UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission
File Number
(Exact name of Registrant as specified in its Charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ NO ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO
As of February 12, 2026, there were shares of the registrant’s Common Stock issued and outstanding.
Table of Contents
| Page | ||
| PART I. | FINANCIAL INFORMATION | 3 |
| Item 1. | Financial Statements (unaudited) | |
| Condensed Consolidated Balance Sheets | 3 | |
| Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) | 4 | |
| Condensed Consolidated Statements of Changes in Shareholders’ Equity | 5 | |
| Condensed Consolidated Statements of Cash Flows | 6 | |
| Notes to Condensed Consolidated Financial Statements | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 22 |
| Item 4. | Controls and Procedures | 22 |
| PART II. | OTHER INFORMATION | 24 |
| Item 1. | Legal Proceedings | 24 |
| Item 1A. | Risk Factors | 24 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 26 |
| Item 3. | Defaults Upon Senior Securities | 26 |
| Item 4. | Mine Safety Disclosures | 26 |
| Item 5. | Other Information | 26 |
| Item 6. | Exhibits | 27 |
| Signatures | 28 | |
| 2 |
PART I. FINANCIAL INFORMATION
Intelligent Bio Solutions Inc.
Condensed Consolidated Balance Sheets
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Subscription receivable from shareholders, net | ||||||||
| Inventories | ||||||||
| Research and development tax incentive receivable | ||||||||
| Assets held for sale | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Intangibles, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Current portion of operating lease liabilities | ||||||||
| Current employee benefit liabilities | ||||||||
| Notes payable | ||||||||
| Total current liabilities | ||||||||
| Employee benefit liabilities, less current portion | ||||||||
| Operating lease liabilities, less current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Shareholders’ equity | ||||||||
| Common stock, $ par value, shares authorized, shares issued and outstanding, respectively, as of December 31, 2025; and shares issued and outstanding, respectively, as of June 30, 2025* | ||||||||
| Treasury stock, at cost, shares as of December 31, 2025 and June 30, 2025* | ( | ) | ( | ) | ||||
| Additional paid-in capital* | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total consolidated Intelligent Bio Solutions Inc. equity | ||||||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| * |
| 3 |
Intelligent Bio Solutions Inc.
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss)*
(Unaudited)
| Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue (exclusive of amortization shown separately below) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Other income | ||||||||||||||||
| Government support income | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Development and regulatory approval expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment of long-lived assets | ( | ) | ( | ) | ||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense), net | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Realized foreign exchange loss | ( | ) | ( | ) | ||||||||||||
| Interest income | ||||||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to Intelligent Bio Solutions Inc. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation gain (loss) | ( | ) | ||||||||||||||
| Total other comprehensive income (loss) | ( | ) | ||||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to Intelligent Bio Solutions Inc. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share, basic and diluted* | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares outstanding, basic and diluted* | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| * |
| 4 |
Intelligent Bio Solutions Inc.
Condensed Consolidated Statements of Changes in Shareholders’ Equity*
(Unaudited)
| Additional | Other | Non- | Total | |||||||||||||||||||||||||||||||||
| Common stock | Treasury stock | paid-in | Accumulated | comprehensive | controlling | shareholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficit | income (loss) | interest | equity | ||||||||||||||||||||||||||||
| Balance, June 30, 2025* | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Issuance of restricted stock to vendors | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs At-the- Market Offerings | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for warrants exercised, net of issuance costs | - | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, September 30, 2025 | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Reverse stock split rounding adjustment | ( | ) | - | |||||||||||||||||||||||||||||||||
| Issuance of restricted stock to vendors | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs At-the- Market Offerings | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for warrants exercised, net of issuance costs | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs | - | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Common stock | Treasury stock | Additional paid-in | Accumulated | Other comprehensive | Non- controlling | Total shareholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficit | income (loss) | interest | equity | ||||||||||||||||||||||||||||
| Balance, June 30, 2024* | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | | ||||||||||||||||||
| Issuance of common stock upon exercise of warrants | - | |||||||||||||||||||||||||||||||||||
| Stock awards issued to employees | - | |||||||||||||||||||||||||||||||||||
| Issuance of restricted stock to vendors | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs At-the- Market Offerings | - | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, September 30, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Issuance of restricted stock to vendors | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs At-the- Market Offerings | - | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 |
|
| $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| * |
| 5 |
Intelligent Bio Solutions Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Impairment of long-lived assets | ||||||||
| Stock-based compensation | ||||||||
| Non-cash adjustment on R&D expenditure claims | ( | ) | ||||||
| Non-cash other operating activities | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Research and development tax incentive receivable | ||||||||
| Other current assets | ||||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Long-term employee benefit liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing activities | ||||||||
| Proceeds from sale of assets held for sale | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from Financing Activities | ||||||||
| Proceeds from issuance of common stock, net of issuance costs | ||||||||
| Proceeds from issuance of common stock for warrants exercised, net of issuance costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign exchange rates on cash and cash equivalents | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of the period | $ | $ | ||||||
| Non-cash investing and financing activities | ||||||||
| Issuance of shares for a subscription receivable from shareholders, net | $ | $ | ||||||
| Operating lease assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
Intelligent Bio Solutions Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF THE 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. The Company’s 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. On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales. Our headquarters are in New York City.
Unless context requires or indicates otherwise, the terms “we,” “us,” “our,” “Company,” or “INBS” refer to Intelligent Bio Solutions Inc. together with its consolidated subsidiaries.
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.
Reverse Stock Split
December 2025 Reverse Stock Split
On
December 12, 2025, the Company filed a certificate of amendment to its amended and restated certificate of incorporation to effect,
as of 11:59 p.m. December 15, 2025, a
Unless otherwise indicated, all issued and outstanding shares of common stock, per share amounts and outstanding equity instruments and awards exercisable into common stock contained in the unaudited condensed consolidated financial statements of the Company and notes thereto have been retroactively adjusted to reflect the 2025 Reverse Stock Split for all prior periods presented.
NOTE 2. LIQUIDITY AND GOING CONCERN
Through
December 31, 2025, the Company has financed its operations primarily through proceeds from public offerings and private placements of
equity securities, warrant inducement transactions, existing trade and shareholder financing arrangements, and the incurrence of debt.
The Company incurred net losses of $
The Company expects to continue to incur operating losses for the foreseeable future and does not anticipate generating positive cash flows from operating activities in the near term. The Company’s ability to achieve profitability depends on, among other things, the successful completion of regulatory approval processes in the United States and other markets, expansion of its revenue base into target markets, and the continued development and commercialization of its products. The achievement of these objectives is subject to significant risks and uncertainties, and there can be no assurance that they will be achieved within the next 12 months.
The Company has evaluated whether conditions and
events, considered in the aggregate, raise substantial doubt about its ability to continue as a going concern within one year from the
issuance date of these unaudited condensed consolidated financial statements. Management believes there is a material risk that the Company’s
cash and cash equivalents of approximately $
While the Company intends to obtain additional funding through equity or debt financings, strategic collaborations, or other arrangements, there can be no assurance that such funding will be available on acceptable terms, or at all. If the Company is unable to obtain additional financing when needed, it may be required to delay, reduce, or curtail the scope of its operations and development activities.
Accordingly, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.
| 7 |
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“US GAAP” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, our unaudited condensed consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. Normal and recurring adjustments considered necessary for a fair statement of the results for the interim periods, in the opinion of the Company’s management, have been included. Operating results for the three and six months ended December 31, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2026. The accompanying unaudited condensed consolidated financial statements and related footnote disclosures should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the fiscal year ended June 30, 2025, which was filed with the SEC on August 15, 2025 (the “2025 Form 10-K”).
The unaudited condensed consolidated financial statements and notes thereto give retrospective effect for the December 2025 Reverse Stock Split for all periods presented. All common stock, options exercisable for common stock, restricted stock units, warrants, and per share amounts contained in the unaudited condensed consolidated financial statements have been retrospectively adjusted to reflect the December 2025 Reverse Stock Split for all periods presented.
Principles of consolidation
These unaudited condensed consolidated financial statements include the accounts of the Company, all wholly owned and majority-owned subsidiaries in which the Company has a controlling voting interest and, when applicable, variable interest entities in which the Company has a controlling financial interest or is the primary beneficiary. Investments in affiliates where the Company does not exert a controlling financial interest are not consolidated.
All significant inter-company transactions and balances have been eliminated upon consolidation.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management continually evaluates the estimates and judgments it uses. These estimates and judgments have been applied in a manner consistent with prior periods and there are no known trends, commitments, events or uncertainties that management believes will materially affect the methodology or assumptions utilized in making these estimates and judgments in these unaudited condensed consolidated financial statements.
Significant estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include the useful lives and impairments of long-lived assets, realizability of inventory, the allocation of transaction price among various performance obligations, fair value of warrants, realization of deferred tax assets and related uncertain tax positions, valuation of stock-based compensation awards and the allowance for credit losses. Actual results could materially differ from these judgments and estimates under different assumptions or conditions.
Segment Reporting
Accounting Standard Codification (“ASC”) 280, Segment Reporting, defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer performs the function that allocates resources and assesses performance, and thus serves as the Company’s CODM. The CODM reviews the assets, operating results, and financial metrics for four geographic segments:
| ● | Americas consists of North America and South America |
| ● | United Kingdom consists of England, Scotland, Northern Ireland and Wales |
| ● | Asia Pacific (“APAC”) consists of Southeast Asia and Oceania |
| ● | Rest of World consists of all other countries |
The CODM decides how to allocate resources based on a review of financial information presented on a consolidated basis accompanied by disaggregated information about revenue by product types, other income and long-lived assets for the purpose of allocating resources and evaluating financial performance for each geographic region. Accordingly, there are four reportable segments.
Accounts Receivable and Allowances for Credit Losses
Accounts
receivable primarily arise out of sales to customers. The allowance for credit losses is an amount equal to the estimated probable losses
net of recoveries in accounts receivable using the incurred loss methodology. After considering current economic conditions and financial
stability of its customers, an allowance for credit losses is maintained at a level which management believes is sufficient to cover
all probable future credit losses as of the balance sheet date based on specific reserves and an expectation of future economic conditions
that might impact collectability. Accounts receivable are carried net of allowances for credit losses as of December 31, 2025 and June
30, 2025. Account balances are charged off against the allowance when all reasonable attempts to collect have failed. Actual write-offs
may be in excess of the Company’s estimated allowance. The allowance for credit losses was $
| 8 |
Concentration of credit risk
The
Company places its cash and cash equivalents, which may at times be in excess of Australia’s Financial Claims Scheme, the U.K.
Financial Services Compensation Scheme or the U.S. Federal Deposit Insurance Corporation insurance limits, with high credit quality financial
institutions and attempts to limit the amount of credit exposure with any one institution. The amounts over these insured limits as of
December 31, 2025 and June 30, 2025 were $
Major
Customer - One customer accounted for
Major Supplier - The Company’s largest suppliers accounted for % and % of purchases for the three months ended December 31, 2025 and 2024, respectively. The Company’s largest suppliers accounted for % and % of purchases for the six months ended December 31, 2025 and 2024, respectively. The Company relies on various suppliers for its operations. For the purpose of supplier concentration analysis, “purchases” include only invoiced costs directly attributable to direct material costs.
Disaggregated revenue
The following table disaggregates the Company’s revenue by product type:
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Sales of goods - cartridges | $ | $ | $ | $ | ||||||||||||
| Sales of goods - readers | ||||||||||||||||
| Other sales - accessories | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Government support income
The following table disaggregates the Company’s government support income by type:
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Grant income | $ | $ | $ | $ | ||||||||||||
| Research and development (“R&D”) tax refund | ||||||||||||||||
| Total government support income | $ | $ | $ | $ | ||||||||||||
Foreign currency
The Company’s reporting currency is the U.S. Dollar (“USD”). The functional currency for each foreign subsidiary included in these unaudited condensed consolidated financial statements is the applicable local currency of each entity.
For each entity whose functional currency is not the USD, assets and liabilities are translated into USD using the exchange rate in effect on the balance sheet date and revenue and expenses are translated into USD using the average rate in effect for period. Translation gains and losses are recorded as a foreign currency translation adjustment as a component of other comprehensive income (loss), which is a component of accumulated other comprehensive income (loss) on the accompanying unaudited condensed consolidated balance sheets.
Cash flows are also translated at average translation rates for the periods; therefore, amounts reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.
Recent Accounting Pronouncements
As the Company is an emerging growth company, 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.
Pending Adoption:
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires greater disaggregation of information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. The ASU is effective for annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025, with early adoption permitted. The ASU should be applied on a prospective basis although retrospective application is permitted. We are currently evaluating the impact of this ASU on our unaudited condensed consolidated financial statements. The Company expects to adopt this guidance in its Annual Report on Form 10-K for the year ending June 30, 2027. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to enhance transparency of the nature and function of expenses, primarily through additional disclosures of certain cost and expenses. ASU 2024-03 will be effective for our annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. We expect the adoption of this ASU will have no impact on our financial position or our results of operations but will result in additional disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (ASC Topic 326), which amends the credit losses guidance. Specifically, the ASU provides a practical expedient whereby an entity can assume that current conditions as of the balance sheet date will not change for the remaining life of the asset (e.g., the account receivable). This guidance is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of this standard on the unaudited condensed consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The standard improves the guidance in Topic 270 by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The ASU also provides additional guidance on what disclosures should be provided in interim reporting periods. The new guidance will become effective for annual reporting periods beginning on January 1, 2028 and interim reporting periods beginning on January 1, 2029, will require either prospective or retrospective presentation, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Company’s unaudited condensed consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The standard represents changes to the FASB ASC that (1) clarify, (2) correct errors, or (3) make minor improvements so the FASB ASC is easier to understand and apply. The new guidance will become effective for annual and interim periods beginning on January 1, 2027, with early adoption permitted. Management is currently evaluating the impact of the new standard on the Company’s unaudited condensed consolidated financial statements.
Other ASUs issued but not effective until after December 31, 2025, are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations and/or cash flows.
| 9 |
NOTE 4. SEGMENT INFORMATION
The following tables set forth the Company’s revenue, government support income, net income (loss) and long-lived assets and inventories by operating and reportable segments.
A) Revenue, government support income and net loss
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| Revenue | 2025 | 2024(1) | 2025 | 2024(1) | ||||||||||||
| United Kingdom | $ | $ | $ | $ | ||||||||||||
| APAC | ||||||||||||||||
| Americas | ||||||||||||||||
| Rest of world | ||||||||||||||||
| Total Revenue | $ | $ | $ | $ | ||||||||||||
| Government Support Income | ||||||||||||||||
| United Kingdom | $ | ( | ) | $ | $ | $ | ||||||||||
| APAC | ||||||||||||||||
| Total Government Support Income | $ | $ | $ | $ | ||||||||||||
| Net Income (Loss) | ||||||||||||||||
| United Kingdom | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| APAC | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Americas | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Rest of world | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| (1) |
| 10 |
B) Long-lived assets and inventories
| Long-lived assets, net | December 31, 2025 | June 30, 2025 | ||||||
| United Kingdom | $ | $ | ||||||
| APAC | ||||||||
| Total Long-Lived Assets | $ | $ | ||||||
| Inventories | ||||||||
| United Kingdom | $ | $ | ||||||
| APAC | ||||||||
| Total Inventories | $ | $ | ||||||
| Total Long-Lived Assets and Inventories | $ | $ | ||||||
The Company’s segment revenue, segment expenses, segment net income (loss), and a reconciliation of the total reportable segment’s net income (loss) to the consolidated net income(loss) are as follows:
Three Months Ended December 31, 2025 | Six Months Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||
| United Kingdom | APAC | Americas | Rest of world | Total | United Kingdom | APAC | Americas | Rest of world | Total | |||||||||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Add: Government support income | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Less: Cost of revenue (exclusive of amortization shown separately below) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Development and regulatory approval expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Impairment of long-lived assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Other segment items(1) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Segment net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
| (1) | Other segment items included interest income, interest expense and realized currency loss. |
| 11 |
Three Months Ended December 31, 2024(1) | Six Months Ended December 31, 2024(1) | |||||||||||||||||||||||||||||||||||||||
| United Kingdom | APAC | Americas | Rest of world | Total | United Kingdom | APAC | Americas | Rest of world | Total | |||||||||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Add: Government support income | ||||||||||||||||||||||||||||||||||||||||
| Less: Cost of revenue (exclusive of amortization shown separately below) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Development and regulatory approval expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Impairment of long-lived assets | ||||||||||||||||||||||||||||||||||||||||
| Other segment items(2) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Segment net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
| (1) | |
| (2) | Other segment items included interest income, interest expense and realized currency loss. |
NOTE 5. INVENTORIES
Inventories consist of the following:
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Raw material | $ | $ | ||||||
| Work-in-progress | ||||||||
| Finished goods | ||||||||
| Inventories | $ | $ | ||||||
NOTE 6. ASSETS HELD FOR SALE
In
December 2025, the Company reviewed its assets held for sale, to ensure they were recorded at the lower of their carrying value or fair
value less costs to sell, in accordance with ASC 360, Property, Plant and Equipment. Fair value was measured on a nonrecurring basis
in accordance with ASC 820, Fair Value Measurement, using a market approach adjusted for estimated transaction terms and disposal costs.
Significant unobservable inputs included estimated selling price ranges derived from indicative third-party discussions, discounts for
marketability, and management’s estimate of direct selling costs, resulting in a Level 3 fair value measurement within the fair
value hierarchy. As a result of this analysis, the Company recorded an impairment loss of $
Assets held for sale consist of the following:
| December 31, 2025 | June 30, 2025 | |||||||
| Construction in progress (CIP) | $ | $ | ||||||
| Assets held for sale | $ | $ | ||||||
NOTE 7. INTANGIBLE ASSETS, NET
Intangible assets, net consist of the following as of December 31, 2025:
Weighted average useful lives (years) | Remaining weighted average useful lives (years) | Acquisition cost | Effect of foreign currency | Accumulated amortization | Carrying value | |||||||||||||||||
| Technology | $ | $ | $ | $ | ||||||||||||||||||
| Customer relationships | - | |||||||||||||||||||||
| Trade names and trademarks | ||||||||||||||||||||||
| Total intangible assets | $ | $ | $ | $ | ||||||||||||||||||
Intangible assets, net consist of the following as of June 30, 2025:
Weighted average useful lives (years) | Remaining weighted average useful lives (years) | Acquisition cost | Effect of foreign currency | Accumulated amortization | Carrying value | |||||||||||||||||
| Technology | $ | $ | $ | $ | ||||||||||||||||||
| Customer relationships | ||||||||||||||||||||||
| Trade names and trademarks | ||||||||||||||||||||||
| Total intangible assets | $ | $ | $ | $ | ||||||||||||||||||
Expenses
related to the amortization of intangible assets charged to the unaudited condensed consolidated statements of operations and other
comprehensive income (loss) for the three months ended December 31, 2025 and 2024 was $
Expenses
related to the amortization of intangible assets charged to the unaudited condensed consolidated statements of operations and other
comprehensive income (loss) for the six months ended December 31, 2025 and 2024 was $
| 12 |
Amortization expense for the intangible assets is expected to be as follows over the next five years, and thereafter:
| Fiscal Year | Amount | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total | $ | |||
NOTE 8. SHAREHOLDERS’ EQUITY
Common Stock
The Company is authorized to issue shares of common stock with a par value of $ per share, of which and were outstanding as of December 31, 2025, and June 30, 2025, respectively.
Preferred Stock
The Company is authorized to issue shares of preferred stock with a par value of $ per share, of which shares have been designated Series C Convertible Preferred Stock and shares have been designated Series E Convertible Preferred Stock. There were shares of preferred stock issued or outstanding as of December 31, 2025, and June 30, 2025.
Warrants
As of December 31, 2025, there were warrants outstanding to purchase
The Company accounts for warrants in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging - Contracts on an Entity’s Own Equity, and determined that the warrants do not meet the criteria for liability treatment thereunder. Therefore, the Company’s outstanding warrants are classified as equity as of December 31, 2025 and June 30, 2025.
At-the-Market (ATM) Offering
On September 18, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”)
with Ladenburg Thalmann & Co. Inc. (“Ladenburg”). Pursuant to the terms of the ATM Agreement and under the 2024 ATM Prospectus
(as defined below), the Company was originally permitted to sell, from time to time, through Ladenburg, as sales agent or principal, shares
of the Company’s common stock with an initial aggregate sales price of up to $
During the period between September 18, 2024, through December 31, 2025, the Company raised approximately $3,624,773
(net of commissions of approximately $
| 13 |
Inducement Agreements
On July 25, 2025, the Company entered into warrant exercise inducement offer letters (each an “Inducement Agreement”)
with certain existing holders (the “Holders”) of certain outstanding Company warrants to receive new warrants (the “Series
J Warrants”) to purchase up to a number of shares of
Pursuant
to the Inducement Agreements, the Holders agreed to (i) exercise their outstanding Series G and Series H-1 Warrants at a reduced
exercise price of $
As
a result of the exercises of the Series G and Series H-1 Warrants, the Company issued an aggregate of
December 2025 Securities Purchase Agreement
On
December 31, 2025, the Company entered into a Securities Purchase Agreement with two healthcare-focused institutional investors in connection
with a private placement (the “December Private Placement”) for the sale by the Company of: (i)
Subject
to certain ownership limitations, the December 2025 Warrants are exercisable upon issuance. Each Series L Pre-Funded Warrant is exercisable
for one share of Common Stock at an exercise price of $
Gross
proceeds from the December Private Placement were approximately $
In connection with the December Private Placement, the Company entered into a Registration Rights Agreement with the investors and agreed to file by January 10, 2026, a resale registration statement (the “Resale Registration Statement”) with the SEC covering all shares of Common Stock sold to the investors and the shares of Common Stock issuable upon exercise of the December 2025 Warrants, and to use its best efforts to cause the Resale Registration Statement to be declared effective no later than February 14, 2026. The Company filed the Resale Registration Statement on January 9, 2026, which was declared effective on January 21, 2026.
The
$
Advisory Agreements
On
February 29, 2024, the Company entered into an Investor Relations and Corporate Development Advisory Agreement (the
“ClearThink Agreement”) with ClearThink Capital LLC (“ClearThink”) pursuant to which ClearThink provides
certain advisory and investor relations services to the Company. As consideration for such services, the Company agreed pay a fee
consisting of: (a) an initial grant of
restricted shares ( shares post-2025 Reverse Stock Split) of common stock (the “Initial Grant”) and (b) a
monthly fee consisting of (i) a cash fee of a $
On November 25, 2025, the Company entered into
an advisory agreement (the “MDM Agreement”) with MDM Worldwide Solutions, Inc. (“MDM”) pursuant to which MDM
provides strategic communication and business advisory services to the Company. As consideration for such services, the Company
agreed to pay (a) one-time setup fee of $
| 14 |
NOTE 9. COMMITMENTS AND CONTINGENCIES
Leases
Cambridge,
England - On August 12, 2025 the Company entered into a lease renewal agreement for a facility located in Cambridge, England, replacing
the existing lease that expired on
Sydney, Australia - On November 4, 2025 the Company
entered into a lease modification related to its facility located in Sydney, Australia, which extended the lease term 3 years from April
26, 2026 to April 26, 2029. As a result of the lease modification, the Company remeasured the operating lease liabilities and adjusted
the related right-of-use assets based on the revised lease payments and updated discount rates in effect on the modification date and
recognized a corresponding right-of-use asset of $
Agreement with CenExel HRI
On
August 1, 2024, the Company signed an agreement with CenExel HRI to perform a method comparison clinical study as part of the Company’s
FDA 510(k) clinical study plan. As a part of the agreement, the Company is committed to pay $
Legal Proceedings
From time to time, the Company may become a party to various legal proceedings arising in the ordinary course of business. Based on information currently available, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations or liquidity. However, legal matters are inherently uncertain, and the Company cannot guarantee that the outcome of any potential legal matter will be favorable to the Company.
Basic loss per common share is computed by dividing net loss allocable to common shareholders by the weighted average number of shares of common stock or common stock equivalents outstanding after adjusting for the December 2025 Reverse Stock Split. Diluted loss per common share is computed similar to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net loss attributable to Intelligent Bio Solutions Inc. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted net loss per share attributed to common shareholders | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted-average number of shares outstanding | ||||||||||||||||
As the Company has incurred net losses in all periods, certain potentially dilutive securities, including warrants to acquire common stock, have been excluded in the computation of diluted loss per share as the effects are antidilutive.
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Warrants | ||||||||
NOTE 11. SUBSEQUENT EVENTS
On January 2, 2026, in connection with the December Private Placement, the Company received $9,402,105 (net of equity costs) of cash related to subscriptions receivable from shareholders that had been recorded on the condensed consolidated balance sheet as “Subscription receivable from shareholders, net” as of December 31, 2025. See Note 8 for more information regarding the December Private Placement and the subscription receivable.
In January 2026, the Company raised approximately $
Other than the events noted above, no material subsequent events have taken place that require disclosure in these unaudited condensed consolidated financial statements noted between December 31, 2025, and the date of this report.
| 15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In addition to historical information, this discussion contains forward-looking statements based upon management’s current expectations that are subject to risks and uncertainties which may cause our actual results to differ materially from plans and results discussed herein. We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A. “Risk Factors” included in Part II of this Quarterly Report on Form 10-Q and Item 1A. “Risk Factors” included in Part I of the 2025 Form 10-K. You should read the following discussion in conjunction with our audited historical consolidated financial statements, which are included in our Annual Report on Form 10-K for fiscal 2025 and our unaudited condensed consolidated financial statements for the fiscal quarter ended December 31, 2025, included elsewhere in this Quarterly Report on Form 10-Q.
Non-GAAP Financial Measures
To supplement our unaudited condensed 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)”. We have also included reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
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. Moreover, presentation of contribution and contribution margin is provided for year-over-year comparison purposes. 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.
Forward-Looking Information
All statements other than statements of historical fact or relating to present facts or current conditions included in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and the negative of such words and other words and terms of similar meaning, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Item 1A — Risk Factors” of this Quarterly Report on Form 10-Q and in our 2025 Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
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. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, we cannot guarantee future results, levels of activity, performance, or achievements. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
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. 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 Company’s headquarters are in New York City.
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.
| 16 |
The Company’s current product portfolio includes:
Intelligent Fingerprinting Platform: The Company’s current active product is the Intelligent Fingerprinting Platform, which consists of the proprietary portable platform that analyzes fingerprint sweat using a one-time cartridge and portable handheld reader. The flagship product from this platform, which is commercially available in certain countries outside of the U.S., 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 IFP 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. Customers include safety-critical industries such as construction, transportation and logistics, mining, manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and judicial organizations.
We plan to bring the IFP System to new markets and grow within existing markets concentrating on:
● increasing market share across the United Kingdom and mainland Europe;
● expanding sales and distribution throughout Australia, New Zealand and other countries in the Asia Pacific Region (“APAC Region”), and establishing the infrastructure and satisfying the regulatory requirements needed to do so;
● continuing to work to gather additional supporting data to strengthen its new 510(k) submission to the FDA;
● initiating research aimed at broadening the capabilities of the IFP System to test for additional drugs and indications, facilitating the expansion of the platform into point-of-care medical testing;
● expanding the IFP System into new customer segments, including major sporting organizations, law enforcement, and commercial airlines; and
● developing a strategic network of distributors with established customer bases throughout the APAC Region, Europe and North America to distribute the IFP Products.
Highlights of Achievements
Major highlights and achievements for the three months ended December 31, 2025:
| ● | On December 31, the Company announced a new strategic manufacturing partnership with Syrma Johari MedTech Ltd., to support and scale the production of its Intelligent Fingerprinting Drug Screening Reader. The collaboration is expected to support long-term margin improvement and deliver significant operational and financial benefits for the Company. The Company anticipates annual production cost savings of more than 40%, translating to an expected improvement of approximately 20 percentage points in gross profit compared with its previous manufacturing arrangement. | |
| ● | On December 18, the Company announced it had entered into a non-exclusive strategic alliance and collaboration agreement with Vlepis Pty Ltd, an Australian medical and wellbeing technology company specializing in advanced sensing and wearable patch technologies, better positioning the Company to enter the consumer health monitoring market. The partnership will focus on collaboration, leveraging research and development, and expanding distribution networks to strengthen and accelerate international sales and market development. The partnership also provides INBS with the opportunity to evaluate and engage Vlepis’ proprietary enabling technologies and software designed to connect wearable devices with cloud-based platforms and mobile screening applications. | |
| ● | On October 23, the Company announced a major new contract with one of the United Kingdom’s largest industrial service providers, representing one of its most significant U.K. commercial deployments to date. |
| 17 |
Results of Operations
Comparison of the Three and Six Months Ended December 31, 2025 and 2024
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 896,774 | $ | 607,494 | $ | 2,008,571 | $ | 1,479,781 | ||||||||
| Cost of revenue (exclusive of amortization shown separately below) | (437,035 | ) | (384,381 | ) | (1,030,541 | ) | (909,867 | ) | ||||||||
| Gross profit | 459,739 | 223,113 | 978,030 | 569,914 | ||||||||||||
| Other income | ||||||||||||||||
| Government support income | 72,720 | 133,640 | 265,987 | 259,768 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | (2,337,041 | ) | (1,809,114 | ) | (4,996,865 | ) | (3,758,130 | ) | ||||||||
| Development and regulatory approval expenses | (522,113 | ) | (506,944 | ) | (1,008,282 | ) | (1,455,696 | ) | ||||||||
| Depreciation and amortization | (281,896 | ) | (305,177 | ) | (585,274 | ) | (605,599 | ) | ||||||||
| Impairment of long-lived assets | (27,147 | ) | - | (288,927 | ) | - | ||||||||||
| Total operating expenses | (3,168,197 | ) | (2,621,235 | ) | (6,879,348 | ) | (5,819,425 | ) | ||||||||
| Loss from operations | (2,635,738 | ) | (2,264,482 | ) | (5,635,331 | ) | (4,989,743 | ) | ||||||||
| Other income (expense), net | ||||||||||||||||
| Interest expense | (56,209 | ) | (13,502 | ) | (60,112 | ) | (35,829 | ) | ||||||||
| Realized foreign exchange loss | - | (750 | ) | - | (801 | ) | ||||||||||
| Interest income | 5,334 | 21,937 | 13,838 | 74,777 | ||||||||||||
| Total other income (expense), net | (50,875 | ) | 7,685 | (46,274 | ) | 38,147 | ||||||||||
| Net loss | (2,686,613 | ) | (2,256,797 | ) | (5,681,605 | ) | (4,951,596 | ) | ||||||||
| Net loss attributable to non-controlling interest | (9,023 | ) | (7,327 | ) | (21,009 | ) | (16,493 | ) | ||||||||
| Net loss attributable to Intelligent Bio Solutions Inc. | $ | (2,677,590 | ) | $ | (2,249,470 | ) | $ | (5,660,596 | ) | $ | (4,935,103 | ) | ||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation gain (loss) | 13,149 | (143,165 | ) | 61,865 | 73,190 | |||||||||||
| Total other comprehensive income (loss) | 13,149 | (143,165 | ) | 61,865 | 73,190 | |||||||||||
| Comprehensive loss | (2,673,464 | ) | (2,399,962 | ) | (5,619,740 | ) | (4,878,406 | ) | ||||||||
| Comprehensive loss attributable to non-controlling interest | (9,023 | ) | (7,327 | ) | (21,009 | ) | (16,493 | ) | ||||||||
| Comprehensive loss attributable to Intelligent Bio Solutions Inc. | $ | (2,664,441 | ) | $ | (2,392,635 | ) | $ | (5,598,731 | ) | $ | (4,861,913 | ) | ||||
Revenue
Sales of goods
Revenue from sales of goods increased by $289,280 to $896,774 for the three months ended December 31, 2025, from $607,494 for the three months ended December 31, 2024. This increase is mainly due to the addition of 17 new customers and increase in the ongoing re-order rate for the consumables. We expect this trend to continue as we expand into new markets in the future.
Revenue from sales of goods increased by $528,790 to $2,008,571 for the six months ended December 31, 2025, from $1,479,781 for the six months ended December 31, 2024. This increase is mainly due to the addition of 49 new customers. We expect this trend to continue as we expand into new markets in the future.
Cost of revenue
Cost of revenue increased by $52,654 to $437,035 for the three months ended December 31, 2025, from $384,381 for the three months ended December 31, 2024. The increase in cost of revenue is mainly due to an increase in direct labor cost due to annual salary revision for direct manufacturing labor during the fourth quarter of fiscal 2025.
Cost of revenue increased by $120,674 to $1,030,541 for the six months ended December 31, 2025, from $909,867 for the six months ended December 31, 2024. The increase in cost of revenue is mainly due to an increase in direct labor cost due to annual salary revision for direct manufacturing labor during the fourth quarter of fiscal 2025.
Gross profit
Gross profit increased by $236,626 to $459,739 for the three months ended December 31, 2025, from $223,113 for the three months ended December 31, 2024.
Gross profit increased by $408,116 to $978,030 for the six months ended December 31, 2025, compared to $569,914 for the six months ended December 31, 2024. Gross margin increased to 48.69% from 38.51% in the prior-year period.
Gross profit margin improvement during the period was driven by a combination of operational efficiencies and the capitalization of certain direct labor costs relating to software development activities. The software development activities reduced reported cost of sales and increased gross margin. Excluding the impact of this capitalization, underlying gross margin also improved due to operational efficiencies and a more favourable sales mix. Management intends to further enhance strategic sales mix and optimize operational processes to continue driving sustainable gross profit improvement. We intend to enhance our strategic sales mix and optimize operational processes, with the objective of continuing to improve gross profit.
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Contribution margin (non-GAAP)
Contribution margin, which is a non-GAAP measure of our financial performance, increased by $235,881 to $667,923 for the three months ended December 31, 2025, from $432,042 for the three months ended December 31, 2024. The contribution margin improved by approximately 3.36 percentage points due to improved production efficiency and sales mix, as the sales of high margin cartridges continue to increase as a proportion of the total revenue.
Contribution margin, which is a non-GAAP measure of our financial performance, increased by $473,016 to $1,469,657 for the six months ended December 31, 2025, from $996,641 for the six months ended December 31, 2024. The contribution margin improved by approximately 5.82 percentage points due to improved production efficiency and sales mix, as the sales of high margin cartridges continue to increase as a proportion of the total revenue.
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 896,774 | $ | 607,494 | $ | 2,008,571 | $ | 1,479,781 | ||||||||
| Direct material cost | (228,851 | ) | (175,452 | ) | (538,914 | ) | (483,140 | ) | ||||||||
| Contribution margin (non-GAAP) | $ | 667,923 | $ | 432,042 | $ | 1,469,657 | $ | 996,641 | ||||||||
| Contribution margin % (non-GAAP) | 74.48 | % | 71.12 | % | 73.17 | % | 67.35 | % | ||||||||
Reconciliation of contribution margin (non-GAAP)
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue (GAAP) | $ | 896,774 | $ | 607,494 | $ | 2,008,571 | $ | 1,479,781 | ||||||||
| Less: Cost of revenue (exclusive of amortization) (GAAP) | (437,035 | ) | (384,381 | ) | (1,030,541 | ) | (909,867 | ) | ||||||||
| Gross Profit (GAAP) | $ | 459,739 | $ | 223,113 | $ | 978,030 | $ | 569,914 | ||||||||
| Add: Direct labor cost | 203,608 | 194,462 | 472,806 | 399,396 | ||||||||||||
| Add: Direct overhead cost | 4,576 | 14,467 | 18,821 | 27,331 | ||||||||||||
| Contribution margin (non-GAAP) | $ | 667,923 | $ | 432,042 | $ | 1,469,657 | $ | 996,641 | ||||||||
| Contribution margin % (non-GAAP) | 74.48 | % | 71.12 | % | 73.17 | % | 67.35 | % | ||||||||
Government support income
Government support income decreased by $60,920 to $72,720 for the three months ended December 31, 2025, from $133,640 for the three months ended December 31, 2024. This decrease was primarily attributable to changes in U.K. R&D tax credit legislation, reducing the benefit from 14.5% to 10% of eligible R&D expenditures.
Government support income increased by $6,219 to $265,987 for the six months ended December 31, 2025, from $259,768 for the six months ended December 31, 2024. The increase was primarily driven by higher qualifying research and development expenditures eligible for reimbursement under government support programs in Australia offset by the reduction in the U.K. R&D tax credit rate from 14.5% to 10% of eligible R&D expenditures.
Operating expenses
Selling, general and administrative expenses
Selling, general and administrative expenses increased from $1,809,114 to $2,337,041 (being an increase of $527,927) for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, and from $3,758,130 to $4,996,865 (being an increase of $1,238,735) for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. This is largely driven by efforts to establish the foundations of the Company as it expands its market share and market awareness. The major components were:
Marketing: $522,325 for the 3 months ending December 31, 2025, compared to $229,485 for the same period last year and $1,132,259 for the 6 months ending December 31, 2025, compared to $391,554 for the same period last year. Marketing expenditure has increased for this period as the company moves to the next phase of strategic direction in expanding market awareness into existing and potential markets. The company believes this is achieving the objectives through increased revenue and successful capital raising
Wages and Salaries: $924,451 for the 3 months ending December 31, 2025, compared to $813,042 for the same period last year and $1,938,280 for the 6 months ending December 31, 2025, compared to $1,799,489 for the same period last year. Wages and Salaries include additional expenditure for marketing staff as part of the marketing awareness strategy, additional expenditure for finance staff to implement NetSuite, the new accounting system with the objective to remediate the internal control issues raised at “Item 4. Controls and Procedures” to bring this to a level of effectiveness as the Company expands into the future and increases in the minimum wage in the United Kingdom.
Legal Expenses: $162,019 for the 3 months ending December 31, 2025, compared to $80,171 for the same period last year and $356,288 for the 6 months ending December 31, 2025, compared to $183,761 for the same period last year. Additional legal costs were incurred as part of the activities of developing further the foundations of the Company during this reporting period including implementing the 2025 Reverse Stock Split and raising of capital.
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Development and regulatory approval expenses
Development and regulatory approval expenses increased by $15,169 to $522,113 for the three months ended December 31, 2025, from $506,944 for the three months ended December 31, 2024. This increase is primarily attributable to the amounts spent on in-house R&D staff and timing of R&D work performed by the research partners.
Development and regulatory approval expenses decreased by $447,414 to $1,008,282 for the six months ended December 31, 2025, from $1,455,696 for the six months ended December 31, 2024. This decrease is primarily attributable to the timing of engagement of the research partner for R&D. During the six months ended December 31, 2024, the Company had partnered with CenExel to perform a method comparison clinical study as part of the Company’s FDA 510(k) clinical study plan which contributed to the additional costs during the period
We expect development and regulatory expenses to increase in future periods as the Company continues to work to gather additional supporting data to strengthen its new 510(k) submission to the FDA.
Depreciation and amortization
Depreciation and amortization decreased by $23,281 to $281,896 for the three months ended December 31, 2025 from $305,177 for the three months ended December 31, 2024. This decrease is primarily due to the completion of scheduled amortization of customer relationship (intangible assets) during the prior quarter, resulting in no remaining carrying value for amortization during the three months ended December 31, 2025, partially offset by an amortization of software costs.
Depreciation and amortization decreased by $20,325 to $585,274 for the six months ended December 31, 2025 from $605,599 for the six months ended December 31, 2024. This decrease is primarily due to the completion of scheduled amortization of customer relationship (intangible assets) during the prior quarter, resulting in no remaining carrying value for amortization during the three months ended December 31, 2025, partially offset by an amortization of software costs.
Impairment of long-lived assets
The impairment of long-lived assets increased by $27,147 to $27,147 for the three months ended December 31, 2025, from $0 for the three months ended December 31, 2024. The increase is mainly due to the impairment of construction in progress assets held for sale.
The impairment of long-lived assets increased by $288,927 to $288,927 for the six months ended December 31, 2025, from $0 for the six months ended December 31, 2024. The increase is mainly due to the impairment of construction in progress assets held for sale.
Other income and expenses
Interest expense
Interest expense increased by $42,707 to $56,209 for the three months ended December 31, 2025 from $13,502 for the three months ended December 31, 2024. The increase was primarily attributable to higher interest expense recognized on lease liabilities related to new lease agreements for the Company’s U.K. and Australian offices, as well as interest on notes payable.
Interest expense increased by $24,283 to $60,112 for the six months ended December 31, 2025 from $35,829 for the six months ended December 31, 2024. The increase was primarily attributable to higher interest expense recognized on lease liabilities related to new lease agreements for the Company’s U.K. and Australian offices, as well as interest on notes payable.
Interest income
Interest income decreased by $16,603 to $5,334 for the three months ended December 31, 2025, from $21,937 for the three months ended December 31, 2024. This decrease was due to the spending of funds received from capital raising activities, which decreases the balance on which interest was earned.
Interest income decreased by $60,939 to $13,838 for the six months ended December 31, 2025, from $74,777 for the six months ended December 31, 2024. This decrease was due to the spending of funds received from capital raising activities, which decreases the balance on which interest was earned.
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. This information is intended to provide investors with information about our liquidity. Other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.
Since our inception, we have financed our operations primarily though proceeds from public offerings and private placements of equity securities, warrant inducement transactions, existing trade and shareholder financing arrangements, and the incurrence of debt. As of December 31, 2025, we had $740,371 in cash and cash equivalents and working capital of $7,047,443.
Shelf Registration Statement - On April 11, 2025, the Company filed a shelf registration statement on Form S-3 (File No. 333-286489), which became effective on September 10, 2025 (“2025 Shelf”), under which we can sell and issue up to an aggregate of $100 million in any combination of common stock, preferred stock, debt securities, warrants, purchase contracts and units. No securities may be sold under the 2025 Shelf until a prospectus supplement describing the method and terms of any future offering is delivered. The 2025 Shelf replaced the 2022 Shelf (defined below), which expired in 2025.
At-the-Market (ATM) Offering - On September 18, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”). Pursuant to the terms of the ATM Agreement and under the 2024 ATM Prospectus (as defined below), the Company was originally permitted to sell, from time to time, through Ladenburg, as sales agent or principal, shares of the Company’s common stock with an initial aggregate sales price of up to $3.0 million. On March 11, 2025, the Company filed a prospectus supplement (the “2025 March ATM Supplement”) to the 2024 ATM Prospectus in connection with the offer, sale, and issuance of up to $1,376,530 of shares of Common Stock. Prior to the expiration of our “shelf” registration statement on Form S-3 (File No. 333-264218), which became effective on April 20, 2022 (“2022 Shelf”), any sale of shares pursuant to the ATM Agreement were made under 2022 Shelf and included base prospectus, and under the related prospectus supplement filed with the SEC, dated September 18, 2024 (the “2024 ATM Prospectus”), as supplemented by the 2025 March ATM Supplement. On September 18, 2025, the Company filed prospectus supplement to the 2025 Shelf (the “2025 September ATM Supplement”) in connection with the offer, sale, and issuance of up to $1,211,174 of shares of Company common stock under the ATM Agreement. Since the expiration of the 2022 Shelf, all sales of shares under the ATM Agreement have been made pursuant to the Company’s 2025 Shelf, including the related base prospectus, and the 2025 September ATM Supplement.
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During the period between September 18, 2024, through December 31, 2025, the Company raised approximately $3,624,773 (net of commissions of approximately $112,169 paid to Ladenburg) through the sale and issuance of 347,863 shares (after adjustment for the 2025 Reverse Stock Split) of Company common stock pursuant to the ATM Agreement. During the three months ended December 31, 2025, the Company raised approximately $1,159,483 (net of commissions of approximately $35,872 paid to Ladenburg) through the sale and issuance of 192,071 shares (after adjustment for the 2025 Reverse Stock Split) of Company common stock pursuant to the ATM Agreement.
Inducement Agreements - On July 25, 2025, the Company entered into warrant exercise inducement offer letters (each an “Inducement Agreement”) with certain existing holders (the “Holders”) of certain outstanding Company warrants to receive new warrants (the “Series J Warrants”) to purchase up to a number of shares of the Company’s common stock equal to 200% of the number of warrant shares issued pursuant to the exercise (or prepayment) of outstanding Series G Warrants and outstanding Series H-1 Warrants (the “2025 Warrant Inducement Transaction”).
Pursuant to the Inducement Agreements, the Holders agreed to (i) exercise their outstanding Series G and Series H-1 Warrants at a reduced exercise price of $19.00 per share ($1.90 per share pre-2025 Reverse Stock Split) (the “Reduced Exercise Price”) to purchase an aggregate 154,549 shares (1,545,494 shares pre-2025 Reverse Stock Split) of the Company’s common stock and (ii) prepay $18.90 per share ($1.89 per share pre-2025 Reverse Stock Split) toward the Reduced Exercise Price for the exercise of Series H-1 Warrants to purchase an additional 47,773 shares (477,734 shares pre-2025 Reverse Stock Split), in exchange for the Company’s agreement to further reduce the exercise price of the prepaid Series H-1 Warrants to $0.10 per share ($0.01 per share pre-2025 Reverse Stock Split), issue Series J Warrants to purchase up to 404,646 shares (4,046,456 shares pre-2025 Reverse Stock Split) of common stock, and reduce the exercise price of the Series H-2 Warrants to the Reduced Exercise Price for up to 156,868 shares (1,568,680 shares pre-2025 Reverse Stock Split). The 2025 Warrant Inducement Transaction closed on July 28, 2025.
As a result of the exercises of the Series G and Series H-1 Warrants, the Company issued an aggregate of 154,549 shares (1,545,494 shares pre–2025 Reverse Stock Split) of common stock. In addition, as a result of the prepayment of the remaining Series H-1 Warrants, the Company amended such warrants to permit the purchase of 47,773 shares (477,734 shares pre-2025 Reverse Stock Split) of common stock at an exercise price of $0.10 per share ($0.01 per share pre-2025 Reverse Stock Split). The Company received aggregate gross proceeds of approximately $3,839,356 and raised approximately $3,332,646, net of underwriting discounts and commissions of approximately $410,542 and legal and compliance costs of $96,168.
December 2025 Purchase Agreement - On December 31, 2025, the Company entered into a Securities Purchase Agreement with two healthcare-focused institutional investors in connection with a private placement (the “December Private Placement”) for the sale by the Company of: (i) 2,298,850 shares of Common Stock or, in lieu thereof, Series L Pre-Funded Warrants (the “Series L Pre-Funded Warrants”), (ii) Series K-1 warrants to purchase up to 2,298,850 shares of Common Stock (the “Series K-1 Warrants”), and (iii) Series K-2 warrants to purchase up to 2,298,850 shares of Common Stock (the “Series K-2 Warrants” and, collectively with the Series K-1 Warrants and Series L Pre-Funded Warrants, the “December 2025 Warrants”). The combined purchase price for one share of Common Stock (or one Series L Pre-Funded Warrant) and accompanying Series K-1 and Series K-2 Warrants was $4.35. The December Private Placement closed on January 2, 2026, at which time the Company issued an aggregate of 105,000 shares of Common Stock, 2,193,850 Series L Pre-Funded Warrants, 2,298,850 Series K-1 Warrants, and 2,298,850 Series K-2 Warrants.
Subject to certain ownership limitations, the December 2025 Warrants are exercisable upon issuance. Each Series L Pre-Funded Warrant is exercisable for one share of Common Stock at an exercise price of $0.01 per share, subject to adjustment, and remains exercisable until exercised in full. Each Series K-1 Warrant and Series K-2 Warrant is exercisable for one share of Common Stock at an exercise price of $4.10 per share, subject to adjustment, and has a term of five years commencing on the date a registration statement registering the resale of the shares underlying Series K-1 Warrant and Series K-2 Warrant, as applicable, is declared effective by the U.S. Securities and Exchange Commission (the “SEC”).
Gross proceeds from the December Private Placement were approximately $10.0 million, before deducting placement agent fees and other offering expenses, and excluding any proceeds from the exercise of the December 2025 Warrants. The Company intends to use the net proceeds for working capital and general corporate purposes.
In connection with the December Private Placement, the Company entered into a Registration Rights Agreement with the investors and agreed to file by January 10, 2026, a resale registration statement (the “Resale Registration Statement”) with the SEC covering all shares of Common Stock sold to the investors and the shares of Common Stock issuable upon exercise of the December 2025 Warrants, and to use its best efforts to cause the Resale Registration Statement to be declared effective no later than February 14, 2026. The Company filed the Resale Registration Statement on January 9, 2026, which was declared effective on January 21, 2026.
Australian Government Grant - In the fourth fiscal quarter ended June 30, 2025, upon the end of the project deadline for the construction of a manufacturing facility in Australia, a grant acquittal audit was completed by an independent auditor in relation to the grant received from the Australian Government (the “Australian Government Grant”). Following the grant acquittal audit, an amount of $2,096,222 remains payable to the Australian Government, which is disclosed under liabilities in the balance sheet as of December 31, 2025, as “Accounts payable and accrued expenses”. The Company has finalized the terms of repayments as of September 30, 2025. For more information regarding the repayment of the Australian Government Grant, see “Item 1A. Risk Factors - The Company may not be able to repay the grant it received from the Australian Government when due.”
The Company expects that its cash and cash equivalents and subscription receivable from the investors in the December Private Placement as of December 31, 2025, will be insufficient to fund its current operating plan for at least 12 months from the issuance date of these unaudited condensed consolidated financial statements. In addition, the Company has a significant repayment obligation related to the Australian Government Grant, which further increases its near-term liquidity requirements. 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 issuance date of these unaudited condensed consolidated financial statements. As a result, the Company will be required to raise additional funds during the next 12 months.
While the Company intends to raise additional capital through equity or debt financings, strategic collaborations, or other arrangements, there can be no assurance that such funding will be available on acceptable terms, or at all. Failure to obtain additional funding when needed could adversely affect the Company’s ability to execute its operating plan and meet its long-term liquidity requirements.
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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. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. Because our financial statements may not be comparable to companies that comply with public company effective dates, investors may have difficulty evaluating or comparing our business, performance or prospects in comparison to other public companies, which may have a negative impact on the value and liquidity of our common stock.
Off-Balance Sheet Arrangements
As of December 31, 2025 we did not have any off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions. Predicting future events is inherently an imprecise activity and, as such, requires the use of significant judgment. Actual results may differ from our estimates in amounts that may be material to the financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our unaudited condensed consolidated financial statements.
Our critical accounting policies, estimates, and judgments are included in Note 3. Summary of Significant Accounting Policies included in Item 8 of Part II of our 2025 Form 10-K for additional information.
Recently issued Accounting Pronouncements
For the impact of recently issued accounting pronouncements on the Company’s unaudited condensed consolidated financial statements, see Note 3 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and incorporated herein by reference.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial and Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were ineffective due to the material weakness in internal control over financial reporting discussed below.
Notwithstanding this conclusion, we believe that our consolidated financial statements and other information contained in this quarterly report on Form 10-Q present fairly, in all material respects, our business, the financial condition and results of operations for the periods presented.
Material Weakness
In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2025, management identified material weaknesses in control environment, risk assessment, control activities, information and communication and monitoring. Specifically, the material weaknesses identified relate to the fact that the Company has not yet designed and maintained an effective control environment commensurate with its financial reporting requirements, including (a) has not yet completed formally documenting policies and procedures with respect to review, supervision and monitoring of the Company’s accounting and reporting functions, (b) lack of evidence to support the performance of controls and the adequacy of review procedures, including the completeness and accuracy of information used in the performance of controls and (c) we have limited accounting personnel and other supervisory resources necessary to adequately execute the Company’s accounting processes and address its internal controls over financial reporting.
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Ongoing Remediation Plan
Management is committed to continuing the steps necessary to remediate the control deficiencies that constituted the above material weaknesses. We made the following enhancements and continue to make progress to enhance our control environment:
● We completed the implementation of new accounting system for Intelligent Bio Solutions Inc. and Intelligent Bio Solutions (APAC) Pty Ltd that will enhance our internal controls by improving efficiency, accuracy, and reliability in financial reporting and data management. Additionally, we have also commenced implementing new accounting system for our subsidiary Intelligent Fingerprinting Limited and have planned to complete it by the third quarter of fiscal 2026;
● We added accounting and finance personnel to provide additional individuals to allow for segregation of duties in the preparation and review of schedules, calculations and journal entries that support financial reporting, to provide oversight, structure and reporting lines to provide additional review over our disclosures. We have also commenced the implementation of the new accounting system which aids in reducing these control deficiencies;
● We enhanced our controls to improve the preparation and review of complex accounting measurements, the application of US GAAP to significant accounts and transactions and our financial statement disclosures;
● We engage independent experts when complex transactions are entered into;
● We have recruited and plan to recruit additional financial reporting and accounting personnel with adequate knowledge of US GAAP and SEC rules;
● We are in the process of engaging outside consultants to assist us in our evaluation of the design, implementation and documentation of internal controls that address the relevant risks, to provide appropriate evidence of performance of our internal controls (including completeness and accuracy procedures); and
Under the direction of the Audit Committee of our board of directors, management will continue to take measures to remediate the material weaknesses. As such, we will continue to enhance corporate oversight over process-level controls and structures to ensure that there is an appropriate assignment of authority, responsibility and accountability to enable remediation of our material weakness.
As we continue to evaluate, and work to improve, our internal control over financial reporting, management may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary.
Changes in Internal Control Over Financial Reporting
Other than the ongoing remediation efforts described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitation on the Effectiveness of Internal Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.
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PART II. OTHER INFORMATION
ITEM 1. 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 1A. RISK FACTORS
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on August 15, 2025, except for the risks described below. Any of those risk factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
We may not be able to satisfy the continued listing requirements of the Nasdaq Capital Market in order to maintain the listing of our common stock.
On December 15, 2025, we received a notice letter (the “Bid Price Notice”) from the Listing Qualifications Department of Nasdaq notifying us that because the closing bid price per share for Company common stock was below $1.00 for 30 consecutive business days preceding the date of the Bid Price Notice, we did not meet the $1.00 per share minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the Bid Price Rule).
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided with an initial period of 180 calendar days, or until June 15, 2026, to regain compliance with the Bid Price Rule. We effected the 2025 Reverse Stock Split in order to regain compliance with the Bid Price Rule. The 2025 Reverse Stock Split became effective at 11:59 p.m. Eastern Time on December 15, 2025, and the Company’s common stock began trading on a reverse stock split-adjusted basis on the Nasdaq Capital Market at the open of trading on December 16, 2025.
On January 7, 2026, we received written notification from Nasdaq notifying us that the Company had regained compliance with the Bid Price Rule as a result of the closing bid price of Company common stock being at $1.00 per share or greater for the prior 14 consecutive business days (from December 16, 2025, to January 6, 2026). Accordingly, the Company is now in compliance with the Bid Price Rule and Nasdaq considers the matter closed.
Although the 2025 Reverse Stock Split brought the price of our common stock back above $1.00 per share in order to meet the requirements for the continued listing of our common stock on the Nasdaq Capital Market, there can be no assurance that the closing bid price of our common stock will remain at or above $1.00 following the 2025 Reverse Stock Split. If we fail to satisfy any of Nasdaq’s continued listing requirements, Nasdaq may take steps to delist our common stock, which could have a materially adverse effect on our ability to raise additional funds as well as the price and liquidity of our common stock.
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Changes in government funding levels, staffing resources, or policy priorities at the FDA, the SEC, and other government agencies could adversely affect their ability to perform their regulatory and oversight functions. Reductions in funding, hiring constraints, workforce attrition, or shifts in legislative or administrative priorities may hinder these agencies’ ability to hire and retain key personnel, administer regulatory programs, or review submissions in a timely manner.
The FDA’s ability to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors, and otherwise process regulatory submissions can be affected by a variety of factors, including government budget and funding levels, workforce availability, ability to hire and retain qualified personnel, and statutory, regulatory, or policy changes. Limitations on agency resources, including furloughs or staffing reductions, whether temporary or prolonged, may result in delays in regulatory interactions, reviews, and approvals, which could delay the development or commercialization of our product candidates and adversely affect our business, financial condition, and results of operations.
Government funding for agencies that support research and development activities is subject to the political process and may fluctuate over time. While legislation such as the 21st Century Cures Act was intended to support medical innovation and enhance the FDA’s hiring authority, future budgetary pressures or policy changes could reduce funding allocations to the FDA and other government agencies. Such funding constraints could impair their ability to fulfil their mandates and could also adversely affect academic institutions and research organizations that rely on government funding, potentially impacting our development activities.
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. 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.
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 System), we have relied primarily on equity and some debt financing and government support income. The Company believes there is material risk that its cash and cash equivalents and subscription receivable from shareholders as of December 31, 2025, of $740,371 and $9,402,105, respectively may be insufficient to allow the Company to fund its current operating plan through at least the next twelve months from the issuance of its unaudited condensed consolidated financial statements for the fiscal quarter ended December 31, 2025. 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 unaudited condensed consolidated financial statements were issued. Accordingly, the Company will be required to raise additional funds during the next 12 months. However, there can be no assurance that when the Company requires additional financing, such financing will be available on terms which are favorable to the Company, or if at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay or reduce the scope of its research programs and/or limit or cease its operations. In addition, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.
To obtain the additional capital necessary to fund our operations, we expect to finance our cash needs through public or private equity offerings, debt financing and/or other capital sources. Even if capital is available, it might be available only on unfavorable terms. Any additional equity or convertible debt financing into which we enter could be dilutive to our existing stockholders. Any future debt financing into which we enter may impose covenants upon us that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, we may need to relinquish rights to our technologies or our products or grant licenses on terms that are not favorable to us. If access to sufficient capital is not available as and when needed, our business will be materially impaired and we may be required to cease operations, curtail one or more product development or commercialization programs, scale back or eliminate the development of business opportunities, or significantly reduce expenses, sell assets, seek a merger or joint venture partner, file for protection from creditors or liquidate all of our assets. Any of these factors could harm our operating results.
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As a result of the liquidation of Life Science Biosensor Diagnostics Pty Ltd (LSBD) and the intellectual property rights licensed by the Company from LSBD (the Biosensor IP and intellectual property related to SARS-CoV-2 testing) reverting back to the University of Newcastle, there is a risk of extended delays in negotiating the terms of licensing the intellectual property with the University, or that such negotiations may result in less favorable licensing terms for the Company, or that such negotiations may not be successful, which, in any event, would negatively impact the Company’s ability to develop and commercialize the BPT, the Licensed Products or the COV2 Products
We are party to the BPT License Agreement with LSBD, pursuant to which, among other things, the Company licenses from LSBD certain products and intellectual property related to the biosensor technology used in the Biosensor Platform, which we refer to as the Biosensor IP. The Company also holds a 50% interest in BiosensX (North America) Inc., which has exclusive license to use, make, sell and offer to sell products under the intellectual property rights in connection with the biosensor technology and the glucose/diabetes management field in the U.S., Mexico and Canada.
We understand that following the commencement of the liquidation of LSBD on July 21, 2023, the LSBD IP we licensed from LSBD, which includes the Biosensor IP, has reverted back to the University of Newcastle. Following our discussions with the University of Newcastle, it is our understanding that the University of Newcastle cannot finalize licensing of the Biosensor IP until the liquidation, by virtue of the status of LSBD being under external administration, is completed. As of the date of this Quarterly Report on Form 10-Q the ASIC database maintained by the Australian Securities and Investments Commission (ASIC) indicates that LSBD (Australian Company Number 613 279 771) is under the status of a company being under external administration. We do not know the timeline for when LSBD’s liquidation will be complete or when LSBD’s status will change, and accordingly, we do not expect any updates or finalization of any license terms until this occurs. As a result, further development of the BPT has been postponed until we are able to finalize appropriate licensing arrangements related to the BPT.
Accordingly, there is an inherent risk of extended delays in negotiating the terms of licensing the Biosensor IP with the University, or that such negotiations may result in less favorable licensing terms for the Company, or that such negotiations may not be successful, which, in any event, would negatively impact the Company’s ability to develop and commercialize the BPT or Licensed Products.
These same risks apply to the Company’s licensing of intellectual property from LSBD related to the COV2 Products described in this prospectus, which includes a biosensor strip for antibodies against SARS-CoV-2.
The Company may not be able to repay the grant it received from the Australian Government when due.
In the fourth fiscal quarter ended June 30, 2025, upon the end of the project deadline for the construction of a manufacturing facility in Australia, a grant acquittal audit was completed by an independent auditor in relation to the grant received from the Australian Government. Following the grant acquittal audit, an amount of $2,096,222 remains payable to the Australian Government, which is disclosed under liabilities in the balance sheet as of December 31, 2025, as “Accounts payable and accrued expenses”. The Company has finalized the terms of repayments as of September 30, 2025. If the Company is unable to obtain sufficient financing or otherwise raise adequate funds, it may be unable to make required payments when due. Any failure to timely repay such obligations could result in defaults, the acceleration of amounts owed, the imposition of penalties, the initiation of enforcement actions by creditors, and other adverse consequences, any of which could materially and adversely affect the Company’s business, financial condition, and results of operations.
The loss of our “emerging growth company” status will increase certain reporting and compliance obligations and any failure to meet these expanded requirements could expose us to regulatory scrutiny or sanctions and could harm our reputation and adversely affect our stock price.
We will cease to qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), at the end of this fiscal year. As a result, beginning with our Annual Report on Form 10-K for the fiscal year ending June 30, 2026, we will no longer be able to use the extended transition period for complying with new or revised accounting standards, will become subject to the same disclosure and attestation requirements as other public companies that are not emerging growth companies. We cannot predict whether investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and the trading price of our common stock may be more volatile.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Other than any sales previously reported in the Company’s Current Reports on Form 8-K, the Company did not sell any unregistered securities during the period covered by this report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During
the period covered by this Quarterly Report on Form 10-Q, none of the Company’s directors or executive officers has
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ITEM 6. EXHIBITS
# Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Intelligent Bio Solutions Inc. | |||
| Date: | February 12, 2026 | By: | /s/ Harry Simeonidis |
| HARRY SIMEONIDIS | |||
| CHIEF EXECUTIVE OFFICER AND PRESIDENT | |||
| (Principal Executive Officer) | |||
| Date: | February 12, 2026 | By: | /s/ Spiro Sakiris |
| SPIRO SAKIRIS | |||
| CHIEF FINANCIAL OFFICER | |||
| (Principal Financial Officer) | |||
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