets, Inc.’s study, Point of Care/Rapid Diagnostics Market by Product, Platform, Purchase, Sample, User - Global Forecast to 2027, published in December 2022, the global market for Point of Care medical diagnostics was estimated to be $45.36bn in 2022, rising to $75.46bn in 2027 with a compounded annual growth rate (CAGR) of 10.7% from 2022 to 2027.
The WDR also reported that there were 39.5 million people with drug use disorders in 2021, an increase of 45% over the past ten years. 8 Point of Care/Rapid Diagnostics Market According to the MarketsandMarkets study, Point of Care/Rapid Diagnostics Market by Product, Platform, Purchase, Sample, User - Global Forecast to 2027 , published in December 2022, the global market for Point of Care medical diagnostics was estimated to be $45.36bn in 2022, rising to $75.46bn in 2027 with a compounded annual growth rate (CAGR) of 10.7% from 2022 to 2027.
A second patent application for a different iteration of the device design has been filed with a priority date of June 2016 and is granted in the United States (10,978,653) and Australia (2016412541). A third patent application for a further iteration of the device has been filed with a priority date of 15 May 2018.
The original patent application, which claims a priority date of March 2012, has been granted in the United States (9,766,199) and China (ZL201380022888.2). A second patent application for a different iteration of the device design has been filed with a priority date of June 2016 and is granted in the United States (10,978,653) and Australia (2016412541).
The combination of these benefits shows that fingerprint drug testing provides a more cost-effective, less invasive and more dignified method when compared to urine and oral fluid-based tests. The recyclability of IFP Product test kits is of specific benefit to organizations with environmental policies to reduce single-use plastics.
The combination of these benefits shows that fingerprint drug testing provides a more cost-effective, less invasive and more dignified method when compared to urine and oral fluid-based tests.
Further patents may yet be issued based on all three applications. The Chinese and the United States patents belong to the same patent family and relate to the same invention. The United States and Australian patents originating with the second application are similarly of the same patent family and relate to the same invention.
A third patent application for a further iteration of the device has been filed with a priority date of May 15, 2018. Further patents may yet be issued based on all three applications. The Chinese and the United States patents belong to the same patent family and relate to the same invention.
Results can also be downloaded to a computer for and be used for, among other things, and to the extent legally permissible, integration with employee medical records or for general statistical analysis.
The Cartridge is inserted into a reader, and within 10 minutes, the results are displayed, with options to print and save anonymized data for further use. 5 Results can also be downloaded to a computer and be used for, among other things, and to the extent legally permissible, integration with employee medical records or for general statistical analysis.
Depending on market opportunities and sales volume, we may appoint a dedicated distribution leader for M.E.A. operations at a later stage. Market Analysis and Opportunity The Drug Screening Market The drug screening market encompasses various sectors, including workplaces, drug testing labs, criminal justice, law enforcement, schools and colleges, pain management centers, the military, medical examiners, individual users, and sporting organizations.
Market Analysis and Opportunity The Drug Screening Market The drug screening market encompasses various sectors, including workplaces, drug rehabilitation, drug testing labs, criminal justice, law enforcement, schools and colleges, pain management centers, the military, medical examiners, individual users, and sporting organizations.
Distribution and Sales We currently serve over 350 small to medium-sized businesses, primarily located throughout the United Kingdom, with additional customers coming from various global locations. We intend to expand our customer base by strengthening our presence in existing markets and, subject to receiving necessary regulatory approvals and clearances, venture into new regions.
Distribution and Sales The Company serves over 400 active customer accounts, primarily in the United Kingdom, with additional customers across various global locations. The Company intends to expand its account base by strengthening its presence in existing markets and, subject to receiving necessary regulatory approvals and clearances, venture into new regions.
Intelligent Fingerprinting Drug Screening System Our wholly owned subsidiary, Intelligent Fingerprinting Limited (IFP), is the developer and owner of our proprietary and commercially available portable drug screening system designed to detect common drugs of abuse through fingerprint sweat.
The Company further announced that it received its first order under this agreement, from a Chile-based electrical distribution company. Intelligent Fingerprinting Drug Screening System The Company’s wholly owned subsidiary, Intelligent Fingerprinting Limited (IFP), is the developer and owner of a proprietary and commercially available portable drug screening system designed to detect common drugs of abuse through fingerprint sweat.
We intend to vigorously protect our intellectual property rights in any technologies owned by us through patents and copyrights, as available through registration in the United States and internationally. We also will rely upon trade secrets, know-how, and continuing technological innovation to develop and maintain our competitive position.
The Company intends to vigorously protect its intellectual property rights for any technologies owned through patents and copyrights, both in the United States and internationally. Additionally, the Company plans to leverage trade secrets, know-how, and continuing technological innovation to develop and maintain its competitive position.
We do not currently intend to manufacture the Licensed Products in-house.
The Licensed Products only include products that are supplied by an authorized supplier. We do not currently intend to manufacture the Licensed Products in-house.
We operate globally with the objective of providing intelligent, pain-free, and accessible solutions that improve the quality of life. Our current product portfolio includes: ● Intelligent Fingerprinting Platform - Our proprietary portable platform analyzes fingerprint sweat using a one-time (recyclable) cartridge and portable handheld reader.
The Company’s current product portfolio includes: ● Intelligent Fingerprinting Platform: A proprietary portable platform that analyzes fingerprint sweat using a one-time cartridge and portable handheld reader.
To facilitate the expansion of point-of-care testing into additional areas of interest, such as tumor markers, hormones, and allergies, the core team will collaborate with external research specialists.
To facilitate the expansion of point-of-care testing into additional areas of interest, such as tumor markers, hormones, and allergies, the core team will collaborate with external research specialists. This joint exploration aims to unlock the untapped potential applications of the existing lateral flow assay technology on which the Intelligent Fingerprinting Platform has been developed.
According to the World Drug Report 2022 published by the United Nations Office on Drugs & Crime, around 284 million people aged 15-64 years old used drugs worldwide in 2020, a 26% increase over the previous decade. Cannabis remains the world’s most used drug, with 209 million past-year users in 2020, a 23% increase on the previous decade.
According to the World Drug Report 2023 (“WDR”) published by the United Nations Office on Drugs & Crime, around 296 million people used drugs worldwide in 2021, a 23% increase over the previous decade. The WDR states that cannabis remains the world’s most-used drug, with 219 million users in 2021, representing 4% of the global population.
Our Australian subsidiary Intelligent Bio Solutions (APAC) Pty Ltd (formerly known as Glucose Biosensor Systems (Greater China) Pty Ltd) was formed on August 4, 2016, under the laws of New South Wales, Australia and was renamed to Intelligent Bio Solutions (APAC) Pty Ltd on January 6, 2023.
The Company’s Australian subsidiary, Intelligent Bio Solutions (APAC) Pty Ltd, was formed on August 4, 2016, under the laws of New South Wales, Australia and was renamed to Intelligent Bio Solutions (APAC) Pty Ltd on January 6, 2023. On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales (the “IFP Acquisition”).
In addition, samples collected via confirmatory kits can be sent to a third-party laboratory service provider for confirmation testing. 7 Intelligent Fingerprinting Drug Screening System Functionality The Intelligent Fingerprinting Drug Screening System consists of single-use, tamper-evident Intelligent Fingerprinting Cartridges (for sample collection) and the portable Intelligent Fingerprinting DSR-Plus portable analysis unit.
Intelligent Fingerprinting Drug Screening System Functionality The Intelligent Fingerprinting Drug Screening System consists of single-use, tamper-evident Intelligent Fingerprinting Cartridges for sample collection and the portable Intelligent Fingerprinting DSR-Plus portable analysis unit.
SGT License Agreement On September 12, 2019, we entered into an Amended and Restated Technology License Agreement, or the “SGT License Agreement,” with the Life Science Biosensor Diagnostic Pty Ltd, amending and restating all the previous SGT license agreements with LSBD.
BPT License Agreement On September 12, 2019, we entered into an Amended and Restated Technology License Agreement, or the “BPT License Agreement,” with LSBD amending and restating all the previous BPT license agreements with LSBD. The BPT License Agreement sets forth our contractual rights and responsibilities relating to the Licensed Products in the APAC Region.
We focus on distributors with existing customer networks in the drug screening segment and who have a proven track record in their respective territories.
The Company plans to focus on distributors with existing customer networks in the drug screening segment and a proven track record in their territories. The Company also plans to utilize exclusive distributors who will be the sole providers within certain defined territories and will need to satisfy certain minimum quarterly purchase requirements.
United States: During our 510(k) premarket submission and subject to receiving appropriate approvals from the FDA, we plan to appoint a dedicated distribution leader to spearhead market entry strategies by identifying and selecting distributors and partners. Our focus will be identifying distributors and partners already operating within the U.S. drug screening market.
The Company further intends to utilize distributor partnerships to cover regions such as Western Australia, South Australia, and more remote areas. 7 United States: During the Company’s 510(k) premarket submission and subject to receiving appropriate approvals/ clearance from the FDA, the Company plans to appoint a dedicated distribution leader to spearhead market entry strategies by identifying and selecting distributors and partners.
We anticipate that obtaining FDA approval will benefit entry into other regions of the world. Other Regions: Distributors in other countries and jurisdictions will be responsible for obtaining all necessary approvals within their respective territories.
Initiating the clinical studies plan represents a critical milestone and the Company believes it remains on track for planned submission by the end of 2024 and planned entry into the United States market in 2025. Other Regions: Distributors in other countries and jurisdictions will be responsible for obtaining all necessary approvals within their respective territories.
On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales (the “IFP Acquisition”). Our headquarters are in New York, New York. We are a medical technology company focused on developing and delivering non-invasive, rapid and pain free innovative testing and screening solutions.
The Company’s headquarters are in New York, New York. Intelligent Bio Solutions Inc. is a medical technology company focused on developing and delivering intelligent, rapid, non-invasive testing and screening solutions. The Company operates globally with the objective of providing innovative and accessible solutions that improve the quality of life.
European Expansion: We will appoint a dedicated European representative to identify, negotiate, and sign distributor agreements and maximize sales in targeted territories. Expanding into the Middle East and Africa (MEA): A representative from our European operations will initially manage M.E.A operations.
The Company plans to focus on identifying distributors and partners already operating within the U.S. drug screening market. European Expansion: The Company plans to appoint a dedicated European representative to identify, negotiate, and sign distributor agreements and maximize sales in targeted territories.
The team utilizes their extensive network of existing contacts and relationships to introduce the IFP product through in-person demonstrations. We also intend to utilize distributor partnerships to supplement our direct team and cover regions such as Western Australia, South Australia and more remote areas.
The agency’s primary area of focus is the east coast of Australia, comprising approximately 72% of the country’s population. The agency’s team utilizes their extensive network of existing contacts and relationships to introduce the IFP products through in-person demonstrations.
The exact wording of the patent claims varies between countries.
The United States and Australian patents originating with the second application are similarly of the same patent family and relate to the same invention. The exact wording of the patent claims varies between countries.
The COV2 License Agreement also may be terminated by us at any time after the tenth anniversary of the COV2 License Agreement upon 180 days’ prior written notice. 22 Market Analysis and Opportunity According to Diabetes Atlas Factsheet 2021, in 2021 there were 206 million people living with diabetes in the Western Pacific, which accounts for 38% of the world’s diabetic population.
The COV2 License Agreement also may be terminated by us at any time after the tenth anniversary of the COV2 License Agreement upon 180 days’ prior written notice. 15 Intellectual Property Our biosensor business is dependent on the proprietary biosensor technology we license from LSBD.
We intend to aggressively market IFP Products to different geographical regions outside the U.K., with a focus on the following industries and workplaces: airports, transportation & logistics, mining, construction, drug testing labs, criminal justice, law enforcement, education facilities, pain management centers, drug rehabilitation centers, military, medical examiners, individual users and sporting organizations.
We intend to aggressively market IFP Products to different geographical regions outside the UK, with a focus on the industries and segments noted above.
Removed
The Biosensor Platform, which is designed to detect multiple biological analytes by substituting the Glucose Oxidase (“GOX”) enzyme with a suitable alternative for each analyte, is currently in the development stage.
Added
The Biosensor Platform is designed to detect multiple biological analytes by substituting the top enzyme layer of the biosensor to suit each analyte. This platform technology has the potential to develop a range of Point of Care Tests (“POCT”), including the modalities of clinical chemistry, immunology, tumor markers, allergens, and endocrinology.
Removed
Our flagship product candidate based on the Biosensor Platform technology is the Saliva Glucose Biosensor (“SGB” and, together with a software app that interfaces the SGB with the Company’s digital information system, the Saliva Glucose Test or “SGT”), a Point of Care Test (POCT) expected to complement the finger pricking invasive blood glucose monitoring test for diabetic patients.
Added
We understand that following the appointment of a liquidator to LSBD, the intellectual property rights licensed by us from the Licensor (LSBD) have reverted to the University of Newcastle. The Company is in early-stage discussions regarding the potential restructuring of future licensing of BPT and products with the University of Newcastle.
Removed
Our products based on the SGT are referred to herein as the “SGT products.” These platform technologies have the potential to develop a range of POCT including the modalities of clinical chemistry, immunology, tumor markers, allergens, and endocrinology.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

147 edited+37 added−48 removed228 unchanged
Biggest changeIf available, financing terms may lead to dilution of our stockholders’ equity. ● Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements included in our Annual Report on Form 10-K for the Fiscal year ended June 30, 2023. ● Neither we nor the Licensor have yet launched the SGT and the ability to do so will depend on the acceptance of the SGT in the Global healthcare market. ● We have incurred significant losses since inception and continue to incur losses, and we may not be able to achieve significant revenues or profitability. ● We depend on a limited number of single-source suppliers to manufacture certain components of IFP Drug Screening System, which makes us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of operations. 27 ● Our results may be impacted by changes in foreign currency exchange rates. ● The license agreement with the Licensor, which covers technology used in our Biosensor Platform, contains risks that may have a material adverse effect on us and our business, assets and its prospects. ● If the SGT fails to satisfy current or future customer requirements, we may be required to make significant expenditures to redesign the product candidate, and we may have insufficient resources to do so. ● We are yet to finalize the manufacturing plan for the production of the SGT on a commercial scale, and may be dependent upon third-party manufacturers and suppliers, making us vulnerable to contractual relationships and market forces, supply problems and price fluctuations, which could harm our business. ● We expect to rely in part on third-party distributors to effectively distribute our products, if our distributors fail to effectively market and sell the SGT and IFP products in full compliance with applicable laws, our operating results and business may suffer. ● As we intend to conduct business internationally, we are susceptible to risks associated with international relationships, which could adversely impact our results of operations and financial condition. ● If third-party payors do not provide coverage and reimbursement for the use of the SGT and IFP products, our business and prospects may be negatively impacted. ● Non-United States governments often impose price controls, which may adversely affect our profitability. ● The SGT and IFP Drug Screening System may contain undetected errors, which could limit our ability to provide our products and services and diminish the attractiveness of our service offerings. ● We will rely on the proper function, security and availability of our information technology systems and data to operate our business, and a breach, cyber-attack or other disruption to these systems or data could materially and adversely affect our business, results of operations, financial condition, cash flows, reputation or competitive position. ● If we are not able to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfully. ● If we or our manufacturers fail to comply with applicable regulations, our proposed operations could be interrupted, and our operating results may be negatively impacted. ● We may be subject to healthcare laws which, if violated, could subject us to substantial penalties. ● Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of the SGT and IFP Drug Screening System. 28 ● If we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to penalties, which could increase our liabilities and harm our reputation or our business. ● The regulatory approval process which we may be required to navigate may be expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for the product launch of the SGT and IFP products in certain jurisdiction or our any future product. ● Clinical data obtained subsequent to the implementation of the clinical evidence module may not meet the required objectives, which could delay, limit or prevent additional regulatory approval. ● We may be unable to complete required clinical evaluations, or we may experience significant delays in completing such clinical evaluations, which could prevent or significantly delay our targeted product launch timeframe and impair our business plan. ● We are subject to the risk of reliance on third parties to conduct our clinical evaluation work, their inability to comply with good clinical practice and relevant regulation could adversely affect the clinical development of our product candidates and harm our business. ● Our success will depend on our ability to obtain, maintain and protect our intellectual property rights. ● We understand that the External Administrator of LSBD (the Licensor of our SGT and COV2T products), sent notice to the creditors on July 24, 2023, stating that LSBD has appointed a liquidator on July 21, 2023.
Biggest changeIf available, financing terms may lead to significant dilution of our stockholders’ equity. ● Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements included in our Annual Report on Form 10-K for the Fiscal year ended June 30, 2024. ● Neither we nor the Licensor have yet launched the BPT and the ability to do so will depend on the acceptance of the BPT in the global healthcare market. ● We have incurred significant losses since inception and continue to incur losses, and we may not be able to achieve significant revenues or profitability. ● We rely on third parties to perform certain confirmatory tests for our IFP Drug Screening System. ● We depend on a limited number of single-source suppliers to manufacture certain components of IFP Drug Screening System, which makes us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of operations. ● Our results may be impacted by changes in foreign currency exchange rates. ● If we fail to retain marketing and sales personnel, or if we fail to increase our marketing and sales capabilities as we grow, or if we fail to develop broad awareness of our product in a cost-effective manner, we may not be able to generate revenue growth. ● The license agreement with the Licensor, which covers the license of the core technology used in our Biosensor Platform products, contains significant risks that may have a material adverse effect on us and our business, assets and prospects ● If the BPT fails to satisfy current or future customer requirements, we may be required to make significant expenditures to redesign the product candidate, and we may have insufficient resources to do so. ● We are yet to finalize the manufacturing plan for the production of the BPT on a mass market commercial scale, and may be dependent upon third-party manufacturers and suppliers, making us vulnerable to contractual relationships and market forces, supply problems and price fluctuations, which could harm our business. ● We expect to rely in part on third-party distributors to effectively distribute our products, if our distributors fail to effectively market and sell the BPT and IFP products in full compliance with applicable laws, our operating results and business may suffer. ● As we intend to conduct business internationally, we are susceptible to risks associated with international relationships, which could adversely impact our results of operations and financial condition. ● If third-party payors do not provide coverage and reimbursement for the use of the BPT and IFP products, our business and prospects may be negatively impacted. ● Non-United States governments often impose price controls, which may adversely affect our profitability. ● The BPT and IFP Drug Screening System may contain undetected errors, which could limit our ability to provide our products and services and diminish the attractiveness of our service offerings. ● We will rely on the proper function, security and availability of our information technology systems and data to operate our business, and a breach, cyber-attack or other disruption to these systems or data could materially and adversely affect our business, results of operations, financial condition, cash flows, reputation or competitive position. ● If we are not able to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfully. ● If we or our manufacturers fail to comply with applicable regulations, our proposed operations could be interrupted, and our operating results may be negatively impacted. ● We may be subject to healthcare laws and regulations which, if violated, could subject us to substantial penalties. ● Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of the BPT and IFP Drug Screening System. 19 ● If we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to penalties, which could increase our liabilities and harm our reputation or our business. ● The regulatory clearance/approval process which we may be required to navigate may be expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for any product launch by the Company of the BPT and IFP products in certain jurisdiction or our any future product. ● Clinical data obtained subsequent to the implementation of the clinical evidence module may not meet the required objectives, which could delay, limit or prevent additional regulatory clearance or approval. ● We may be unable to complete required clinical evaluations, or we may experience significant delays in completing such clinical evaluations, which could prevent or significantly delay our targeted product launch timeframe and impair our business plan. ● We are subject to the risk of reliance on third parties to conduct our clinical evaluation work, their inability to comply with good clinical practice and relevant regulation could adversely affect the clinical development of our product candidates and harm our business. ● Our success will depend on our ability to obtain, maintain and protect our intellectual property rights. ● We are subject to risk related to the possibility of modifications to our rights to, or the Company’s ability to use, the Licensed Products in relation to the Biosensor Platform due to liquidation of the Licensor, which could materially and adversely affect the Company’s planned business, financial condition, and operating results. ● We depend on intellectual property licensed from the Licensor for our BPT related products, and any absence of legal effect of the license or dispute over the license would significantly harm our BPT related business. ● We will depend primarily on the Licensor to file, prosecute, maintain, defend and enforce intellectual property that we license from it and that is material to our business. ● We and the Licensor may be unable to protect or enforce the intellectual property rights licensed to us, which could impair our competitive position. ● We and where applicable, the Licensor of our products have limited foreign intellectual property rights and may not be able to protect those intellectual property rights, which means that we and/or Licensor may not be able to prevent third parties from practicing our inventions or from selling or importing products made using those inventions. ● We and the Licensor may be subject to claims challenging the invention of the intellectual property we license. ● Our products and operations are subject to extensive government regulation.
If we are unsuccessful in attracting new capital, we may not be able to continue operations or may be forced to sell assets to do so. Alternatively, capital may not be available to us on favorable terms, or if at all. If available, financing terms may lead to significant dilution of our stockholders’ equity .
If we are unsuccessful in attracting new capital, we may not be able to continue operations or may be forced to sell assets to do so. Alternatively, capital may not be available to us on favorable terms, or at all. If available, financing terms may lead to significant dilution of our stockholders’ equity.
Our ability to increase our customer base and achieve broader market acceptance of our product will depend to a significant extent on our ability to expand our marketing efforts. We plan to dedicate significant resources to our marketing programs, as we plan to further plan to expand our geographical reach especially in the APAC Region and the North America region.
Our ability to increase our customer base and achieve broader market acceptance of our product will depend to a significant extent on our ability to expand our marketing efforts. We plan to dedicate significant resources to our marketing programs, as we plan to further expand our geographical reach especially in the APAC Region and the North America region.
In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers or may not be able to allocate sufficient capacity in order to meet our increased requirements, which will negatively affect our business, financial condition and results of operations.
In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, which will negatively affect our business, financial condition and results of operations.
We perform substantially all of our manufacturing, research and development and back office activity for our IFP products in a single location at our Cambridge office in the United Kingdom. We store our finished goods inventory at the same facility. Our facilities, equipment and inventory would be costly to replace and could require substantial lead time to repair or replace.
We perform substantially all of our manufacturing, research and development and back office activity for our IFP products in a single location at our Cambridge facility in the United Kingdom. We store our finished goods inventory at the same facility. Our facilities, equipment and inventory would be costly to replace and could require substantial lead time to repair or replace.
The we and the Licensor have determined that filing, prosecuting and defending intellectual property rights in all countries globally would be prohibitively expensive, and intellectual property rights in some countries can be less extensive than those in the United States.
We and the Licensor have determined that filing, prosecuting and defending intellectual property rights in all countries globally would be prohibitively expensive, and intellectual property rights in some countries can be less extensive than those in the United States.
Furthermore, even if we are granted regulatory clearances or approvals, they may include significant limitations on the indicated uses for the product, which may limit the market for product.
Furthermore, even if we are granted regulatory clearances or approvals, they may include significant limitations on the indicated uses for the product, which may limit the market for the product.
Our products may also contain hazardous substances, and they are subject laws and regulations relating to labelling requirements and to their sale, collection, recycling, treatment, storage and disposal. Compliance with these laws and regulations may be expensive and noncompliance could result in substantial fines and penalties.
Our products may also contain hazardous substances, and they are subject to laws and regulations relating to labelling requirements and to their sale, collection, recycling, treatment, storage and disposal. Compliance with these laws and regulations may be expensive and noncompliance could result in substantial fines and penalties.
These risks and uncertainties include: ● different regulatory requirements for medical product approvals in foreign countries; ● different standards of care in various countries that could complicate the evaluation of our product candidates; ● different medical product import and export rules; ● different labor laws; ● reduced protection for intellectual property rights in certain countries; ● unexpected changes in tariffs, trade barriers and regulatory requirements; 39 ● different reimbursement systems and different competitive medical products indicated for glucose testing; ● localization of products and services, including translation of foreign languages; ● delivery, logistics and storage costs; ● longer accounts receivable payment cycles and difficulties in collecting accounts receivable; ● difficulties providing customer services; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● compliance with the Foreign Corrupt Practices Act, or the “FCPA,” and other anti-corruption and anti-bribery laws; ● foreign taxes, including withholding of payroll taxes; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; ● restrictions on the repatriation of earnings; ● workforce uncertainty in countries where labor unrest is more common than in the United States; ● potential liability resulting from development work conducted by third-party foreign distributors; and ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters, management, communication, and integration problems resulting from cultural differences and geographic dispersion.
These risks and uncertainties include: ● different regulatory requirements for medical product approvals in foreign countries; ● different standards of care in various countries that could complicate the evaluation of our product candidates; ● different medical product import and export rules; ● different labor laws; ● reduced protection for intellectual property rights in certain countries; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● different reimbursement systems and different competitive medical products indicated for glucose testing; 28 ● localization of products and services, including translation of foreign languages; ● delivery, logistics and storage costs; ● longer accounts receivable payment cycles and difficulties in collecting accounts receivable; ● difficulties providing customer services; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● compliance with the Foreign Corrupt Practices Act, or the “FCPA,” and other anti-corruption and anti-bribery laws; ● foreign taxes, including withholding of payroll taxes; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; ● restrictions on the repatriation of earnings; ● workforce uncertainty in countries where labor unrest is more common than in the United States; ● potential liability resulting from development work conducted by third-party foreign distributors; and ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters, management, communication, and integration problems resulting from cultural differences and geographic dispersion.
Accordingly, we will not have unfettered right to select our suppliers, regardless of whether an unauthorized supplier could provide products on better pricing, delivery, quality or other terms, thus potentially materially and adversely impacting those aspects of our business, economies, profitability and prospects. 36 ● We are required to collect and anonymize demographic information about the end users of the Licensed Products, as well as data acquired from the Licensed Products.
Accordingly, we will not have unfettered right to select our suppliers, regardless of whether an unauthorized supplier could provide products on better pricing, delivery, quality or other terms, thus potentially materially and adversely impacting those aspects of our business, economies, profitability and prospects. ● We are required to collect and anonymize demographic information about the end users of the Licensed Products, as well as data acquired from the Licensed Products.
We cannot guarantee that we will be able to establish alternative relationships on similar terms, without delay or at all. 33 We depend on a limited number of single-source suppliers to manufacture certain components of IFP Drug Screening System, which makes us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of operations.
We cannot guarantee that we will be able to establish alternative relationships on similar terms, without delay or at all. We depend on a limited number of single-source suppliers to manufacture certain components of IFP Drug Screening System, which makes us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of operations.
If our information technology systems, products or services or sensitive data are compromised, patients or employees could be exposed to financial or medical identity theft or suffer a loss of product functionality, and we could lose existing customers, have difficulty attracting new customers, have difficulty preventing, detecting, and controlling fraud, be exposed to the loss or misuse of confidential information, have disputes with customers, physicians, and other health care professionals, suffer regulatory sanctions or penalties, experience increases in operating expenses or an impairment in our ability to conduct our operations, incur expenses or lose revenues as a result of a data privacy breach, product failure, information technology outages or disruptions, or suffer other adverse consequences including lawsuits or other legal action and damage to our reputation. 41 Our future performance will depend on the continued engagement of key members of our management team, and the loss of one or more of the key members of our management team could have a negative impact on our business.
If our information technology systems, products or services or sensitive data are compromised, patients or employees could be exposed to financial or medical identity theft or suffer a loss of product functionality, and we could lose existing customers, have difficulty attracting new customers, have difficulty preventing, detecting, and controlling fraud, be exposed to the loss or misuse of confidential information, have disputes with customers, physicians, and other health care professionals, suffer regulatory sanctions or penalties, experience increases in operating expenses or an impairment in our ability to conduct our operations, incur expenses or lose revenues as a result of a data privacy breach, product failure, information technology outages or disruptions, or suffer other adverse consequences including lawsuits or other legal action and damage to our reputation. 30 Our future performance will depend on the continued engagement of key members of our management team, and the loss of one or more of the key members of our management team could have a negative impact on our business.
Some of the factors that may cause the market price of our common stock to fluctuate include: ● any delay in or the results of our clinical evaluations; ● any delay in manufacturing of our products; ● any delay with the approval for reimbursement for the patients from their insurance companies; ● our failure to comply with regulatory requirements; ● the announcements of clinical evaluation data, and the investment community’s perception of and reaction to those data; ● the results of clinical evaluations conducted by others on products that would compete with ours; ● any delay or failure to receive clearance or approval from regulatory agencies or bodies; ● our inability to commercially launch products or market and generate sales of our products, including the SGT; ● failure of the SGT or any other products, even if approved for marketing, to achieve any level of commercial success; ● our failure to obtain intellectual property protection for any of our technologies and products (including those related to the SGT) or the issuance of third-party intellectual property that cover our proposed technologies or products; ● developments or disputes concerning our product’s intellectual property rights; ● our or our competitors’ technological innovations; ● general and industry-specific economic conditions that may affect our expenditures; ● changes in market valuations of similar companies; ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or intellectual property; ● failure to adequately manufacture the SGT or any other products through third parties; ● future sales of our common stock or other securities, including shares issuable upon the exercise of outstanding warrants or otherwise issued pursuant to certain contractual rights; ● period-to-period fluctuations in our financial results; and ● low or high trading volume of our common stock due to many factors, including the terms of our financing arrangements.
Some of the factors that may cause the market price of our common stock to fluctuate include: ● any delay in or the results of our clinical evaluations; ● any delay in manufacturing of our products; ● any delay with the approval for reimbursement for the patients from their insurance companies; ● our failure to comply with regulatory requirements; ● the announcements of clinical evaluation data, and the investment community’s perception of and reaction to those data; ● the results of clinical evaluations conducted by others on products that would compete with ours; ● any delay or failure to receive clearance or approval from regulatory agencies or bodies; ● our inability to commercially launch products or market and generate sales of our products, including the BPT; ● failure of the BPT or any other products, even if approved for marketing, to achieve any level of commercial success; 47 ● our failure to obtain intellectual property protection for any of our technologies and products (including those related to the BPT) or the issuance of third-party intellectual property that cover our proposed technologies or products; ● developments or disputes concerning our product’s intellectual property rights; ● our or our competitors’ technological innovations; ● general and industry-specific economic conditions that may affect our expenditures; ● changes in market valuations of similar companies; ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or intellectual property; ● failure to adequately manufacture the BPT or any other products through third parties; ● future sales of our common stock or other securities, including shares issuable upon the exercise of outstanding warrants or otherwise issued pursuant to certain contractual rights; ● period-to-period fluctuations in our financial results; and ● low or high trading volume of our common stock due to many factors, including the terms of our financing arrangements.
There can be no assurance that, even after such time and expenditures, we will be able to obtain necessary regulatory approvals for clinical testing or for the manufacturing or marketing of any products. In addition, during the regulatory process, other companies may develop other technologies with the same intended use as our products.
There can be no assurance that, even after such time and expenditures, we will be able to obtain necessary regulatory clearance or approvals for clinical testing or for the manufacturing or marketing of any products. In addition, during the regulatory process, other companies may develop other technologies with the same intended use as our products.
We contract with third-party laboratory service provider to perform confirmation testing on the samples collected. This service is critical and there are relatively few alternatives. These third-party service providers may be unwilling or unable to provide the necessary services reliably and at the levels we anticipate or that are required by the market.
We contract with third-party laboratory service providers to perform confirmation testing on the samples collected. This service is critical and there are relatively few alternatives. These third-party service providers may be unwilling or unable to provide the necessary services reliably and at the levels we anticipate or that are required by the market.
This limitation may have a material adverse effect on our marketing, sales, operational and other business efforts. ● After the receipt of regulatory approval in a jurisdiction, we may be required to pay the Minimum Royalty with respect to such jurisdiction regardless of the actual amount of sales by us of Licensed Products.
This limitation may have a material adverse effect on our marketing, sales, operational and other business efforts. 25 ● After the receipt of regulatory approval in a jurisdiction, we may be required to pay the Minimum Royalty with respect to such jurisdiction regardless of the actual amount of sales by us of Licensed Products.
If we are unable to raise additional funding to meet our operational needs, we will be forced to limit or cease our operations. In addition to our current capital needs, we regularly consider fundraising opportunities and may decide, from time to time, to raise capital based on various factors, including market conditions and our plans of operation.
If we are unable to raise additional funding to meet our operational needs, we will be forced to limit or cease our operations. 46 In addition to our current capital needs, we regularly consider fundraising opportunities and may decide, from time to time, to raise capital based on various factors, including market conditions and our plans of operation.
This summary is qualified by reference to the full set of risk factors set forth in this Item. ● We will need to raise additional capital to fund our operations in the future. If we are unsuccessful in attracting new capital, we may not be able to continue operations or may be forced to sell assets to do so.
This summary is qualified by reference to the full set of risk factors set forth in this Item. ● We may need to raise additional capital to fund our operations in the future. If we are unsuccessful in attracting new capital, we may not be able to continue operations or may be forced to sell assets to do so.
Accordingly, our operating results would suffer. 42 We may be subject to healthcare fraud and abuse laws and regulations which, if violated, could subject us to substantial penalties. Additionally, any challenge to or investigation into our practices under these laws could cause adverse publicity and be costly to respond to, and thus could harm our business.
Accordingly, our operating results would suffer. We may be subject to healthcare fraud and abuse laws and regulations which, if violated, could subject us to substantial penalties. Additionally, any challenge to or investigation into our practices under these laws could cause adverse publicity and be costly to respond to, and thus could harm our business.
If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by regulatory agencies, which may include, among others, any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notification, or orders for repair, replacement or refunds; ● voluntary or mandatory recall or seizure of our current or future products; ● imposing operating restrictions, suspension or shutdown of production; ● refusing our requests for clearance or pre-market approval of new products, new intended uses or modifications to the SGT, IFP products or future products; ● rescinding clearance or suspending or withdrawing pre-market approvals that have already been granted; and ● criminal prosecution.
If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by regulatory agencies, which may include, among others, any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notification, or orders for repair, replacement or refunds; ● voluntary or mandatory recall or seizure of our current or future products; ● imposing operating restrictions, suspension or shutdown of production; ● refusing our requests for clearance or pre-market approval of new products, new intended uses or modifications to the BPT, IFP products or future products; ● rescinding clearance or suspending or withdrawing pre-market approvals that have already been granted; and ● criminal prosecution.
We do not know whether or when we will become profitable. Our ability to generate higher revenue and achieve profitability depends upon our ability, alone or with others, to complete the development process of our products, including regulatory approvals, and achieve substantial acceptance in the marketplace for our existing IFP products.
We do not know whether or when we will become profitable. 22 Our ability to generate higher revenue and achieve profitability depends upon our ability, alone or with others, to complete the development process of our products, including regulatory approvals, and achieve substantial acceptance in the marketplace for our existing IFP products.
If sufficient coverage and reimbursement is not available for our current or future products, in any country where our license operates, the demand for our products and our revenues will be adversely affected. 40 Non-United States governments often impose strict price controls, which may adversely affect our future profitability.
If sufficient coverage and reimbursement is not available for our current or future products, in any country where our license operates, the demand for our products and our revenues will be adversely affected. Non-United States governments often impose strict price controls, which may adversely affect our future profitability.
Such clinical evaluations will be conducted by third parties as well. Failure of such clinical evaluations to meet their primary endpoints could adversely affect our marketing efforts. 45 Risks Related to Our Intellectual Property Our success will depend on our ability to obtain, maintain and protect our intellectual property rights.
Such clinical evaluations will be conducted by third parties as well. Failure of such clinical evaluations to meet their primary endpoints could adversely affect our marketing efforts. Risks Related to Our Intellectual Property Our success will depend on our ability to obtain, maintain and protect our intellectual property rights.
The license agreement with the Licensor, which covers the license of the core technology used in our Biosensor Platform products, contains significant risks that may have a material adverse effect on us and our business, assets and its prospects.
The license agreement with the Licensor, which covers the license of the core technology used in our Biosensor Platform products, contains significant risks that may have a material adverse effect on us and our business, assets and prospects.
There is an inherent risk related to the possibility of modifications to our rights to, or the Company’s ability to use, the Licensed Products, which could materially and adversely affect the Company’s business, financial condition, and operating results.
There is an inherent risk related to the possibility of modifications to our rights to, or the Company’s ability to use, the Licensed Products, which could materially and adversely affect the Company’s planned business, financial condition, and operating results.
We and the Licensor may be subject to claims challenging the invention of the intellectual property that we license from the Licensor. We and the Licensor may be subject to claims that former employees, collaborators or other third parties have an interest in intellectual property as an inventor or co-inventor.
We and the Licensor may be subject to claims challenging the invention of the intellectual property we license. We and the Licensor may be subject to claims that former employees, collaborators or other third parties have an interest in intellectual property as an inventor or co-inventor.
The failure to adequately demonstrate the analytical performance characteristics of the device under development could delay or prevent regulatory approval of the device, which could prevent or result in delays to market launch and could materially harm our business.
The failure to adequately demonstrate the analytical performance characteristics of the device under development could delay or prevent regulatory clearance or approval of the device, which could prevent or result in delays to market launch and could materially harm our business.
If we fail to maintain the patents and patent applications covering our products, we may not be able to stop a competitor from marketing products that are the same as or similar to our products, which would have a material adverse effect on our business. 47 Patent terms may not be able to protect our competitive position for an adequate period of time with respect to our current or future technologies.
If we fail to maintain the patents and patent applications covering our products, we may not be able to stop a competitor from marketing products that are the same as or similar to our products, which would have a material adverse effect on our business. 35 Patent terms may not be able to protect our competitive position for an adequate period of time with respect to our current or future technologies.
The report from our independent registered public accounting firm for the year ended June 30, 2023, includes an explanatory paragraph stating that our losses from operations and required additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern for a period of one year after the date the financial statements are issued.
The report from our independent registered public accounting firm for the year ended June 30, 2024, includes an explanatory paragraph stating that our losses from operations and required additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern for a period of one year after the date the financial statements are issued.
In addition, even if we take control of the prosecution of licensed intellectual property and related applications, enforcement of licensed intellectual property, or defense of claims asserting the invalidity of that intellectual property, we may still be adversely affected or prejudiced by actions or inactions of the Licensor and its counsel that took place prior to or after our assuming control, and we cannot ensure the cooperation of the Licensor in any such action.
In addition, even if we take control of the prosecution of licensed intellectual property and related applications, enforcement of licensed intellectual property, or defence of claims asserting the invalidity of that intellectual property, we may still be adversely affected or prejudiced by actions or inactions of the Licensor and its counsel that took place prior to or after our assuming control, and we cannot ensure the cooperation of the Licensor in any such action.
Any of these factors could harm our operating results. Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements included in our Annual Report on Form 10-K for the Fiscal year ended June 30, 2023.
Any of these factors could harm our operating results. Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements included in our Annual Report on Form 10-K for the Fiscal year ended June 30, 2024.
The facilities will be harmed or rendered inoperable by natural or man-made disasters, including, but not limited to, earthquakes, flooding, fire and power outages, which may render it difficult or impossible for us to perform our research, development and commercialization activities for some period of time for IFP Drug Screening System.
The facilities could be harmed or rendered inoperable by natural or man-made disasters, including, but not limited to, earthquakes, flooding, fire and power outages, which may render it difficult or impossible for us to perform our research, development and commercialization activities for some period of time for IFP Drug Screening System.
We are yet to finalize the manufacturing plan for the production of the SGT and its components on a mass market commercial scale, and may be dependent upon third-party manufacturers and suppliers, making us vulnerable to contractual relationships and market forces, supply shortages and problems and price fluctuations, which could harm our business.
We are yet to finalize the manufacturing plan for the production of the BPT and its components on a mass market commercial scale, and may be dependent upon third-party manufacturers and suppliers, making us vulnerable to contractual relationships and market forces, supply shortages and problems and price fluctuations, which could harm our business.
In any event, there is a risk that any or all of our marketing strategies could fail. We cannot predict whether the use of traditional and/or non-traditional retail sales tools, in combination with reliance on healthcare providers to educate our customers about the SGT and the IFP products, will be successful in effectively marketing the SGT and the IFP products.
In any event, there is a risk that any or all of our marketing strategies could fail. We cannot predict whether the use of traditional and/or non-traditional retail sales tools, in combination with reliance on healthcare providers to educate our customers about the BPT and the IFP products, will be successful in effectively marketing the BPT and the IFP products.
The combined company may fail to realize the anticipated benefits of the acquisition for a variety of reasons, including the following: ● inability to efficiently operate new businesses or to integrate acquired products. ● failure to successfully manage relationships with customers, distributors, and suppliers. ● failure of customers to accept new products or to continue as customers of the combined company. ● potential incompatibility of technologies and systems. ● failure to leverage the increased scale of the combined company quickly and effectively. ● potential difficulties integrating and harmonizing financial reporting systems. ● difficulties in retaining key employees of the acquired business. ● failure of the acquired business to produce the expected value. ● failure to effectively coordinate sales and marketing efforts to communicate the capabilities of the combined company. 60 ITEM 1B.
The combined company may fail to realize the anticipated benefits of the acquisition for a variety of reasons, including the following: ● inability to efficiently operate new businesses or to integrate acquired products; ● failure to successfully manage relationships with customers, distributors, and suppliers; ● failure of customers to accept new products or to continue as customers of the combined company; ● potential incompatibility of technologies and systems; ● failure to leverage the increased scale of the combined company quickly and effectively; ● potential difficulties integrating and harmonizing financial reporting systems; ● difficulties in retaining key employees of the acquired business; ● failure of the acquired business to produce the expected value; and ● failure to effectively coordinate sales and marketing efforts to communicate the capabilities of the combined company.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms or are insufficient to provide us the necessary rights to use the intellectual property, we may be unable to successfully develop and launch the SGT and our other product candidates from Biosensor Platform.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms or are insufficient to provide us the necessary rights to use the intellectual property, we may be unable to successfully develop and launch the BPT and our other product candidates from Biosensor Platform.
While we entered into non-binding memoranda of understanding with two large distributors in China for the SGT, we have not yet executed any definitive distribution agreements in this regard and there can be no assurances that suitable distributors will be engaged on terms acceptable to us.
While we entered into non-binding memoranda of understanding with two large distributors in China for the BPT, we have not yet executed any definitive distribution agreements in this regard and there can be no assurances that suitable distributors will be engaged on terms acceptable to us.
Furthermore, we may not be able to register or otherwise protect the trademark “Glucose Biosensor” in developing countries in the APAC Region. 50 We and the Licensor rely on confidentiality agreements that could be breached and may be difficult to enforce, which could result in third parties using our intellectual property to compete against us.
Furthermore, we may not be able to register or otherwise protect the trademark “Glucose Biosensor” in developing countries in the APAC Region. 38 We and the Licensor rely on confidentiality agreements that could be breached and may be difficult to enforce, which could result in third parties using our intellectual property to compete against us.
The occurrence of any of these events may have a material adverse effect on our business, financial condition and results of operations. 44 Clinical data obtained subsequent to the implementation of the clinical evidence module may not meet the required objectives, which could delay, limit or prevent additional regulatory approval.
The occurrence of any of these events may have a material adverse effect on our business, financial condition and results of operations. Clinical data obtained subsequent to the implementation of the clinical evidence module may not meet the required objectives, which could delay, limit or prevent additional regulatory clearance or approval.
As a result, we may be unable to further develop, obtain regulatory approval for, manufacture, market, sell and derive revenues from the SGT and the other products in our pipeline based on the Biosensor Platform, and our inability to do so would materially and adversely impact our business.
As a result, we may be unable to further develop, obtain regulatory approval for, manufacture, market, sell and derive revenues from the BPT and the other products in our pipeline based on the Biosensor Platform, and our inability to do so would materially and adversely impact our business.
Price controls may reduce prices to levels significantly below those that would prevail in less regulated markets or limit the volume of products which may be sold, either of which may have a material and adverse effect on potential revenues from sales of the SGT and IFP products.
Price controls may reduce prices to levels significantly below those that would prevail in less regulated markets or limit the volume of products which may be sold, either of which may have a material and adverse effect on potential revenues from sales of the BPT and IFP products.
If the SGT and IFP Drug Screening System or any future diagnostic test based on the Biosensor Platform or IFP Drug Screening System is defectively designed or manufactured, contains defective components or is misused, or if someone claims any of the foregoing, whether or not meritorious, we may become subject to substantial and costly litigation.
If the BPT and IFP Drug Screening System or any future diagnostic test based on the Biosensor Platform or IFP Drug Screening System is defectively designed or manufactured, contains defective components or is misused, or if someone claims any of the foregoing, whether or not meritorious, we may become subject to substantial and costly litigation.
Delays in providing or increasing production or processing capacity could result in additional expense or delays in our clinical evaluation, regulatory submissions and the market launch of our products. In addition, we or our third-party manufacturers or suppliers could make errors that could adversely affect the efficacy or safety of the SGT or cause delays in shipment.
Delays in providing or increasing production or processing capacity could result in additional expense or delays in our clinical evaluation, regulatory submissions and the market launch of our products. In addition, we or our third-party manufacturers or suppliers could make errors that could adversely affect the efficacy or safety of the BPT or cause delays in shipment.
Our management believes that using a wide variety of marketing strategies, including online advertisement and a variety of other pay-for-performance methods may be effective for marketing and generating sales of the SGT and the IFP products, as opposed to relying exclusively on traditional, expensive retail channels.
Our management believes that using a wide variety of marketing strategies, including online advertisement and a variety of other pay-for-performance methods may be effective for marketing and generating sales of the BPT and the IFP products, as opposed to relying exclusively on traditional, expensive retail channels.
If third-party payors do not provide coverage and reimbursement for the use of the SGT and IFP products, our business and prospects may be negatively impacted. Third-party payors, whether governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.
If third-party payors do not provide coverage and reimbursement for the use of the BPT and IFP products, our business and prospects may be negatively impacted. Third-party payors, whether governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.
Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. For example, no government in the areas where we hold our license has approved reimbursement of the SGT or the IFP Drug Screening System.
Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. For example, no government in the areas where we hold our license has approved reimbursement of the BPT or the IFP Drug Screening System.
We intend to seek approval to market the SGT across the APAC Region and expand IFP products offerings in the APAC region. If we obtain approval for SGT in one or more of the jurisdictions within our License Agreement, we will be subject to rules and regulations in those jurisdictions relating to our products.
We intend to seek approval to market the BPT across the APAC Region and expand IFP products offerings in the APAC region. If we obtain approval for BPT in one or more of the jurisdictions within our License Agreement, we will be subject to rules and regulations in those jurisdictions relating to our products.
Although the License Agreement may not be terminated by the Licensor as long as we are continuing our operations, any absence of legal effect of the license could result in the loss of significant rights and could harm our ability to launch the SGT in the market.
Although the License Agreement may not be terminated by the Licensor as long as we are continuing our operations, any absence of legal effect of the license could result in the loss of significant rights and could harm our ability to launch the BPT in the market.
As a result, our business, results of operations and financial condition could be materially and adversely affected. 49 We and the Licensor may be unable to protect or enforce the intellectual property rights licensed to us, which could impair our competitive position.
As a result, our business, results of operations and financial condition could be materially and adversely affected. 37 We and the Licensor may be unable to protect or enforce the intellectual property rights licensed to us, which could impair our competitive position.
We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may harm investor confidence in our company and, as a result, the value of our common stock.
We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may harm investor confidence in our company and the value of our common stock.
The SGT is being designed to address an existing marketplace and must comply with current and evolving customer requirements in order to gain market acceptance. There is a risk that the SGT will not meet anticipated customer requirements or desires.
The BPT is being designed to address an existing marketplace and must comply with current and evolving customer requirements in order to gain market acceptance. There is a risk that the BPT will not meet anticipated customer requirements or desires.
Our patent applications may not result in issued patents and our patents may not be sufficiently broad to protect our technology. 46 The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: ● any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products; ● any of our pending patent applications will issue as patents; ● we will be able to successfully commercialize our products on a substantial scale, if approved, before our relevant patents we may have expire; ● we were the first to make the inventions covered by each of our patents and pending patent applications; ● we were the first to file patent applications for these inventions; ● others will not develop similar or alternative technologies that do not infringe our patents; any of our patents will be found to ultimately be valid and enforceable; ● any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; ● we will develop additional proprietary technologies or products that are separately patentable; or ● our commercial activities or products will not infringe upon the patents of others.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: ● any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products; ● any of our pending patent applications will issue as patents; ● we will be able to successfully commercialize our products on a substantial scale, if approved, before our relevant patents we may have expire; ● we were the first to make the inventions covered by each of our patents and pending patent applications; ● we were the first to file patent applications for these inventions; ● others will not develop similar or alternative technologies that do not infringe our patents; any of our patents will be found to ultimately be valid and enforceable; ● any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; ● we will develop additional proprietary technologies or products that are separately patentable; or ● our commercial activities or products will not infringe upon the patents of others.
Our limited operating history may not be adequate to enable you to fully assess our ability to develop and market the SGT and other tests based on the Biosensor Platform, achieve market acceptance of the SGT and such other tests and respond to competition.
Our limited operating history may not be adequate to enable you to fully assess our ability to develop and market the BPT and tests based on the Biosensor Platform, achieve market acceptance of the BPT and such other tests and respond to competition.
Our plans, business, prospects are substantially dependent on that intellectual property and subject to the limitations relating thereto as set forth in the SGT License Agreement: ● The SGT license granted to us is limited in territorial scope.
Our plans, business, prospects are substantially dependent on that intellectual property and subject to the limitations relating thereto as set forth in the BPT License Agreement: ● The BPT license granted to us is limited in territorial scope.
We cannot guarantee that we or our third-party manufacturers or suppliers will be able to provide the SGT and its components in mass-market quantities in a timely or cost-effective manner, or at all.
We cannot guarantee that we or our third-party manufacturers or suppliers will be able to provide the BPT and its components in mass-market quantities in a timely or cost-effective manner, or at all.
We presently do not possess the manufacturing and processing capacity to meet the production requirements of consumer demand in a timely manner. Accordingly, we may rely on outsourcing the manufacturing of the SGT or its components.
We presently do not possess the manufacturing and processing capacity to meet the production requirements of consumer demand in a timely manner. Accordingly, we may rely on outsourcing the manufacturing of the BPT or its components.
We will depend primarily on the Licensor to file, prosecute, maintain, defend and enforce intellectual property that we license from it and that is material to our business. The intellectual property relating to the COV2T and/or SGT is owned by the Licensor.
We will depend primarily on the Licensor to file, prosecute, maintain, defend and enforce intellectual property that we license from it and that is material to our business. The intellectual property relating to the COV2T and/or BPT is owned by the Licensor.
Factors that could affect our ability to establish the SGT or any future diagnostic test based on the Biosensor Platform include: ● sales of the SGT across their respective jurisdictions may be limited due to the complex nature of the healthcare system in each country and territory in the region, low average personal income, lack of patient cost reimbursement and pricing controls; ● the development of products or devices which could result in a shift of customer preferences away from our device and services and significantly decrease revenue; ● the increased use of improved diabetes drugs that could encourage certain diabetics to test less often, resulting in less usage of self-monitoring (saliva-based, blood-based or otherwise) test device for certain types of diabetics; ● the challenges of developing (or acquiring externally developed) technology solutions that are adequate and competitive in meeting the requirements of next-generation design challenges; ● the significant number of current competitors in the glucose monitoring market who have significantly greater brand recognition and more recognizable trademarks and who have established relationships with diabetes healthcare providers and payors; and ● intense competition to attract acquisition targets, which may make it more difficult for us to acquire companies or technologies at an acceptable price or at all.
Factors that could affect our ability to establish the BPT include: ● sales of the BPT products across their respective jurisdictions may be limited due to the complex nature of the healthcare system in each country and territory in the region, low average personal income, lack of patient cost reimbursement and pricing controls; ● the development of products or devices which could result in a shift of customer preferences away from our device and services and significantly decrease revenue; ● the increased use of improved diabetes drugs that could encourage certain diabetics to test less often, resulting in less usage of self-monitoring (saliva-based, blood-based or otherwise) test device for certain types of diabetics; 21 ● the challenges of developing (or acquiring externally developed) technology solutions that are adequate and competitive in meeting the requirements of next-generation design challenges; ● the significant number of current competitors in the glucose monitoring market who have significantly greater brand recognition and more recognizable trademarks and who have established relationships with diabetes healthcare providers and payors; and ● intense competition to attract acquisition targets, which may make it more difficult for us to acquire companies or technologies at an acceptable price or at all.
Failure in our conventional, online and digital marketing efforts could impact our ability to generate sales. We intend to engage in conventional marketing strategies and also may utilize online and digital marketing in order to create awareness to the SGT and the IFP products.
Failure in our conventional, online and digital marketing efforts could impact our ability to generate sales. We intend to engage in conventional marketing strategies and also may utilize online and digital marketing in order to create awareness to the BPT and the IFP products.
If we or the Licensor are unable to respond to these developments, we may lose competitive position, and our other products may become uncompetitive or obsolete, causing our business and prospects to suffer.
If we or the Licensor (where relevant) are unable to respond to these developments, we may lose competitive position, and our other products may become uncompetitive or obsolete, causing our business and prospects to suffer.
As such, we cannot accurately predict the volume, if any, or timing of any future sales. 37 If the SGT fails to satisfy current or future customer requirements, we may be required to make significant expenditures to redesign the product candidate, and we may have insufficient resources to do so.
As such, we cannot accurately predict the volume, if any, or timing of any future sales. If the BPT fails to satisfy current or future customer requirements, we may be required to make significant expenditures to redesign the product candidate, and we may have insufficient resources to do so.
We and the Licensor have limited foreign intellectual property rights and may not be able to protect those intellectual property rights, which means that we and/or Licensor may not be able to prevent third parties from practicing our inventions or from selling or importing products made using those inventions.
We and where applicable, the Licensor of our products have limited foreign intellectual property rights and may not be able to protect those intellectual property rights, which means that we and/or Licensor may not be able to prevent third parties from practicing our inventions or from selling or importing products made using those inventions.
We plan to commence required regulatory approval process with FDA in the United States, which may be an expensive, lengthy and unpredictable process. We may not be able to obtain any necessary clearances or approval or may be unduly delayed in doing so, which will negatively affect our business, financial condition and results of operations.
We have commenced the required regulatory approval process with FDA in the United States, which may be an expensive, lengthy and unpredictable process. We may not be able to obtain any necessary clearances or approval or may be unduly delayed in doing so, which will negatively affect our business, financial condition and results of operations.
The Amended and Restated Technology License Agreement dated September 12, 2019, which amends and restates all previous license agreements (the “SGT License Agreement”) is limited to the APAC Region. We have no contractual rights to the intellectual property covered in the SGT License Agreement other than as expressly set forth therein.
The Amended and Restated Technology License Agreement dated September 12, 2019, which amends and restates all previous license agreements (the “BPT License Agreement”) is limited to the APAC Region. We have no contractual rights to the intellectual property covered in the BPT License Agreement other than as expressly set forth therein.
We depend on intellectual property licensed from the Licensor for our SGT products, and any absence of legal effect of the license or dispute over the license would significantly harm our business. We are dependent on the intellectual property licensed from the Licensor for our SGT products.
We depend on intellectual property licensed from the Licensor for our BPT related products, and any absence of legal effect of the license or dispute over the license would significantly harm our BPT related business. We are dependent on the intellectual property licensed from the Licensor for our BPT products.
Prior to the acquisition of IFP, the Company’s operations generated no revenue other than income classified as governmental support income received in connection with grants from Australian Government. As at the date of this filing, revenue generated from the sales of IFP products are not enough to cover our operation costs.
Prior to the acquisition of IFP, the Company’s operations generated no revenue other than income classified as governmental support income received in connection with grants from the Australian Government. As at the date of this filing, the revenue generated from the sales of IFP products is not enough to cover our operational costs.
The FDA can delay, limit or deny clearance or approval of a device for many reasons, including: ● Our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are safe or effective for their intended uses; ● The disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials or the interpretation of data from pre-clinical studies or clinical trials; ● Serious and unexpected adverse effects experienced by participants in our clinical trials; ● The data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; ● Our inability to demonstrate that the clinical and other benefits of the product outweigh the risks; ● The manufacturing process or facilities we use may not meet applicable requirements; and ● The potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for clearance or approval. 52 Furthermore, the FDA and state and international authorities have broad enforcement powers.
The FDA can delay, limit or deny clearance or approval of a device for many reasons, including: ● Our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are safe or effective for their intended uses; ● The disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials or the interpretation of data from pre-clinical studies or clinical trials; ● Serious and unexpected adverse effects experienced by participants in our clinical trials; ● The data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; ● Our inability to demonstrate that the clinical and other benefits of the product outweigh the risks; ● The manufacturing process or facilities we use may not meet applicable requirements; and ● The potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for clearance or approval.
The Licensor relies primarily on patent protection and trade secrets, as well as a combination of copyright and trademark laws and nondisclosure and confidentiality agreements to protect its technology and intellectual property rights.
The Licensor relies primarily on patent protection and trade secrets, as well as a combination of copyright and trademark laws and non-disclosure and confidentiality agreements to protect its technology and intellectual property rights.
We market the IFP products in certain jurisdiction as POCT screening device. The clinical studies undertaken to date, may not meet the requirements of certain regulatory bodies for us to market in those jurisdictions.
We market IFP products as a screening device. The clinical studies undertaken to date may not meet the requirements of certain regulatory bodies for us to market in those jurisdictions.
In addition, if any of our competitors are not subject to the FCPA, they may engage in practices that will lead to their receipt of preferential treatment from potential customers and enable them to secure business from potential customers in ways that are unavailable to us. 55 Changes in the economic, political or social conditions or government policies in the APAC Region could have a material adverse effect on our business and operations.
In addition, if any of our competitors are not subject to the FCPA, they may engage in practices that will lead to their receipt of preferential treatment from potential customers and enable them to secure business from potential customers in ways that are unavailable to us. 43 Changes in the economic, political or social conditions or government policies in our target markets could have a material adverse effect on our business and operations.
There are numerous U.S. federal and state, as well as foreign, laws pertaining to healthcare fraud and abuse, including anti-kickback, false claims and transparency laws. Many international healthcare laws and regulations apply to the glucose monitoring business and medical devices. We will be subject to certain regulations regarding commercial practices false claims.
There are numerous U.S. federal and state, as well as foreign, laws pertaining to healthcare fraud and abuse, including anti-kickback, false claims and transparency laws. Many international healthcare laws and regulations apply to the BPT businesses and medical devices. We will be subject to certain regulations regarding commercial practices false claims.
Our intellectual property rights include intellectual property licensed from the Licensor for our SGT Products and rights related to the IFP products.
Our intellectual property rights include intellectual property licensed from the Licensor for our BPT Products and rights related to the IFP products.
We are not profitable and have had negative cash flow from operations since our inception. To fund our operations and develop and commercialize our products (including the SGT and planned applications of IFP Drug Screening System), we have relied primarily on equity and debt financings and government support income.
We are not profitable and have had negative cash flow from operations since our inception. To fund our operations and to develop and commercialize our products (including the BPT and planned applications of IFP Drug Screening System), we have relied primarily on equity and some debt financing and government support income.
We may receive less revenue from future products if any of employees of the Licensor or us successfully claim compensation for their work in developing our intellectual property, which in turn could impact our future profitability. 51 Risks Related to Our Industry Our products and operations are subject to extensive government regulation and oversight both in the United States and abroad.
We may receive less revenue from future products if any of employees of the Licensor or us successfully claim compensation for their work in developing our intellectual property, which in turn could impact our future profitability. Risks Related to Our Industry Our products and operations are subject to extensive government regulation.
Capital may not be available to us on favorable terms, or if at all.
Alternatively, capital may not be available to us on favorable terms, or at all.
While we are using the facilities of Australian National Fabrication Facility to manufacture the SGB for clinical evaluation, we are yet to finalize the manufacturing plan for the production of the SGT and its components on a mass market commercial scale.
While we have been using the facilities of Australian National Fabrication Facility to manufacture the BPT for clinical evaluation, we are yet to finalize the manufacturing plan for the production of the BPT and its components on a mass market commercial scale.
The drug screening, medical testing and glucose monitoring markets may experience rapid technology developments, changes in industry standards, changes in customer requirements, changes in demand, and frequent new product introductions and improvements.
The drug screening, medical testing and biosensor related markets may experience rapid technology developments, changes in industry standards, changes in customer requirements, changes in demand, and frequent new product introductions and improvements.
While we believe that our efforts will enhance our internal control, remediation of the material weaknesses will require further validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, and we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses.
While we believe that our efforts will enhance our internal control, remediation of the material weaknesses will require further validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, and we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses. 45 We are obligated to maintain a system of effective internal control over financial reporting.
The market price for our common stock may be significantly volatile and subject to wide fluctuations in response to factors including the following: ● developments prior to commercial sales relating to regulatory approval, manufacturing and distribution of our products; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● changes in financial or operational estimates or projections; ● conditions in markets generally; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere. 58 In particular, the market prices for securities of medical device companies have historically been particularly volatile.
The market price for our common stock may be significantly volatile and subject to wide fluctuations in response to factors including the following: ● developments prior to commercial sales relating to regulatory approval, manufacturing and distribution of our products; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● changes in financial or operational estimates or projections; ● conditions in markets generally; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
Risks Related to Product Development and Regulatory Approval The regulatory approval process which we may be required to navigate may be expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for the product launch of the SGT and IFP products in certain jurisdiction or our any future product. We intend to market the SGT following regulatory approval.
Risks Related to Product Development and Regulatory Approval The regulatory clearance/approval process which we may be required to navigate may be expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for any product launch by the Company of the BPT and IFP products in certain jurisdiction or our any future product.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES. Our company currently operates out of three strategically located facilities, which cater to different aspects of our business: Sydney, Australia: We rent an office/warehouse space of approximately 2,080 Sq foot. Our office/warehouse facility serves three fundamentals purposes and is used in connection with operations falling under both our IFPG and SGBP segments.
Biggest changeITEM 2. PROPERTIES. Our company currently operates out of three strategically located facilities, which cater to different aspects of our business: Sydney, Australia: We rent an office/warehouse space of approximately 2,080 Sq foot. Our office/warehouse facility serves three fundamental purposes and is used in connection with operations falling under both our IFPG and BPT segments.
We have no immediate plans to upgrade or expand our facilities, given that they are currently adequately meeting our needs. However, we are open to establishing permanent offices for regional heads as required in the future, ensuring that we are well positioned to adapt and grow as our business evolves.
We have no immediate plans to upgrade or expand our facilities, given that they are currently adequately meeting our needs. However, we are open to establishing permanent offices for regional heads as required in the future, ensuring that we are well positioned to adapt and grow as our business evolves. 49

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. We are not currently engaged in any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 61 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. We are not currently engaged in any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on The Nasdaq Global Market under the symbol “INBS”. Holders As of August 22, 2023, there are approximately 495 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on The Nasdaq Capital Market under the symbol “INBS”. Holders As of September 16, 2024, there are approximately 534 holders of record of our common stock.
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12. “ Security Ownership of Certain Beneficial Owners and Management Related Stockholders Matters ” for information with respect to our compensation plans under which equity securities are authorized for issuance. ITEM 6. RESERVED
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12. “ Security Ownership of Certain Beneficial Owners and Management Related Stockholders Matters ” for information with respect to our compensation plans under which equity securities are authorized for issuance. 50 ITEM 6. RESERVED
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Stock Performance Graph We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations: Comparison of the Years Ended June 30, 2023 and 2022 Year Ended June 30, 2023 2022 Revenue $ 1,256,872 $ - Cost of revenue (exclusive of amortization shown separately below) (930,204 ) - Gross profit 326,668 - Other income: Government support income 737,628 437,146 Operating expenses: Selling, general and administrative expenses (8,026,703 ) (4,920,103 ) Development and regulatory approval expenses (507,424 ) (3,853,919 ) Depreciation and amortization (966,732 ) - Goodwill impairment (4,158,670 ) - Total operating expenses (13,659,529 ) (8,774,022 ) Loss from operations (12,595,233 ) (8,336,876 ) Other income (expense): Interest expense (223,534 ) (7,539 ) Realized foreign exchange loss (9,829 ) (3,987 ) Fair value gain on revaluation of financial instruments 2,154,365 - Interest income 9,676 14,426 Total other income 1,930,678 2,900 Net loss (10,664,555 ) (8,333,976 ) Net loss attributable to non-controlling interest (32,835 ) (27,925 ) Net loss attributable to Intelligent Bio Solutions Inc. $ (10,631,720 ) $ (8,306,051 ) Other comprehensive income (loss), net of tax: Foreign currency translation income (loss) $ 212,639 $ (126,875 ) Total other comprehensive income (loss) 212,639 (126,875 ) Comprehensive loss (10,451,916 ) (8,460,851 ) Comprehensive loss attributable to non-controlling interest (32,835 ) (27,925 ) Comprehensive loss attributable to Intelligent Bio Solutions Inc. $ (10,419,081 ) $ (8,432,926 ) Net loss per share, basic and diluted* $ (10.58 ) $ (11.33 ) Weighted average shares outstanding, basic and diluted* 1,004,593 733,263 * Common Shares and per share amount have been retroactively adjusted to reflect the decreased number of shares resulting from a 1 for 20 reverse stock split, throughout this Annual Report on Form 10-K, unless otherwise stated. 65 Results of Operations: Comparison of the Years Ended June 30, 2023, and 2022 Revenue Sales of goods Revenue from sales of goods increased by $1,256,872 to $1,256,872 from $0 for the year ended June 30, 2023, compared to same period in 2022.
Biggest changeComparison of the Years Ended June 30, 2024 and 2023 Year ended June 30, 2024 2023 Revenue $ 3,111,781 $ 1,256,872 Cost of revenue (exclusive of amortization shown separately below) (1,686,155 ) (930,204 ) Gross profit 1,425,626 326,668 Other income: Government support income 424,776 737,628 Operating expenses: Selling, general and administrative expenses (9,258,496 ) (8,026,703 ) Development and regulatory approval expenses (1,673,806 ) (507,424 ) Depreciation and amortization (1,201,274 ) (966,732 ) Goodwill impairment - (4,158,670 ) Total operating expenses (12,133,576 ) (13,659,529 ) Loss from operations (10,283,174 ) (12,595,233 ) Other income (expense), net: Interest expense (167,140 ) (223,534 ) Realized foreign exchange loss (1,178 ) (9,829 ) Fair value gain on revaluation of financial instrument 175,738 2,154,365 Interest income 84,822 9,676 Total other income, net 92,242 1,930,678 Net loss (10,190,932 ) (10,664,555 ) Net loss attributable to non-controlling interest (34,173 ) (32,835 ) Net loss attributable to Intelligent Bio Solutions Inc. $ (10,156,759 ) $ (10,631,720 ) Other comprehensive income (loss), net of tax: Foreign currency translation gain/ (loss) (137,118 ) 212,639 Total other comprehensive income (loss) (137,118 ) 212,639 Comprehensive loss (10,328,050 ) (10,451,916 ) Comprehensive loss attributable to non-controlling interest (34,173 ) (32,835 ) Comprehensive loss attributable to Intelligent Bio Solutions Inc.
The research and development tax refund receivable is recognized as the Company believes that it probable that the amount will be recovered in full through a future claim.
The research and development tax refund receivable is recognized as the Company believes that it is probable that the amount will be recovered in full through a future claim.
Liquidity and Capital Resources We use working capital and cash measures to evaluate the performance of our operations and our ability to meet our financial obligations. We define Working Capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.
Liquidity and Capital Resources We use working capital and cash measures to evaluate the performance of our operations and our ability to meet our financial obligations. We define Working Capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under US GAAP.
A good or service deliverable is transferred to a customer when, or as, the customer obtains control of that good or service deliverable. 69 Grant income Accounting for the grant income does not fall under ASC 606, Revenue from Contracts with Customers , as the Australian Government will not benefit directly from our manufacturing facility.
A good or service deliverable is transferred to a customer when, or as, the customer obtains control of that good or service deliverable. Grant income Accounting for the grant income does not fall under ASC 606, Revenue from Contracts with Customers , as the Australian Government will not benefit directly from our manufacturing facility.
Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Transaction costs associated with business combinations are expensed as incurred and are included in selling, general and administrative expense in the consolidated statements of operations.
Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Transaction costs associated with business combinations are expensed as incurred and are included in selling, general and administrative expenses in the consolidated statements of operations.
The project has been delayed due to global shortages of semiconductors that are used in manufacturing equipment and global supply chain disruption due to Covid-19 pandemic in the preceding year. As of June 30, 2023, the Company has only completed 4 of the 8 milestones in the grant agreement.
The project has been delayed due to global shortages of semiconductors that are used in manufacturing equipment and global supply chain disruption due to Covid-19 pandemic in the preceding year. As of June 30, 2024, the Company has only completed 4 of the 8 milestones in the grant agreement.
Our flagship product from this platform, which is commercially available in certain countries outside of the United States, is the Intelligent Fingerprinting Drug Screening System (the “IFP System” or “IFP Products”), a two-part system that consists of non-invasive, sweat-based fingerprint diagnostic testing products designed to detect drugs of abuse including opioids, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine.
The flagship product from this platform, which is commercially available in certain countries outside of the United States, is the Intelligent Fingerprinting Drug Screening System (the “IFP System” or “IFP Products”), a two-part system that consists of non-invasive, fingerprint sweat-based diagnostic testing products designed to detect drugs of abuse including opiates, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine.
The system comprises a small, tamper-evident drug screening cartridge onto which ten fingerprint sweat samples are collected in under a minute, before the portable analysis unit provides an on-screen result in under ten minutes. Samples collected with our confirmatory kits can also be sent to a third-party laboratory service provider to perform confirmation testing.
The system comprises a small, tamper-evident drug screening cartridge onto which ten fingerprint sweat samples are collected in under a minute before the portable analysis unit provides an on-screen result in under ten minutes. Samples collected with a confirmatory kit can also be sent to a third-party laboratory service provider for confirmation testing.
Overview Intelligent Bio Solutions Inc. (formerly known as GBS Inc.), and its wholly owned Delaware subsidiary, GBS Operations Inc. were each formed on December 5, 2016, under the laws of the state of Delaware.
Overview Intelligent Bio Solutions Inc. and its wholly owned Delaware subsidiary, GBS Operations Inc., were each formed on December 5, 2016, under the laws of the state of Delaware.
R&D tax Refund The Company measures the research and development grant income and receivable by taking into account the time spent by employees on eligible research and development activities and research and development costs incurred to external service providers.
R&D Tax Refund The Company measures the research and development grant income and receivable by calculating the time spent by employees and costs incurred to external service providers on eligible research and development activities.
Our failure to obtain such funding when needed could create a negative impact on our stock price or could potentially lead to a reduction in our operations or the failure of our company. Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern.
Our failure to obtain such funding when needed could create a negative impact on our stock price or could potentially lead to a reduction in our operations or the failure of our Company. Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern unless it can successfully raise additional capital.
Customers include safety-critical industries such as construction, transportation and logistics firms, manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and judicial organizations. ● The Biosensor Platform – Our “Biosensor Platform” consists of a small, printable modified organic thin-film transistor strip that we license across the Asia Pacific Region from Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or “Licensor”).
Customers include safety-critical industries such as construction, transportation and logistics, manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and judicial organizations. ● The Biosensor Platform – A biosensor platform we refer to as the Biosensor Platform Technology (“BPT”), or simply the “Biosensor Platform,” consists of a small, printable modified organic thin-film transistor strip that we license across the Asia Pacific Region (“APAC Region”) from Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or “Licensor”).
Extended Transition Period for “Emerging Growth Companies” We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
See Note 13, Shareholders’ Equity, for further details. 56 Extended Transition Period for “Emerging Growth Companies” We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included at the beginning of this Annual Report on Form 10-K. 62 We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.
We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A. “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included at the beginning of this Annual Report on Form 10-K. We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.
It is calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency. Net loss Net loss attributable to INBS increased by $2,325,669 to $10,631,720 from $8,306,051 for the year ended June 30, 2023, compared to the same period in 2022.
It is calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency. Net loss attributable to INBS Net loss attributable to INBS decreased by $474,961 to $10,156,759 from $10,631,720 for the year ended June 30, 2024, compared to the same period in 2023.
However, there can be no assurance that, in the event that the Company requires additional financing, such financing will be available on terms which are favorable to us, or at all.
There can be no assurance that, in the event that the Company requires additional financing, such financing may be available on terms which are favorable to us, or at all. In the event we require additional capital, there can be no assurances that we will be able to raise such capital on acceptable terms, or at all.
Revenue from the IFPG segment relates to the sale of readers, cartridges and accessories and is summarized as follows: Year Ended June 30, 2023 2022 Sales of goods - cartridges $ 724,304 $ — Sales of goods - readers 335,863 — Other sales 196,705 — Total revenue $ 1,256,872 $ — Cost of revenue Cost of revenue increased by $930,204 to $930,204 from $0 for the year ended June 30, 2023, compared to same period in 2022.
Revenue from the IFPG segment relates to the sale of readers, cartridges and accessories and is summarized as follows: Year Ended June 30, 2024 2023 Sales of goods - cartridges $ 1,549,409 $ 724,304 Sales of goods - readers 938,897 335,863 Other sales 623,475 196,705 Total revenue $ 3,111,781 $ 1,256,872 Cost of revenue Cost of revenue increased by $755,951 to $1,686,155 from $930,204 for the year ended June 30, 2024, compared to same period in 2023.
We perform an annual impairment test on goodwill in the fourth quarter of each fiscal year or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit below its carrying value.
The Company did not recognize any impairments of long-lived assets during the fiscal year ended June 30, 2024 and 2023. 58 We perform an annual impairment test on goodwill in the fourth quarter of each fiscal year or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit below its carrying value.
The Company expects that its cash and cash equivalents as of June 30, 2023, will be insufficient to allow the Company to fund its current operating plan through at least the next twelve months from the issuance of these financial statements.
As of June 30, 2024, we had $6,304,098 in cash and cash equivalents and working capital of $3,083,510. The Company expects that its cash and cash equivalents as of June 30, 2024, may be insufficient to allow the Company to fund its current operating plan through at least the next twelve months from the issuance of these financial statements.
Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date these financial statements are issued. The Company is currently evaluating raising additional funds through private placements and or public equity financing.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date these financial statements are issued.
This increase is primarily driven by impairment of goodwill $4,158,670 offset by a recognition of fair value gain on revaluation of convertible notes and holdback Series C Preferred Stock during the current period of $2,154,365.
This decrease is primarily driven by goodwill impairment charges of $4,158,670 and combined results of operations after the acquisition of IFP offset by a recognition of fair value gain on revaluation of convertible notes and holdback Series C Preferred Stock of $2,062,878 during the same period in 2023.
Operating expenses Selling, general and administrative expenses Selling, general and administrative expenses increased by $3,106,600 to $8,026,703 from $4,920,103 for the year ended June 30, 2023, compared to the same period in 2022.
Operating expenses Selling, general and administrative expenses Selling, general and administrative expenses increased by $1,231,793 to $9,258,496 from $8,026,703 for the year ended June 30, 2024, compared to the same period in 2023.
Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that impact the amounts reported in our consolidated financial statements and accompanying notes that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant.
Off-Balance Sheet Arrangements As of June 30, 2024, we did not have any off-balance sheet arrangements. Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that impact the amounts reported in our consolidated financial statements and accompanying notes that are not readily apparent from other sources.
A total of $127,944 and $51,258 deferred grant income was recognized within other income during the years ended June 30, 2023, and 2022, respectively. Inventories Inventories are stated at the lower of cost or net realizable value. Cost comprises direct materials and, where applicable, other costs that have been incurred in bringing the inventories to their present location and condition.
Inventories, net Inventories are stated at the lower of cost or net realizable value. Cost comprises direct materials and, where applicable, other costs that have been incurred in bringing the inventories to their present location and condition.
As there is no authoritative guidance under U.S. GAAP on accounting for grants to for-profit business entities, we applied International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance by analogy when accounting for the Australian Government grant to the Company.
As there is no authoritative guidance under US GAAP on accounting for grants to for-profit business entities, we applied International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance by analogy when accounting for the Australian Government grant to the Company. 57 The Australian Government grant proceeds, which will be used to reimburse construction costs incurred, meet the definition of grants related to assets as the primary purpose for the payments is to fund the construction of a capital asset.
Refer to note 3 of our consolidated financial statements appearing elsewhere in our Annual Report on Form 10-K. Other income and expenses Interest expense Interest expense increased by $215,995 to $223,534 from $7,539 for the year ended June 30, 2023, as compared to the same period in 2022.
Goodwill Impairment The goodwill impairment expenses decreased by $4,158,670 to $0 from $4,158,670 for the year ended June 30, 2024, compared to the same period in 2023. Refer to note 3 of our consolidated financial statements appearing elsewhere in our Annual Report on Form 10-K.
Intellectual property acquired for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) are expensed in research and development costs at the time the costs are incurred.
Intellectual property acquired for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) are expensed in research and development costs at the time the costs are incurred. 59 In certain circumstances, the Company may be required to make advance payments to vendors for goods or services that will be received in the future for use in R&D activities.
We operate globally with the objective of providing intelligent, pain-free, and accessible solutions that improve the quality of life. Our current product portfolio includes: ● Intelligent Fingerprinting Platform - Our proprietary portable platform analyzes fingerprint sweat using a one-time (recyclable) cartridge and portable handheld reader.
The Company’s current product portfolio includes: ● Intelligent Fingerprinting Platform: A proprietary portable platform that analyzes fingerprint sweat using a one-time cartridge and portable handheld reader.
In certain circumstances, the Company may be required to make advance payments to vendors for goods or services that will be received in the future for use in R&D activities. In such circumstances, the non-refundable advance payments are deferred and capitalized, even when there is no alternative future use for the R&D, until the related goods or services are provided.
In such circumstances, the non-refundable advance payments are deferred and capitalized, even when there is no alternative future use for the R&D, until the related goods or services are provided. In circumstances where amounts have been paid in excess of costs incurred, the Company records a prepaid expense.
Our Australian subsidiary Intelligent Bio Solutions (APAC) Pty Ltd (formerly known as Glucose Biosensor Systems (Greater China) Pty Ltd) was formed on August 4, 2016, under the laws of New South Wales, Australia and was renamed to Intelligent Bio Solutions (APAC) Pty Ltd on January 6, 2023.
The Company’s Australian subsidiary, Intelligent Bio Solutions (APAC) Pty Ltd, was formed on August 4, 2016, under the laws of New South Wales, Australia and was renamed to Intelligent Bio Solutions (APAC) Pty Ltd on January 6, 2023. On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales (the “IFP Acquisition”).
The increase in loss was largely attributable to the Company’s settled translations in currencies other than its functional currencies. Fair value gain on revaluation of financial instruments The fair value gain increased by $2,154,365 to $2,154,365 from $0 for the year ended June 30, 2023, as compared to the same period in 2022.
Fair value gain on revaluation of financial instruments The fair value gain decreased by $1,978,627 to $175,738 from $2,154,365 for the year ended June 30, 2024, as compared to the same period in 2023.
As the Company’s operating activities increase, we expect its selling, general and administrative costs will include additional costs in overhead contribution, consultancy, as well as an increase in employee related costs associated with a higher headcount. 66 Development and regulatory expenses Development and regulatory expenses decreased by $3,346,495 to $507,424 from $3,853,919 for the year ended June 30, 2023, compared to the same period in 2022.
As the Company’s operating activities increase, we expect its general and administrative costs will include additional costs in overhead contribution, consultancy, as well as an increase in employee-related costs associated with a higher headcount.
The Company recognized an impairment charge of $ 4.2 million in the IFPG segment, which is related to the goodwill associated with the IFP Acquisition. 70 Business Combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition.
Following the impairment charge the goodwill balance was zero. Business Combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition.
As the Company’s operating activities increase, we expect its development and regulatory expenses to increase in future periods. Depreciation and amortization Depreciation and amortization increased by $966,732 to $966,732 from $0 for the year ended June 30, 2023, compared to same period in 2022.
Depreciation and amortization Depreciation and amortization increased by $234,542 to $1,201,274 from $966,732 for the year ended June 30, 2024, compared to same period in 2023.
We assess impairment of assets groups, including intangible assets at least annually or more frequently if there are any indicators for impairment. Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination.
Impairment of Long-lived Assets and Goodwill Long-lived assets consist of property and equipment, right-of-use assets and other intangible assets. We assess impairment of assets groups, including intangible assets at least annually or more frequently if there are any indicators for impairment.
The gross profit is primarily attributable to the IFPG segment. Government support income Government support income increased by $300,482 to $737,628 from $437,146 for the year ended June 30, 2023, compared to same period in 2022.
This has been driven by increased revenue from acquiring new customers. Government support income Government support income in the IFPG and BPT segments decreased by $312,852 to $424,776 from $737,628 for the year ended June 30, 2024, compared to same period in 2023.
On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (IFP), a company registered in England and Wales (the IFP Acquisition). Our headquarters are in New York, New York. We are a medical technology company focused on developing and delivering non-invasive, rapid and pain free innovative testing and screening solutions.
The Company’s headquarters are in New York, New York. Intelligent Bio Solutions Inc. is a medical technology company focused on developing and delivering intelligent, rapid, non-invasive testing and screening solutions. The Company operates globally with the objective of providing innovative and accessible solutions that improve the quality of life.
Net realizable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Impairment of Long-lived Assets and Goodwill Long-lived assets consist of property and equipment, right-of-use assets and other intangible assets.
Net realizable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. General market conditions, as well as the Company’s research activities, can cause certain of its products to become obsolete.
This increase is due to the revaluation gains on the convertible notes and contingent consideration for holdback shares resulting from the acquisition of IFP. Interest income Interest income decreased by $4,750 to $9,676 from $14,426 for the year ended June 30, 2023, as compared to the same period in 2022.
This decrease is due to the revaluation gains on the convertible notes and contingent consideration for holdback Series C Preferred Stock resulting from the acquisition of IFP. The convertible notes and holdback Series C Preferred Stock shares were converted into common stock in May 2023 and October 2023, respectively.
Business – Conversion of Convertible Debt and Preferred Stock .” Income tax (expense) benefit There was no income tax expense for the year ended June 30, 2023, and 2022, respectively, as the Company has established a full valuation allowance for all its deferred tax assets. 67 Other comprehensive income Foreign currency translation gain/(loss) Unrealized foreign currency translation gain increased by $339,514 to a gain of $212,639 from a loss of $126,875 for the year ended June 30, 2023, compared to the same period in 2022.
Other comprehensive income Foreign currency translation gain/(loss) Unrealized foreign currency translation gain decreased by $349,757 to a loss of $137,118 from a gain of $212,639 for the year ended June 30, 2024, compared to the same period in 2023.
This increase was attributable to the interest expense recorded for convertible notes after the acquisition of IFP. Realized foreign exchange loss Realized foreign exchange loss increased by $5,842 to $9,829 from $3,987 for the year ended June 30, 2023, compared to the same period in 2022.
Realized foreign exchange loss Realized foreign exchange loss decreased by $8,651 to $1,178 from $9,829 for the year ended June 30, 2024, compared to the same period in 2023. This decrease was largely attributable to favorable exchange rates while settling transactions in currencies other than its functional currencies.
If we determine it is more likely than not that goodwill is not impaired, a quantitative test is not necessary.
If we determine it is more likely than not that goodwill is not impaired, a quantitative test is not necessary. During the fiscal year ended June 30, 2023, the Company recognized an impairment charge of $4.2 million in the IFPG segment, which was related to the goodwill associated with the IFP Acquisition.
Cost of revenue relates to the direct labor, direct material costs and direct overhead costs incurred in the production of the goods. Gross profit Gross profit increased by $326,668 to $326,668 from $0 for the year ended June 30, 2023, compared to same period in 2022. This is due to the acquisition of IFP in October 2022.
Cost of revenue Year Ended June 30, 2024 2023 Direct material cost 1,017,218 369,217 Direct labor cost 646,246 533,618 Direct overhead cost 22,691 27,369 Total cost of revenue $ 1,686,155 $ 930,204 Gross profit Year Ended June 30, 2024 2023 Revenue $ 3,111,781 $ 1,256,872 Direct material cost (1,017,218 ) (369,217 ) Direct labor cost (646,246 ) (533,618 ) Direct overhead cost (22,691 ) (27,369 ) Cost of revenue (1,686,155 ) (930,204 ) Gross profit 1,425,626 326,668 Gross profit margin 45.81 % 25.99 % Gross profit increased by $1,098,958 to $1,425,626 from $326,668 for the year ended June 30, 2024, compared to same period in 2023.
Removed
We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A.
Added
To supplement our consolidated financial statements, which are prepared and presented in accordance with US GAAP, we present contribution margin and contribution margin %, which are non-GAAP financial measures. Contribution margin and contribution margin % are presented in the section titled “Contribution Margin (non-GAAP)”.
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The Biosensor Platform, which is designed to detect multiple biological analytes by substituting the Glucose Oxidase (“GOX”) enzyme with a suitable alternative for each analyte, is currently in the development stage.
Added
These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with US GAAP. These measures may be different from non—GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
Removed
Our flagship product candidate based on the Biosensor Platform technology is the Saliva Glucose Biosensor (“SGB” and, together with a software app that interfaces the SGB with the Company’s digital information system, the Saliva Glucose Test or “SGT”), a Point of Care Test (POCT) expected to complement the finger pricking invasive blood glucose monitoring test for diabetic patients.
Added
Moreover, presentation of contribution and contribution margin is provided for year-over-year comparison purposes.
Removed
Our products based on the SGT are referred to herein as the “SGT products.” These platform technologies have the potential to develop a range of POCT including the modalities of clinical chemistry, immunology, tumor markers, allergens, and endocrinology. 63 Highlights of Achievements Our major highlights of achievements for the fiscal year 2023: ● On June 28, 2023, the Company announced it had received guidance from the United States Food and Drug Administration (the “FDA”) regarding the regulatory classification of its Intelligent Fingerprinting Drug Screening Cartridge.
Added
We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.
Removed
The FDA provisionally determined that the cartridge falls within 21 CFR 862.3650, Opiate Test System, a Class II type device that requires the submission of a pre-market notification 510(k) and the FDA’s clearance prior to marketing.
Added
Unless otherwise indicated, all share and per share information in this report gives effect to the reverse stock split of our outstanding common stock, which was effected at a ratio of 1-for-12 as of 5:00 p.m. Eastern Time on January 26, 2024.
Removed
The preliminary assessment, in response to the Company’s March 2023 513(g) request for product classification, provides a clear regulatory pathway for INBS as part of the Company’s expansion strategy into the United States.
Added
The Biosensor Platform is designed to detect multiple biological analytes by substituting the top enzyme layer of the biosensor to suit each analyte. This platform technology has the potential to develop a range of Point of Care Tests (“POCT”), including the modalities of clinical chemistry, immunology, tumor markers, allergens, and endocrinology.
Removed
The Company intends to submit a 510(k) pre-market notification for its proprietary Intelligent Fingerprinting Drug Screening Cartridge. ● In June 2023, the Company concluded its study on the Correlation of Glucose and Cortisol between Oral Fluid and Blood Compartments.
Added
We understand that following the appointment of a liquidator to LSBD, the intellectual property rights licensed by us from the Licensor (LSBD) have reverted to the University of Newcastle. The Company is in early-stage discussions regarding the potential restructuring of future licensing of BPT and products with the University of Newcastle.
Removed
The study aimed to determine the degree of correlation between saliva and blood glucose and cortisol levels in subjects with and without diabetes.
Added
A timeline for these discussions has not yet been established. 51 Results of Operations: Key Financial Performance Year Ended June 30, 2024 Year Ended June 30, 2023 % Change Revenue $ 3,111,781 $ 1,256,872 +147.58 % Gross Profit $ 1,425,626 $ 326,668 +336.41 % Gross Profit % 45.81 % 25.99 % +19.82 % The Company continues to meet its objectives of strong market penetration and improved margins achieved through economies of scale with enough volume to achieve growth of 147.58% in sales revenue and 336.41% growth in gross profit for the fiscal year ended June 30, 2024, compared to the same period in fiscal 2023.
Removed
The results of the study indicate that saliva sampling and analysis has potential use in various applications, including as an aid in screening for diabetes in unhygienic environments where blood sampling is risky, and in point-of-care or at-home cortisol tests where characterizing early morning levels and daily variation is important.
Added
Furthermore, the Company is set to compound this growth with the numbers of readers reaching 1,037 on customer sites, as of June 2024.
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The Company intends to compile a white paper summarizing the findings as it determines the next phase of development. ● On May 2, 2023, the Company announced the recruitment of its Australian sales force and the addition of a new distribution hub and office facility to manage sales and operations, significantly expanding its ability to service customers throughout the Asia Pacific region. ● On March 15, 2023, the Company announced that it has selected Human and Supplement Testing Australia (“HASTA”), Australia’s largest independent sports drug testing laboratory, as its preferred drug testing specialist in Australia to complete lab-based confirmation testing. ● On February 16, 2023, the Company announced that it has filed a 513(g) submission with the United States Food and Drug Administration (FDA) for its Intelligent Fingerprinting Drug Screening Cartridge.
Added
(10,293,877 ) (10,419,081 ) Net loss per share, basic and diluted* $ (6.38 ) $ (127.00 ) Weighted average units outstanding, basic and diluted * 1,592,746 83,717 The accompanying notes are an integral part of these consolidated financial statements. * Common Stock and per share amounts have been retroactively adjusted to reflect the decreased number of shares resulting from the 1-for-12 reverse stock split effected on January 26, 2024, throughout the consolidated financial statement unless otherwise stated. 52 Results of Operations: Comparison of the Years Ended June 30, 2024, and 2023 Revenue Sales of goods Revenue from sales of goods increased by $1,854,909 to $3,111,781 from $1,256,872 for the year ended June 30, 2024, compared to same period in 2023.
Removed
The submission will allow Intelligent Bio Solutions to determine the most suitable FDA regulatory pathway as part of the Company’s strategy for expansion into the U.S. market. 64 ● On January 23, 2023, the Company published the results of Milestone 7, a phase of its biosensor platform development at the University of Newcastle, Australia, that included testing time-to-result (TTR), sensitivity, and reproducibility.
Added
This is due to the expansion of the customer base, both in the pre-existing markets and expansion into new regions. We expect this trend to continue as we expand into new markets in the future.
Removed
The results showed a record 4x improvement in TTR, enabling the biosensor to return test results in under one minute. ● During the year, the Company continued to expand its customer base by entering into sales contracts with Haulier, Eastern Airways, Hozelock, Boughey Distribution, A&F Sprinklers and Dodman Limited. ● The Company completed the acquisition of Intelligent Fingerprinting Limited (IFP), a company registered in England and Wales and on October 4, 2022 (the IFP Acquisition).
Added
Cost of revenue relates to the direct labor, direct material costs and direct overhead costs incurred in the production of the goods. This is in line with expectations, as the business expands into new markets. The following table shows the composition of cost of revenue.
Removed
IFP owns a portfolio of intellectual property for diagnostic tests and associated technologies including drug testing through the analysis of fingerprint sweat.
Added
This has been driven by increased revenue from acquiring new customers. 53 The gross profit is primarily attributable to the IFPG segment.
Removed
The acquisition of IFP has expanded the Company’s platform of rapid, non-invasive diagnostic testing technologies. ● On July 13, 2022, INBS completed Institutional Review Board (IRB) approved clinical studies at the Diabetes Research Institute of Sutter Health’s Mills-Peninsula Medical Center (MPMC) in San Mateo, California.
Added
Contribution margin (non-GAAP) Year Ended June 30, 2024 2023 Revenue $ 3,111,781 $ 1,256,872 Direct material cost (1,017,218 ) (369,217 ) Contribution margin (non-GAAP) 2,094,563 887,655 Contribution margin % (non-GAAP) 67.31 % 70.62 % Contribution margin, which is a non-GAAP measure of our financial performance, increased by $1,206,908 to $2,094,563 from $887,655 for the year ended June 30, 2024, compared to same period in 2023.
Removed
The study design was intended to support the clinical development of its next-generation Saliva Glucose Biosensor. A total of 40 adult subjects with type 2 diabetes were recruited for the study. Nearly 1,400 samples of blood and oral fluids were collected and analyzed.
Added
This decrease was primarily attributable to an adjustment for a potential refund of the Australian Government grant if we are unable to complete the project on time.
Removed
The subsequent statistical analysis of the correlation of glucose levels among these sample types will act as foundation for building a robust portfolio of prospective clinical evidence, forming the backbone for future regulatory submissions.
Added
This increase is primarily due to engagement of consultants for marketing, media and investor relationship management, capital raising, professional fees for legal and compliance as the Company continues to expand its business and conduct clinical study as it progresses along its 510(k) pathway for FDA clearance.
Removed
This is due to the acquisition of IFP in October 2022, whose results of operations are consolidated and launch of fingerprint drug testing in APAC region via Intelligent Bio Solutions (APAC) Pty Ltd. The acquisition provided the Company with access to commercially available Fingerprinting drug testing system which is currently being marketed in Europe and Asia Pacific Region.
Added
We aim to ensure that our cost efficiency is increased over the same period whilst we streamline the business, delivering increased value for investors. 54 Development and regulatory approval expenses Development and regulatory approval expenses increased by $1,166,382 to $1,673,806 from $507,424 for the year ended June 30, 2024, compared to the same period in 2023.
Removed
This increase was primarily attributable to qualifying research and development expenditures incurred during the current period including the completion of Milestone 7, a phase of its biosensor platform development at the University of Newcastle, Australia.
Added
This increase is primarily driven by amounts spent on in-house R&D staff and timing of R&D work performed by the research partners engaged by the Company. As the Company continues its FDA 501(k) clinical study plan, we expect development and regulatory expenses to increase in future periods, as demonstrated by the results above.

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