false --06-30 Q3 0001725430 Yes Yes http://fasb.org/us-gaap/2024#UsefulLifeTermOfLeaseMember P5Y6M P5Y6M 0001725430 2023-07-01 2024-03-31 0001725430 2024-05-06 0001725430 2024-03-31 0001725430 2023-06-30 0001725430 2024-01-26 2024-01-26 0001725430 2023-02-09 2023-02-09 0001725430 2024-01-01 2024-03-31 0001725430 2023-01-01 2023-03-31 0001725430 2022-07-01 2023-03-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2023-06-30 0001725430 us-gaap:CommonStockMember 2023-06-30 0001725430 us-gaap:TreasuryStockCommonMember 2023-06-30 0001725430 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001725430 us-gaap:RetainedEarningsMember 2023-06-30 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0001725430 us-gaap:NoncontrollingInterestMember 2023-06-30 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2023-09-30 0001725430 us-gaap:CommonStockMember 2023-09-30 0001725430 us-gaap:TreasuryStockCommonMember 2023-09-30 0001725430 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0001725430 us-gaap:RetainedEarningsMember 2023-09-30 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-09-30 0001725430 us-gaap:NoncontrollingInterestMember 2023-09-30 0001725430 2023-09-30 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2023-12-31 0001725430 us-gaap:CommonStockMember 2023-12-31 0001725430 us-gaap:TreasuryStockCommonMember 2023-12-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001725430 us-gaap:RetainedEarningsMember 2023-12-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-12-31 0001725430 us-gaap:NoncontrollingInterestMember 2023-12-31 0001725430 2023-12-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2022-06-30 0001725430 us-gaap:CommonStockMember 2022-06-30 0001725430 us-gaap:TreasuryStockCommonMember 2022-06-30 0001725430 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001725430 us-gaap:RetainedEarningsMember 2022-06-30 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0001725430 us-gaap:NoncontrollingInterestMember 2022-06-30 0001725430 2022-06-30 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2022-09-30 0001725430 us-gaap:CommonStockMember 2022-09-30 0001725430 us-gaap:TreasuryStockCommonMember 2022-09-30 0001725430 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001725430 us-gaap:RetainedEarningsMember 2022-09-30 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0001725430 us-gaap:NoncontrollingInterestMember 2022-09-30 0001725430 2022-09-30 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2022-12-31 0001725430 us-gaap:CommonStockMember 2022-12-31 0001725430 us-gaap:TreasuryStockCommonMember 2022-12-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001725430 us-gaap:RetainedEarningsMember 2022-12-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001725430 us-gaap:NoncontrollingInterestMember 2022-12-31 0001725430 2022-12-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2023-07-01 2023-09-30 0001725430 us-gaap:CommonStockMember 2023-07-01 2023-09-30 0001725430 us-gaap:TreasuryStockCommonMember 2023-07-01 2023-09-30 0001725430 us-gaap:AdditionalPaidInCapitalMember 2023-07-01 2023-09-30 0001725430 us-gaap:RetainedEarningsMember 2023-07-01 2023-09-30 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-07-01 2023-09-30 0001725430 us-gaap:NoncontrollingInterestMember 2023-07-01 2023-09-30 0001725430 2023-07-01 2023-09-30 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2023-10-01 2023-12-31 0001725430 us-gaap:CommonStockMember 2023-10-01 2023-12-31 0001725430 us-gaap:TreasuryStockCommonMember 2023-10-01 2023-12-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2023-10-01 2023-12-31 0001725430 us-gaap:RetainedEarningsMember 2023-10-01 2023-12-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-10-01 2023-12-31 0001725430 us-gaap:NoncontrollingInterestMember 2023-10-01 2023-12-31 0001725430 2023-10-01 2023-12-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2024-01-01 2024-03-31 0001725430 us-gaap:CommonStockMember 2024-01-01 2024-03-31 0001725430 us-gaap:TreasuryStockCommonMember 2024-01-01 2024-03-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-03-31 0001725430 us-gaap:RetainedEarningsMember 2024-01-01 2024-03-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-01-01 2024-03-31 0001725430 us-gaap:NoncontrollingInterestMember 2024-01-01 2024-03-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2022-07-01 2022-09-30 0001725430 us-gaap:CommonStockMember 2022-07-01 2022-09-30 0001725430 us-gaap:TreasuryStockCommonMember 2022-07-01 2022-09-30 0001725430 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0001725430 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0001725430 us-gaap:NoncontrollingInterestMember 2022-07-01 2022-09-30 0001725430 2022-07-01 2022-09-30 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2022-10-01 2022-12-31 0001725430 us-gaap:CommonStockMember 2022-10-01 2022-12-31 0001725430 us-gaap:TreasuryStockCommonMember 2022-10-01 2022-12-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2022-10-01 2022-12-31 0001725430 us-gaap:RetainedEarningsMember 2022-10-01 2022-12-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-10-01 2022-12-31 0001725430 us-gaap:NoncontrollingInterestMember 2022-10-01 2022-12-31 0001725430 2022-10-01 2022-12-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2023-01-01 2023-03-31 0001725430 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001725430 us-gaap:TreasuryStockCommonMember 2023-01-01 2023-03-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001725430 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-03-31 0001725430 us-gaap:NoncontrollingInterestMember 2023-01-01 2023-03-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2024-03-31 0001725430 us-gaap:CommonStockMember 2024-03-31 0001725430 us-gaap:TreasuryStockCommonMember 2024-03-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2024-03-31 0001725430 us-gaap:RetainedEarningsMember 2024-03-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-03-31 0001725430 us-gaap:NoncontrollingInterestMember 2024-03-31 0001725430 us-gaap:PreferredStockMember us-gaap:ConvertiblePreferredStockMember 2023-03-31 0001725430 us-gaap:CommonStockMember 2023-03-31 0001725430 us-gaap:TreasuryStockCommonMember 2023-03-31 0001725430 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001725430 us-gaap:RetainedEarningsMember 2023-03-31 0001725430 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0001725430 us-gaap:NoncontrollingInterestMember 2023-03-31 0001725430 2023-03-31 0001725430 INBS:FebruaryTwoThousandTwentyThreeReverseStockSplitMember 2023-02-09 2023-02-09 0001725430 2023-10-04 2023-10-04 0001725430 2024-02-07 2024-02-07 0001725430 2024-03-12 2024-03-12 0001725430 INBS:SalesOfGoodsCartidgesMember 2024-01-01 2024-03-31 0001725430 INBS:SalesOfGoodsCartidgesMember 2023-01-01 2023-03-31 0001725430 INBS:SalesOfGoodsCartidgesMember 2023-07-01 2024-03-31 0001725430 INBS:SalesOfGoodsCartidgesMember 2022-07-01 2023-03-31 0001725430 INBS:SalesOfGoodsReadersMember 2024-01-01 2024-03-31 0001725430 INBS:SalesOfGoodsReadersMember 2023-01-01 2023-03-31 0001725430 INBS:SalesOfGoodsReadersMember 2023-07-01 2024-03-31 0001725430 INBS:SalesOfGoodsReadersMember 2022-07-01 2023-03-31 0001725430 INBS:OtherSalesMember 2024-01-01 2024-03-31 0001725430 INBS:OtherSalesMember 2023-01-01 2023-03-31 0001725430 INBS:OtherSalesMember 2023-07-01 2024-03-31 0001725430 INBS:OtherSalesMember 2022-07-01 2023-03-31 0001725430 2021-06-30 0001725430 us-gaap:SubsequentEventMember 2024-04-16 0001725430 INBS:GrantIncomeMember 2024-01-01 2024-03-31 0001725430 INBS:GrantIncomeMember 2023-07-01 2024-03-31 0001725430 INBS:GrantIncomeMember 2023-01-01 2023-03-31 0001725430 INBS:GrantIncomeMember 2022-07-01 2023-03-31 0001725430 INBS:OtherEquipmentMember 2024-03-31 0001725430 INBS:ProductionEquipmentMember srt:MinimumMember 2024-03-31 0001725430 INBS:ProductionEquipmentMember srt:MaximumMember 2024-03-31 0001725430 us-gaap:LeaseholdImprovementsMember 2024-03-31 0001725430 2022-07-01 2023-06-30 0001725430 INBS:IntelligentFingerprintingProductsMember country:GB 2024-01-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:GB 2024-01-01 2024-03-31 0001725430 country:GB 2024-01-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:AU 2024-01-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:AU 2024-01-01 2024-03-31 0001725430 country:AU 2024-01-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember INBS:OtherCountryMember 2024-01-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember INBS:OtherCountryMember 2024-01-01 2024-03-31 0001725430 INBS:OtherCountryMember 2024-01-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember 2024-01-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember 2024-01-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:GB 2023-01-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:GB 2023-01-01 2023-03-31 0001725430 country:GB 2023-01-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:AU 2023-01-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:AU 2023-01-01 2023-03-31 0001725430 country:AU 2023-01-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember INBS:OtherCountryMember 2023-01-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember INBS:OtherCountryMember 2023-01-01 2023-03-31 0001725430 INBS:OtherCountryMember 2023-01-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember 2023-01-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember 2023-01-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:GB 2023-07-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:GB 2023-07-01 2024-03-31 0001725430 country:GB 2023-07-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:AU 2023-07-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:AU 2023-07-01 2024-03-31 0001725430 country:AU 2023-07-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember INBS:OtherCountryMember 2023-07-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember INBS:OtherCountryMember 2023-07-01 2024-03-31 0001725430 INBS:OtherCountryMember 2023-07-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember 2023-07-01 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember 2023-07-01 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:GB 2022-07-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:GB 2022-07-01 2023-03-31 0001725430 country:GB 2022-07-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:AU 2022-07-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:AU 2022-07-01 2023-03-31 0001725430 country:AU 2022-07-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember INBS:OtherCountryMember 2022-07-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember INBS:OtherCountryMember 2022-07-01 2023-03-31 0001725430 INBS:OtherCountryMember 2022-07-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember 2022-07-01 2023-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember 2022-07-01 2023-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:GB 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:GB 2024-03-31 0001725430 country:GB 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:AU 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:AU 2024-03-31 0001725430 country:AU 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember 2024-03-31 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember 2024-03-31 0001725430 INBS:IntelligentFingerprintingProductsMember country:GB 2023-06-30 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:GB 2023-06-30 0001725430 country:GB 2023-06-30 0001725430 INBS:IntelligentFingerprintingProductsMember country:AU 2023-06-30 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember country:AU 2023-06-30 0001725430 country:AU 2023-06-30 0001725430 INBS:IntelligentFingerprintingProductsMember 2023-06-30 0001725430 INBS:SalivaGlucoseBiosensorPlatformMember 2023-06-30 0001725430 INBS:IntelligentFingerprintingLimitedMember 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:CommonStockMember INBS:FebruaryTwoThousandTwentyThreeReverseStockSplitMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember INBS:SeriesCConvertiblePreferredStockMember 2022-10-04 2022-10-04 0001725430 INBS:ShareExchangeAgreementMember INBS:SeriesCConvertiblePreferredStockMember 2022-10-04 0001725430 us-gaap:SeriesCPreferredStockMember 2022-10-04 0001725430 INBS:HoldBackSeriesCPreferredStockMember INBS:ShareExchangeAgreementMember 2022-10-04 2022-10-04 0001725430 us-gaap:SeriesCPreferredStockMember INBS:IFPLendersMember INBS:ShareExchangeAgreementMember 2022-10-04 2022-10-04 0001725430 us-gaap:SeriesCPreferredStockMember INBS:ShareExchangeAgreementMember 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember 2022-06-16 0001725430 INBS:IntelligentFingerprintingLimitedMember INBS:VariousLoanAgreementMember 2022-10-04 0001725430 us-gaap:SeriesCPreferredStockMember 2023-02-09 0001725430 us-gaap:SeriesCPreferredStockMember INBS:IntelligentFingerprintingLimitedMember 2022-10-04 2022-10-04 0001725430 us-gaap:SeriesCPreferredStockMember 2023-05-10 0001725430 us-gaap:SeriesCPreferredStockMember INBS:LenderPreferredSharesMember 2023-05-10 0001725430 us-gaap:SeriesCPreferredStockMember INBS:ClosingHoldbackSharesMember 2023-05-10 0001725430 us-gaap:CommonStockMember 2023-05-10 2023-05-10 0001725430 us-gaap:SeriesCPreferredStockMember INBS:ClosingHoldbackSharesMember 2023-05-08 0001725430 us-gaap:SeriesCPreferredStockMember INBS:ClosingHoldbackSharesMember 2023-05-08 2023-05-08 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:TechnologyBasedIntangibleAssetsMember 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:TechnologyBasedIntangibleAssetsMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:CustomerRelationshipsMember 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:CustomerRelationshipsMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:TrademarksAndTradeNamesMember 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:CommonStockMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember INBS:SeriesCPreferredStockBaseMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember INBS:SeriesCPreferredStockHoldbackMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember us-gaap:CommonStockMember 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember INBS:SeriesCPreferredStockBaseMember 2022-10-04 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember INBS:SeriesCPreferredStockBaseMember 2022-10-04 0001725430 INBS:IntelligentFingerprintingLimitedMember INBS:SeriesCPreferredStockHoldbackMember 2022-10-04 0001725430 srt:ProFormaMember 2022-07-01 2023-03-31 0001725430 us-gaap:TechnologyBasedIntangibleAssetsMember 2023-07-01 2024-03-31 0001725430 us-gaap:TechnologyBasedIntangibleAssetsMember 2024-03-31 0001725430 us-gaap:CustomerRelationshipsMember 2023-07-01 2024-03-31 0001725430 us-gaap:CustomerRelationshipsMember 2024-03-31 0001725430 us-gaap:TrademarksAndTradeNamesMember 2023-07-01 2024-03-31 0001725430 us-gaap:TrademarksAndTradeNamesMember 2024-03-31 0001725430 us-gaap:TechnologyBasedIntangibleAssetsMember 2022-07-01 2023-06-30 0001725430 us-gaap:TechnologyBasedIntangibleAssetsMember 2023-06-30 0001725430 us-gaap:CustomerRelationshipsMember 2022-07-01 2023-06-30 0001725430 us-gaap:CustomerRelationshipsMember 2023-06-30 0001725430 us-gaap:TrademarksAndTradeNamesMember 2022-07-01 2023-06-30 0001725430 us-gaap:TrademarksAndTradeNamesMember 2023-06-30 0001725430 us-gaap:CommonStockMember INBS:SecuritiesPurchaseAgreementMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 2024-03-08 0001725430 us-gaap:WarrantMember INBS:SecuritiesPurchaseAgreementMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 2024-03-08 0001725430 us-gaap:WarrantMember INBS:SecuritiesPurchaseAgreementMember INBS:SeriesHOneWarrantsMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 2024-03-08 0001725430 us-gaap:WarrantMember INBS:SecuritiesPurchaseAgreementMember INBS:SeriesHTwoWarrantsMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 2024-03-08 0001725430 INBS:SeriesHOneAndHTwoWarrantsMember INBS:SecuritiesPurchaseAgreementMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 0001725430 INBS:SecuritiesPurchaseAgreementMember us-gaap:CommonStockMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 0001725430 INBS:SecuritiesPurchaseAgreementMember INBS:SeriesHTwoWarrantsMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 2024-03-08 0001725430 INBS:PlacementAgencyAgreementMember INBS:MarchTwoThousandTwentyFourPrivatePlacementMember 2024-03-08 2024-03-08 0001725430 INBS:WarrantInducementAgreementsMember INBS:SeriesEWarrantsMember 2024-02-04 0001725430 INBS:WarrantInducementAgreementsMember INBS:SeriesGWarrantsMember 2024-02-04 0001725430 INBS:WarrantInducementAgreementsMember INBS:SeriesEWarrantsMember 2024-02-04 2024-02-04 0001725430 INBS:WarrantInducementAgreementsMember INBS:SeriesEWarrantsMember us-gaap:CommonStockMember 2024-02-04 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember 2023-10-04 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember 2023-10-04 2023-10-04 0001725430 INBS:SeriesEConvertiblePreferredStockMember INBS:OctoberTwoThousandTwentyThreeOfferingMember 2023-10-04 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember us-gaap:SeriesEPreferredStockMember 2023-10-04 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember us-gaap:SeriesEPreferredStockMember 2023-10-04 2023-10-04 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember INBS:SeriesEWarrantsMember 2023-10-04 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember INBS:SeriesFWarrantsMember 2023-10-04 0001725430 INBS:OctoberTwoThousandTwentyThreeOfferingMember INBS:SeriesFWarrantsMember 2023-10-04 2023-10-04 0001725430 INBS:SeriesEWarrantsMember 2023-10-04 0001725430 INBS:SeriesEWarrantsMember INBS:JanuaryTwoThousandTwentyFourReverseStockSplitMember 2023-10-04 2023-10-04 0001725430 INBS:SeriesEWarrantsMember INBS:JanuaryTwoThousandTwentyFourReverseStockSplitMember 2023-10-04 0001725430 INBS:SeriesFWarrantsMember INBS:JanuaryTwoThousandTwentyFourReverseStockSplitMember 2023-10-04 0001725430 2023-10-04 0001725430 us-gaap:CommonStockMember 2023-10-04 2023-10-04 0001725430 us-gaap:CommonStockMember 2023-10-04 0001725430 INBS:IFPSellersMember 2023-10-04 2023-10-04 0001725430 INBS:IFPSellersMember us-gaap:SeriesCPreferredStockMember 2023-10-04 2023-10-04 0001725430 us-gaap:SeriesCPreferredStockMember 2023-10-04 0001725430 INBS:SeriesEConvertiblePreferredStockMember 2023-10-01 2023-12-31 0001725430 INBS:SeriesFWarrantsMember 2023-10-01 2023-12-31 0001725430 INBS:ConsultingAgreementMember 2024-02-29 2024-02-29 0001725430 INBS:ConsultingAgreementMember 2024-02-29 0001725430 INBS:ConsultingAgreementMember 2024-01-01 2024-03-31 0001725430 INBS:ConsultingAgreementMember 2023-07-01 2024-03-31 0001725430 INBS:AdvisoryAgreementMember 2024-02-29 0001725430 INBS:AdvisoryAgreementMember 2024-02-29 2024-02-29 0001725430 INBS:AdvisoryAgreementMember 2024-01-01 2024-03-31 0001725430 INBS:AdvisoryAgreementMember 2023-07-01 2024-03-31 0001725430 us-gaap:SeriesCPreferredStockMember INBS:ShareExchangeAgreementMember 2023-07-01 2024-03-31 0001725430 us-gaap:SeriesCPreferredStockMember INBS:ShareExchangeAgreementMember INBS:JanuaryTwoThousandTwentyFourReverseStockSplitMember 2024-03-31 0001725430 us-gaap:FairValueInputsLevel3Member 2023-03-31 0001725430 us-gaap:FairValueInputsLevel2Member 2023-06-30 0001725430 us-gaap:FairValueInputsLevel2Member 2023-07-01 2023-09-30 0001725430 us-gaap:FairValueInputsLevel2Member 2023-09-30 0001725430 us-gaap:FairValueInputsLevel2Member 2023-10-01 2023-12-31 0001725430 us-gaap:FairValueInputsLevel2Member 2023-12-31 0001725430 us-gaap:FairValueInputsLevel2Member 2024-01-01 2024-03-31 0001725430 us-gaap:FairValueInputsLevel2Member 2024-03-31 0001725430 srt:ChiefFinancialOfficerMember INBS:OctoberTwoThousandTwentyThreeOfferingMember 2023-07-01 2024-03-31 0001725430 INBS:ChristopherTowersMember INBS:OctoberTwoThousandTwentyThreeOfferingMember 2023-07-01 2024-03-31 0001725430 INBS:ClianthaResearchMember 2024-02-09 2024-02-09 0001725430 INBS:ClianthaResearchMember 2024-03-31 0001725430 INBS:WarrantsMember 2024-01-01 2024-03-31 0001725430 INBS:WarrantsMember 2023-01-01 2023-03-31 0001725430 INBS:WarrantsMember 2023-07-01 2024-03-31 0001725430 INBS:WarrantsMember 2022-07-01 2023-03-31 0001725430 us-gaap:PreferredStockMember 2024-01-01 2024-03-31 0001725430 us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0001725430 us-gaap:PreferredStockMember 2023-07-01 2024-03-31 0001725430 us-gaap:PreferredStockMember 2022-07-01 2023-03-31 0001725430 us-gaap:SubsequentEventMember INBS:PrefundedWarrantsMember 2024-04-01 2024-04-01 0001725430 us-gaap:SubsequentEventMember INBS:EmployeeMember INBS:TwoThousandNineteenLongTermIncentivePlanMember 2024-04-01 2024-04-01 0001725430 us-gaap:SubsequentEventMember 2024-04-01 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure iso4217:GBP

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended March 31, 2024

 

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 001-39825

 

Intelligent Bio Solutions Inc.

(Exact name of Registrant as specified in its Charter)

 

Delaware   82-1512711
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)
     
Intelligent Bio Solutions Inc.,    
142 West, 57th Street, 11th Floor, New York, NY   10019
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (646) 828-8258

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.01 per share   INBS   The Nasdaq Stock Market LLC

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ 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). YES ☒ 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
Non-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 May 6, 2024, there were 3,117,049 shares of the registrant’s Common Stock issued and outstanding.

 

 

 

 

 

 

Table of Contents

 

  Page
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements (unaudited) 3
  Condensed Consolidated Balance Sheets 3
  Condensed Consolidated Statements of Operations and Other Comprehensive Loss 4
  Condensed Consolidated Statements of Changes in Shareholders’ Equity 5
  Condensed Consolidated Statements of Cash Flows 7
  Notes to Condensed Consolidated Financial Statements 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23
Item 3. Quantitative and Qualitative Disclosures About Market Risk 29
Item 4. Controls and Procedures 30
     
PART II. OTHER INFORMATION 31
Item 1. Legal Proceedings 31
Item 1A. Risk Factors 31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 33
Item 3. Defaults Upon Senior Securities 33
Item 4. Mine Safety Disclosures 33
Item 5. Other Information 33
Item 6. Exhibits 34
Signatures 35

 

2

 

 

Intelligent Bio Solutions Inc.

Condensed Consolidated Balance Sheets

 

   As of March 31,   As of June 30, 
   2024   2023 
   (Unaudited)     
ASSETS          
Current assets:          
Cash and cash equivalents  $9,397,523   $1,537,244 
Accounts receivable, net   431,646    293,861 
Inventories, net   877,905    979,907 
Research and development tax incentive receivable   332,471    498,758 
Other current assets   481,046    552,791 
Total current assets   11,520,591    3,862,561 
Property and equipment, net   559,520    690,175 
Operating lease right-of-use assets   365,512    546,475 
Intangibles, net   4,593,330    5,255,401 
Total assets  $17,038,953   $10,354,612 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable and accrued expenses  $2,128,747   $2,610,028 
Current portion of operating lease liabilities   260,377    223,447 
Current portion of deferred grant income   2,288,660    2,338,057 
Current employee benefit liabilities   660,010    358,942 
Current portion of notes payable   368,513    353,211 
Total current liabilities   5,706,307    5,883,685 
Employee benefit liabilities, less current portion   30,286    24,902 
Operating lease liabilities, less current portion   154,162    356,165 
Notes payable, less current portion   150,426    402,862 
Total liabilities   6,041,181    6,667,614 
Commitments and contingencies (Note 13)   -    - 
           
Shareholders’ equity          
Common stock, $0.01 par value, 100,000,000 shares authorized, 2,913,799 and 194,200 shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively*   29,135    1,942 
Treasury stock, at cost, 116 shares as of March 31, 2024 and June 30, 2023, respectively*   (1)   (1)
Additional paid-in capital   60,946,174    46,180,112 
Accumulated deficit   (49,180,085)   (41,807,573)
Accumulated other comprehensive loss   (662,405)   (575,496)
Total consolidated Intelligent Bio Solutions Inc. equity   11,132,818    3,798,984 
Non-controlling interest   (135,046)   (111,986)
Total shareholders’ equity   10,997,772    3,686,998 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $17,038,953   $10,354,612 

 

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

 

* Common stock and per share amount have been retroactively adjusted to reflect the decreased number of shares resulting from a 1-for-12 reverse stock split effected on January 26, 2024, and a 1-for-20 reverse stock split effected on February 9, 2023, throughout the condensed consolidated financial statement unless otherwise stated.

 

3

 

 

Intelligent Bio Solutions Inc.

Condensed Consolidated Statements of Operations and Other Comprehensive Loss*

(Unaudited)

 

*            
   Three Months ended March 31,   Nine Months ended March 31, 
   2024   2023   2024   2023 
Revenue  $823,800   $457,058   $2,383,957   $813,737 
Cost of revenue (exclusive of amortization shown separately below)   (645,311)   (424,009)   (1,773,889)   (536,644)
Gross profit   178,489    33,049    610,068    277,093 
                     
Other income:                    
Government support income   83,842    117,680    346,917    698,625 
                     
Operating expenses:                    
Selling, general and administrative expenses   (2,425,830)   (1,898,754)   (6,587,934)   (5,594,461)
Development and regulatory approval expenses   (471,313)   (299,898)   (923,712)   (380,363)
Depreciation and amortization   (318,923)   (398,986)   (916,796)   (797,142)
Goodwill impairment   -    (4,096,490)   -    (4,096,490)
Total operating expenses   (3,216,066)   (6,694,128)   (8,428,442)   (10,868,456)
Loss from operations   (2,953,735)   (6,543,399)   (7,471,457)   (9,892,738)
                     
Other income (expense), net:                    
Interest expense   (42,674)   (86,125)   (112,590)   (163,957)
Realized foreign exchange income/(loss)   (996)   7,212    (1,551)   (8,936)
Fair value gain on revaluation of financial instrument   -    269,787    175,738    2,062,878 
Interest income   10,640    508    14,288    9,587 
Total other income (expense), net   (33,030)   191,382    75,885    1,899,572 
Net loss   (2,986,765)   (6,352,017)   (7,395,572)   (7,993,166)
Net loss attributable to non-controlling interest   (9,098)   (8,111)   (23,060)   (20,367)
Net loss attributable to Intelligent Bio Solutions Inc.  $(2,977,667)  $(6,343,906)  $(7,372,512)  $(7,972,799)
                     
Other comprehensive income/(loss), net of tax:                    
Foreign currency translation gain/ (loss)   (144,026)   (77,787)   (86,909)   148,251 
Total other comprehensive income/(loss)    (144,026)   (77,787)   (86,909)   148,251 
Comprehensive loss   (3,130,791)   (6,429,804)   (7,482,481)   (7,844,915)
Comprehensive loss attributable to non-controlling interest   (9,098)   (8,111)   (23,060)   (20,367)
Comprehensive loss attributable to Intelligent Bio Solutions Inc.   (3,121,693)   (6,421,693)   (7,459,421)   (7,824,548)
                     
Net loss per share, basic and diluted*  $(1.43)  $(68.67)  $(6.64)  $(104.04)
Weighted average shares outstanding, basic and diluted*   2,079,864    92,389    1,110,089    76,629 

 

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

 

* Common stock and per share amount have been retroactively adjusted to reflect the decreased number of shares resulting from a 1-for-12 reverse stock split effected on January 26, 2024, and a 1-for-20 reverse stock split effected on February 9, 2023, throughout the condensed consolidated financial statement unless otherwise stated.

 

4

 

 

Intelligent Bio Solutions Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity*

For the three and nine months ended March 31, 2024 and 2023

(Unaudited)

 

*  Shares      Shares      Shares                   
  

Convertible

preferred stock

   Common stock   Treasury stock   Additional paid in   Accumulated   Other comprehensive   Non- controlling   Total shareholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   capital   deficit   income   interest   equity 
Balance, June 30, 2023*   -   $-    194,200   $1,942    (116)  $(1)  $46,180,112   $(41,807,573)  $(575,496)  $(111,986)  $3,686,998 
Foreign currency translation loss   -    -    -    -    -    -    -    -    (18,016)   -    (18,016)
Net loss   -    -    -    -    -    -    -    (2,425,204)   -    (7,220)   (2,432,424)
Balance, September 30, 2023    -    -    194,200    1,942    (116)   (1)   46,180,112    (44,232,777)   (593,512)   (119,206)   1,236,558 
Issuance of common stock, Series E Preferred Stock and warrants, net of issuance costs   5,728,723    57,287    186,018    1,860    -    -    3,727,017    -    -    -    3,786,164 
Conversion of convertible preferred shares into common stock   (5,728,723)   (57,287)   477,394    4,774    -    -    52,513    -    -    -    - 
Conversion of holdback Series C Preferred Stock into common stock   -    -    6,248    62    -    -    32,700    -    -    -    32,762 
Issuance of common stock upon cashless exercise Series F warrants   -    -    612,182    6,122    -    -    (6,122)   -    -    -    - 
Foreign currency translation gain   -    -    -    -    -    -    -    -    75,133    -    75,133 
Net loss   -    -    -    -    -    -    -    (1,969,641)   -    (6,742)   (1,976,383)
Balance, December 31, 2023    -    -    1,476,042    14,760    (116)   (1)   49,986,220    (46,202,418)   (518,379)   (125,948)   3,154,234 
Reverse stock split rounding adjustment   -    -    47,501    475    -    -    (475)   -    -    -    - 
Issuance of common stock upon cash exercise of Series E warrants    -    -    629,409    6,291    -    -    1,645,207    -    -    -    1,651,498 
Issuance of restricted stock to vendors   -    -    42,760    428    -    -    204,393    -    -    -    204,821 
Issuance of common stock upon cashless exercise of Series F warrants   -    -    42,904    429    -    -    -    -    -    -    429 
Issuance of common stock, Series I, H1 and H2 warrants, net of issuance costs   -    -    675,183    6,752    -    -    9,110,829    -    -    -    9,117,581 
Foreign currency translation loss   -    -    -    -    -    -    -    -    (144,026)   -    (144,026)
Net loss   -    -    -    -    -    -    -    (2,977,667)   -    (9,098)   (2,986,765)
Balance, March 31, 2024    -   $-    2,913,799   $29,135    (116)  $(1)  $60,946,174   $(49,180,085)  $(662,405)  $(135,046)  $10,997,772 

 

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

 

* Common stock and per share amount have been retroactively adjusted to reflect the decreased number of shares resulting from a 1-for-12 reverse stock split effected on January 26, 2024, and a 1-for-20 reverse stock split effected on February 9, 2023, throughout the condensed consolidated financial statement unless otherwise stated.

 

5

 

 

Intelligent Bio Solutions Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity*

For the three and nine months ended March 31, 2024 and 2023

(Unaudited)

 

  

Convertible

preferred stock

   Common stock   Treasury stock   Additional  paid in   Accumulated   Other comprehensive   Non- controlling   Total shareholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   capital   deficit   income   interest   equity 
Balance, June 30, 2022    -   $-    62,042   $620    -   $-   $38,588,290   $(31,175,853)  $(788,135)  $(79,151)  $6,545,771 
Foreign currency translation loss   -    -    -    -    -    -    -    -    (135,559)   -    (135,559)
Net loss   -    -    -    -    -    -    -    (1,208,293)   -    (5,785)   (1,214,078)
Balance, September 30, 2022    -    -    62,042    620    -    -    38,588,290    (32,384,146)   (923,694)   (84,936)   5,196,134 
Issuance of Series C preferred stock and common stock for acquisition, net of issuance costs   2,363,003    23,630    12,347    124    -    -    4,700,517    -    -    -    4,724,271 
Issuance of Series D preferred stock, net of issuance costs   176,462    1,765    -    -    -    -    160,695    -    -    -    162,460 
Stock awards issued to employees   -    -    2,084    21    -    -    259,979    -    -    -    260,000 
Payment of tax withholding for employee stock awards   -    -    -    -    (116)   (1)   (14,407)   -    -    -    (14,407)
Foreign currency translation gain   -    -    -    -    -    -    -    -    361,597    -    361,597 
Net loss   -    -    -    -    -    -    -    (420,600)   -    (6,471)   (427,071)
Balance, December 31, 2022   2,539,465    25,395    76,473    765    (116)   (1)   43,695,074    (32,804,746)   (562,097)   (91,407)   10,262,984 
Reverse stock split rounding adjustment   -    -    938    9    -    -    (9)   -    -    -    - 
Issuance of common stock and warrants, net of issuance costs   -    -    54,583    546    -    -    2,093,120    -    -    -    2,093,666 
Issuance of common stock upon cashless exercise of warrants   -    -    8,465    85    -    -    (85)   -    -    -    - 
Foreign currency translation loss   -    -    -    -    -    -    -    -    (77,787)   -    (77,787)
Net loss   -    -    -    -    -    -    -    (6,343,906)   -    (8,111)   (6,352,017)
Balance, March 31, 2023   2,539,465   $25,395    140,459   $1,405    (116)  $(1)  $45,788,100   $(39,148,652)  $(639,884)  $(99,518)  $5,926,846 

 

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

 

* Common stock and per share amount have been retroactively adjusted to reflect the decreased number of shares resulting from a 1-for-12 reverse stock split effected on January 26, 2024, and a 1-for-20 reverse stock split effected on February 9, 2023, throughout the condensed consolidated financial statement unless otherwise stated.

 

6

 

 

Intelligent Bio Solutions Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited)

 

       
   Nine Months Ended March 31, 
   2024   2023 
Cash Flows from Operating Activities          
Net loss  $(7,395,572)  $(7,993,166)
Adjustment to reconcile net loss to cash used in operating activities          
Depreciation and amortization   737,906    702,487 
Depreciation included in cost of revenue   8,602    - 
Depreciation on leased assets   178,891    94,171 
Non-cash loss on foreign currency translation, net   -    8,936 
Provision for credit losses   6,759    - 
Provision for inventory write-off   69,279    186,834 
Goodwill impairment   -    4,096,490 
Stock-based compensation   218,305    260,000 
Non-cash refund of R&D expenditure claims   (112,293)   (125,128)
Fair value gain on revaluation of convertible notes   -    (1,455,078)
Fair value gain on revaluation of holdback Series C Preferred Stock   (175,738)   (607,800)
Non-cash other operating activities   8,053    - 
Changes in operating assets and liabilities:          
Accounts receivable   (66,040)   (296,049)
Inventories   102,002    (74,866)
Grant receivable/deferred grant income   -    (213,543)
Research and development tax incentive receivable   166,287    (225,408)
Other current assets   -    (187,273)
Accounts and other payables   (481,281)   (937,960)
Other payables   266,973    - 
Other long-term liabilities   5,384   (25,687)
Operating lease liabilities   (165,072)   - 
Net cash used in operating activities   (6,627,555)   (6,793,040)
           
Cash flows from Investing Activities          
Cash acquired from business acquisition   -    174,481 
Cash payment for business acquisition   -    (181,750)
Amount invested on construction in progress   (54,118)   (505,123)
Net cash used in investing activities   (54,118)   (512,392)
           
Cash flows from Financing Activities          
Proceeds from issuance of common stock and warrants, net of issuance costs   3,786,164    2,554,463 
Proceeds from exercise of warrants, net of issuance costs   1,651,498    - 
Proceeds from private placement, net of issuance costs   9,117,581    - 
Proceeds from issuance of preferred stock   -    220,578 
Payment of equity issuance costs - others   -    (464,727)
Payment of equity issuance costs relating to acquisition of IFP   -    (806,397)
Payment of tax withholding for employee stock awards   -    (14,407)
Payment of finance lease liabilities   -    (100,297)
Net cash provided by financing activities   14,555,243    1,389,213 
           
Effect of foreign exchange rates on cash and cash equivalents   (13,291)   (41,538)
           
Net increase (decrease) in cash and cash equivalents   7,860,279    (5,957,757)
Cash and cash equivalents, beginning of period   1,537,244    8,238,301 
Cash and cash equivalents, end of period  $9,397,523   $2,280,544 
           
Non-cash investing and financing activities          
Shares issued for business acquisition  $-   $5,530,667 
Note receivable settled for business acquisition   -    504,398 
Deferred consideration payable for business combination   -    399,250 
Equity issuance costs in accounts payable and accrued expenses   185,688    54,187 
Conversion of preferred shares into common shares   

57,287

    - 
Conversion of holdback Series C Preferred Stock into common stock   

32,762

    - 
Issuance of common stock upon cashless exercise of Series F warrants   

6,551

    - 

 

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

 

7

 

 

Intelligent Bio Solutions Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF THE BUSINESS

 

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. Our Australian subsidiary Intelligent Bio Solutions (APAC) Pty Ltd (formerly known as Glucose Biosensor Systems (Greater China) Pty Ltd) was formed on August 4, 2016, under the laws of New South Wales, Australia and was renamed to Intelligent Bio Solutions (APAC) Pty Ltd on January 6, 2023. On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales (the “IFP Acquisition”). INBS and its subsidiaries (collectively, “we,” “us,” “our,” “INBS” or the “Company,” unless context requires or indicates otherwise) were formed to provide non-invasive, pain free innovative medical devices and screening devices. Our headquarters are in New York, New York.

 

We are a medical technology company focused on developing and delivering intelligent, rapid, non-invasive testing and screening solutions. We operate globally with the objective of providing innovative and accessible solutions that improve the quality of life.

 

Reverse Stock Splits

 

January 2024 Reverse Stock Split

 

On January 26, 2024, the Company filed a certificate of amendment to its amended and restated certificate of incorporation to effect, as of 5:00 p.m. January 26, 2024, a 1-for-12 reverse split of the Company’s common stock (the “January 2024 Reverse Stock Split”). The Company’s common stock began trading on a reverse stock split-adjusted basis on The Nasdaq Capital Market (“Nasdaq Capital Market” or “Nasdaq”) on January 29, 2024.

 

February 2023 Reverse Stock Split

 

On February 9, 2023, the Company filed a certificate of amendment to its amended and restated certificate of incorporation to effect, as of 5:00 p.m. February 9, 2023, a 1-for-20 reverse split of the Company’s common stock (the “February 2023 Reverse Stock Split”). The Company’s common stock began trading on a reverse stock split-adjusted basis on The Nasdaq Capital Market on February 10, 2023.

 

The reverse stock splits were implemented for the purpose of regaining compliance with the minimum bid price requirement for continued listing of the Company’s common stock on the Nasdaq Capital Market.

 

Unless otherwise indicated, all authorized, issued, and outstanding stock and per share amounts contained in the accompanying condensed consolidated financial statements have been adjusted to reflect both the 1-for-20 Reverse Stock Split on February 9, 2023 and the 1-for-12 Reverse Stock Split on January 26, 2024. The February 2023 Reverse Stock Split and the January 2024 Reverse Stock Split are collectively referred to herein as the “Company’s Reverse Stock Splits”.

 

NOTE 2. LIQUIDITY AND GOING CONCERN

 

On October 4, 2023, the Company raised approximately $4.38 million, prior to deducting underwriting discounts and commissions and offering expenses, via a registered underwritten public offering of the Company’s securities. Net proceeds to the Company, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company, were approximately $3.79 million. Refer to Note 10 for details.

 

On February 7, 2024, the Company raised approximately $1.77 million, prior to deducting closing costs and placement agent fees, via a warrant inducement transaction with holders of the Company’s Series E Warrants issued on October 4, 2023. Net proceeds to the Company, after deducting closing costs, placement agent fees, and other estimated expenses payable by the Company, were approximately $1.58 million. Refer to Note 10 for details.

 

On March 12, 2024, the Company raised approximately $10.1 million, prior to deducting placement agent’s fees and other offering expenses via a private placement of common stock and warrants priced at-the-market under Nasdaq rules. Net proceeds to the Company, after deducting placement agent’s fees and other estimated offering expenses payable by the Company, were approximately $9.1 million. Refer to Note 10 for details.

 

The Company incurred a net loss of $2,977,667 and $7,372,512 (after losses attributable to non-controlling interest) for the three and nine months ended March 31, 2024, respectively (net loss of $6,343,906 and $7,972,799 for the three and nine months ended March 31, 2023, respectively). As of March 31, 2024, the Company has shareholders’ equity of $10,997,772, working capital of $5,814,284, and an accumulated deficit of $49,180,085.

 

The Company anticipates operating losses for the foreseeable future. The Company does not expect to generate positive cash flows from operating activities and may continue to incur operating losses until it sufficiently delivers on its objectives which include completion of the regulatory approval process in the United States of America (USA) and other markets where such approval may be required, expansion of its revenue base into target markets, and the continued development of its products.

 

8

 

 

The ability to achieve these objectives is subject to inherent risks and no assurance can be provided that these objectives will be fully achieved within the next 12 months.

 

The Company has evaluated whether there are conditions and events, considered in the aggregate, that raise a substantial doubt about its ability to continue as going concern within one year after the date of release of the unaudited condensed consolidated financial statements. As a result, the Company believes there is material risk that its cash and cash equivalents as of March 31, 2024, of $9,397,523, may be insufficient to allow the Company to fund its current operating plan through at least the next twelve months from the issuance of these unaudited condensed consolidated financial statements. 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 are issued. Accordingly, the Company may 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 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.

 

Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern unless it can successfully meet the stated objectives and/or raise additional capital.

 

The Company’s 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. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities should the Company be unable to continue as a going concern.

 

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 accounting principles generally accepted in the United States of America (“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 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 nine months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending June 30, 2024. 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, 2023, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 23, 2023 (the “2023 Form 10-K”).

 

The unaudited condensed consolidated financial statements and notes thereto give retrospective effect to the stock splits 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 stock splits 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 intercompany transactions and balances have been eliminated upon consolidation.

 

Equity offering costs

 

The Company complies with the requirements of Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized as deferred offering costs on the consolidated balance sheets. The deferred offering costs will be charged to shareholders’ equity upon the completion of the related offering.

 

Use of estimates

 

The preparation of consolidated financial statements in conformity with 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 consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates.

 

Business combinations

 

The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. The Company uses the acquisition method of accounting and allocates the purchase price to the identifiable assets and liabilities of the relevant acquired business at their acquisition date fair values. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. The allocation of the purchase price in a business combination requires the Company to perform valuations with significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair value of assets acquired and liabilities assumed in a business combination. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Transaction costs associated with business combinations are expensed as incurred and are included in selling, general and administrative expenses in the consolidated statements of operations.

 

9

 

 

Revenue recognition

 

Revenue is accounted for under ASC 606, Revenue from Contracts with Customers, through the following steps:

 

  Identify the contract with a customer;
  Identify the performance obligations in the contract;
  Determine the transaction price;
  Allocate the transaction price to performance obligations in the contract; and
  Recognize revenue when or as the Company satisfies a performance obligation.

 

The Company recognized revenue from contracts with customers that satisfies its performance obligations by delivering the promised goods or service deliverables to the customers. A good or service deliverable is transferred to a customer when, or as, the customer obtains control of the good or service deliverable.

 

Financial information presented on a consolidated basis is accompanied by disaggregated information about revenue and other income by product type for the purpose of allocating resources and evaluating financial performance. Currently, the Company has two products offerings. Accordingly, the Company has determined the following reporting segments (refer to Note 4, Segment Information):

 

  1) Commercially available Intelligent Fingerprinting Products (“IFPG” or “IFPG segment”)
  2) Development Stage Saliva Glucose Biosensor Platform (“SGBP” or “SGBP segment”)

 

Revenues are used to evaluate the performance of the Company’s segments, the progress of major initiatives and the allocation of resources. All of the Company’s revenues are attributable to the IFPG segment during the three and nine months ended March 31, 2024 and 2023.

 

Revenue from the IFPG segment relates to the sale of readers, cartridges and accessories and is summarized as follows:

 

   2024   2023   2024   2023 
   Three Months ended March 31,   Nine Months ended March 31, 
   2024   2023   2024   2023 
Sales of goods - cartridges  $448,868   $252,682   $1,159,876   $467,043 
Sales of goods - readers   227,361    134,366    752,052    237,554 
Other sales   147,571    70,010    472,029    109,140 
Total revenue  $823,800   $457,058   $2,383,957   $813,737 

 

Other income

 

The other income is mainly comprised of grant income and Research & Development (“R&D”) tax refund.

 

a) Grant income

 

On June 30, 2021, the Company executed a definitive grant agreement with the Australian Government to assist with building a manufacturing facility. The grant has a total value of up to $4.7 million upon the achievement of certain milestones until March 28, 2024 (extended to March 28, 2025 on April 16, 2024) Proceeds from the grant will be used primarily to reimburse the Company for costs incurred in the construction of the manufacturing facility.

 

Accounting for the grant does not fall under ASC 606, Revenue from Contracts with Customers, as the Australian Government will not benefit directly from our manufacturing facility. As there is no authoritative guidance under U.S. GAAP on accounting for grants to for-profit business entities, we applied International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance, by analogy when accounting for the Australian Government grant to the Company. Furthermore, disclosures made below are in accordance with the disclosure requirements of Accounting Standards Update (“ASU”) 2021-10.

 

The Australian Government grant proceeds, which will be used to reimburse construction costs incurred, meet the definition of grants related to assets as the primary purpose for the payments is to fund the construction of a capital asset. Under IAS 20, government grants related to assets are presented in the statement of financial position either by setting up the grant as deferred income that is recognized in the statement of operation on a systematic basis over the useful life of the asset or by deducting the grant in arriving at the carrying amount of the asset. Either of these two methods of presentation of grants related to assets in financial statements are regarded as acceptable alternatives under IAS 20. The Company has elected to record the grants received initially as deferred income and deduct the grant proceeds received from the gross costs of the assets or construction in progress (“CIP”) and the deferred grant income liability. A total of $535,863 and $646,116 was recognized as a reduction to the CIP asset on the consolidated balance sheets as of March 31, 2024 and June 30, 2023, respectively.

 

10

 

 

Under IAS 20, government grants are initially recognized when there is reasonable assurance the conditions of the grant will be met and the grant will be received. As of June 30, 2021, management concluded that there was reasonable assurance the grant conditions will be met and all milestone payment received. The total grant value of $4.7 million was recognized as both a grant receivable and deferred grant income on the grant effective date. The project has been delayed due to global shortages of semiconductors that are used in manufacturing equipment and global supply chain disruption due to the coronavirus pandemic in the preceding year. The Company has only completed 4 of the 8 milestones in the grant agreement as of March 31, 2024. Subsequent to the quarter ended March 31, 2024, on April 16, 2024, the Company entered into a Deed of Variation with Australian Government, Department of Industry, Science and Resources, extending the project completion date to March 28, 2025. The deed of variation also made certain modifications to the project costs. The overall budget of the project has been reduced by $1.65 million to account for the changes in scope of the project.

 

After initial recognition, under IAS 20, government grants are recognized in earnings on a systematic basis in a manner that mirrors the manner in which the Company recognizes the underlying costs for which the grant is intended to compensate. Further, IAS 20 permits for recognition of earnings either separately under a general heading such as other income, or as a reduction of the cost of the asset. The Company has elected to recognize government grant income separately within other income for operating expenditures. Similarly, for capital expenditures, the carrying amount of assets purchased or constructed out of the grant funds are presented net by deducting the grant proceeds received from the gross costs of the assets or CIP and deferred grant income liability. A total of $34,011 and $112,293 deferred grant income was recognized within other income during the three and nine months ended March 31, 2024, respectively. Deferred grant income recognized within other income during the three and nine months ended March 31, 2023, was $26,576 and $125,128, respectively.

 

b) R&D tax refund

 

The Company measures the R&D grant income and receivable by considering the time spent by employees on eligible R&D activities and R&D costs incurred to external service providers. The R&D tax refund receivable is recognized when it is probable that the amount will be recovered in full through a future claim. A total of $49,831 and $234,624 of R&D tax refund income was recognized in other income during the three and nine months ended March 31, 2024, respectively. R&D tax refund income was $91,104 and $573,497 during the three and nine months ended March 31, 2023, respectively.

 

Development and regulatory approval expenses

 

Expenditures relating to R&D are expensed as incurred and recorded in development and regulatory approval in the condensed consolidated statements of operations and other comprehensive loss. R&D expenses include external expenses incurred under arrangements with third parties; salaries and personnel-related costs; license fees to acquire in-process technology and other expenses. The Company recognizes the benefit of refundable R&D tax refunds as a R&D tax refund income when there is reasonable assurance that the amount claimed will be recovered (refer to the R&D tax refund discussion above).

 

Intellectual property acquired for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) are expensed in research and development costs at the time the costs are incurred.

 

In certain circumstances, the Company may be required to make advance payments to vendors for goods or services that will be received in the future for use in R&D activities. In such circumstances, the non-refundable advance payments are deferred and capitalized, even when there is no alternative future use for the R&D, until the related goods or services are provided. In circumstances where amounts have been paid in excess of costs incurred, the Company records a prepaid expense.

 

Equity-Based Compensation

 

Equity-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term. To the extent possible, the Company will estimate and recognize expected forfeitures.

 

Foreign currency translation

 

Assets and liabilities of foreign subsidiaries are translated from local (functional) currency to reporting currency (U.S. dollar) at the spot rate on the consolidated balance sheets date; income and expenses are translated at the average rate of exchange prevailing during the year. The functional currency of INBS is the United States dollar. Foreign currency movements resulted in a loss of $144,026 and $86,909 for the three and nine months ended March 31, 2024, respectively. Foreign currency movements resulted in a loss of $77,787 and a gain of $148,251 for the three and nine months ended March 31, 2023, respectively.

 

Income taxes

 

In accordance with the provisions of ASC 740, Income Taxes, tax positions initially need to be recognized in the consolidated financial statements when it is more likely than not that the positions will be sustained upon examination by taxing authorities. It also provides guidance for de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

 

As of March 31, 2024, the Company had no uncertain tax positions that qualified for either recognition or disclosure in the unaudited condensed consolidated financial statements. Additionally, the Company had no interest and penalties related to income taxes.

 

11

 

 

The Company accounts for current and deferred income taxes and, when appropriate, deferred tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based on the weight of all available evidence, it is more likely than not that some amount of the recorded deferred tax assets will not be realized, a valuation allowance is established for that amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

 

Cash and Cash equivalents

 

The Company considers all highly liquid investments with a maturity of 90 days or less to be cash equivalents. The carrying values of cash and cash equivalents approximate their fair values due to the short-term nature of these instruments. As of March 31, 2024 and June 30, 2023, there were no cash equivalents. The Company maintains cash accounts with financial institutions. At times, balances in these accounts may exceed federally insured limits. The amounts over these insured limits as of March 31, 2024, and June 30, 2023, were $8,963,120 and $1,114,687, respectively. No losses have been incurred to date on any deposits.

 

Inventories, net

 

Inventories are stated at the lower of cost or net realizable value. Cost comprises direct materials and, where applicable, other costs that have been incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. General market conditions, as well as the Company’s research activities, can cause certain of its products to become obsolete. The Company writes down excess and obsolete inventories based upon a regular analysis of inventory on hand compared to historical and projected demand. The determination of projected demand requires the use of estimates and assumptions related to projected sales for each product. These write downs can influence results from operations.

 

Property, Plant and Equipment (PPE) & Construction in Progress (CIP)

 

In accordance with the ASC 360, Property, Plant, and Equipment, the Company’s PPE, except land, is stated at cost net of accumulated depreciation and impairment losses, if any. Land is stated at cost less any impairment losses. Costs incurred to acquire, construct, or install PPE, before the assets are ready for use, are capitalized in CIP at historical cost. The carrying amount of assets purchased or constructed out of the grant funds are presented net by deducting the grant proceeds received from the gross costs of the assets or CIP. CIP is not depreciated until such time when the asset is substantially completed and ready for its intended use. Expenditures for maintenance and repairs are charged to operations in the period in which the expense is incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset using the following terms:

 

  Other equipment – 3 years
  Production equipment – 2-4 years
  Leasehold improvements – shorter of asset’s estimated useful life and the remaining term of the lease

 

The assets’ residual values, useful lives and methods of depreciation are reviewed periodically and adjusted prospectively, if appropriate. Equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising upon de-recognition of the asset (calculated as the difference between the net disposal proceeds, if any, and the carrying value of the asset) is included in gain or loss on sale of assets in the consolidated statements of operations in the period the asset is derecognized.

 

Impairment of Long-lived Assets and Goodwill

 

Long-lived assets consist of property and equipment, right-of-use assets and other intangible assets. We assess impairment of assets groups, including intangible assets at least annually or more frequently if there are any indicators for impairment. The Company did not recognize any impairments of long-lived assets during the three and nine months ended March 31, 2024 and 2023.

 

Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination. We perform an annual impairment test on goodwill in the fourth quarter of each fiscal year or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit below its carrying value. We may first assess qualitative factors, such as general economic conditions, market capitalization, the Company’s outlook, market performance and forecasted financial performance to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we determine it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, an impairment test is not necessary. If an impairment test is necessary, we estimate the fair value of a related reporting unit. If the carrying value of a reporting unit exceeds its fair value, the goodwill of that reporting unit is determined to be impaired, and we will record an impairment charge equal to the excess of the carrying value over the related fair value of the reporting unit. If we determine it is more likely than not that goodwill is not impaired, a quantitative test is not necessary.

 

12

 

 

During the fiscal year ended June 30, 2023, the Company’s market capitalization significantly declined and recurring cash burn of the reporting unit and continuous cash support from the parent entity led management to reassess whether an impairment had occurred considering these qualitative factors. Management’s evaluation indicated that the goodwill related to its IFPG reporting unit was potentially impaired. The Company then performed a quantitative impairment test by calculating the fair value of the reporting unit and comparing that amount to its carrying value. Significant assumptions inherent in the valuation methodologies include, but were not limited to prospective financial information, growth rates, terminal value and discount rate. The Company determined the fair value of the reporting unit utilizing the discounted cash flow model. The fair value of the reporting unit was determined to be less than its carrying value. During the fiscal year ended June 30, 2023, the Company recognized an impairment charge of $4.2 million in the IFPG segment, which is related to the goodwill associated with the IFP Acquisition. Following the impairment charge the goodwill balance was zero.

 

Intangible assets

 

Intangible assets are considered long-lived assets and are recorded at cost, less accumulated amortization and impairment losses, if any. The definite lived intangible assets are amortized over their estimated useful lives, which do not exceed any contractual periods. Certain of our intangible assets have been assigned an indefinite life as we currently anticipate that these trade names and trademarks will contribute cash flows to the Company indefinitely. Indefinite-lived intangible assets are not amortized but are evaluated at least annually to determine whether the indefinite useful life is appropriate. Amortization is recorded on a straight-line basis over their estimated useful lives. Intangible assets acquired from a foreign operation are translated from the foreign entity’s functional currency to the presentational currency based on the exchange rate at the reporting date.

 

Leases

 

The Company determines if an arrangement is a lease at its inception. Lease arrangements are comprised primarily of real estate for which the right-of-use (“ROU”) assets and the corresponding lease liabilities are presented separately on the consolidated balance sheet.

 

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The lease term includes options to extend the lease when it is reasonably certain that the option will be exercised. Leases with a term of 12 months or less are not recorded on the unaudited condensed consolidated balance sheet.

 

The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date, considering publicly available data for instruments with similar characteristics. The Company accounts for the lease and non-lease components as a single lease component.

 

Employee benefits

 

The costs of short-term employee benefits are recognized as a liability and an expense unless those costs are required to be recognized as part of the cost of inventories or non-current assets. The cost of any unused holiday entitlement is recognized in the period in which the employee’s services are received. Termination benefits are recognized immediately as an expense when the Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

 

Net loss per share attributable to common shareholders (“EPS”)

 

The Company calculates earnings per share attributable to common shareholders in accordance with ASC 260, Earning Per Share. Basic net loss per share attributable to common shareholders is calculated by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is calculated by dividing net loss attributable to common shareholders by weighted average common shares outstanding during the period plus potentially dilutive common shares, such as share warrants.

 

Potentially dilutive common shares are calculated in accordance with the treasury share method, which assumes that proceeds from the exercise of all warrants are used to repurchase common share at market value. The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities.

 

As the Company has incurred net losses in all periods, certain potentially dilutive securities, including convertible preferred stock, warrants to acquire common stock, and convertible notes payable have been excluded in the computation of diluted loss per share as the effects are antidilutive.

 

Recently issued accounting pronouncements

 

The Company assessed the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board (“FASB”) on the Company’s financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. There were no new material accounting standards adopted during 2024 that impacted the Company.

 

Pending adoption:

 

13

 

 

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”)

 

In November 2023, the FASB issued ASU 2023-07 to enhance disclosures about significant segment expenses. The amendments in this ASU require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The amendments in this ASU also clarify circumstances in which an entity can disclose multiple segment measures of profit or loss and provide new segment disclosure requirements for entities with a single reportable segment. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Early adoption is permitted. The ASU is to be applied retrospectively to all periods presented in the financial statements. The Company has not early adopted and continues to evaluate the impact of the provisions of ASU 2023-07 on its unaudited condensed consolidated financial statements.

 

Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”)

 

In December 2023, the FASB issued ASU 2023-09 to enhance disclosures about income taxes. The amendments in this ASU require a public entity to disclose in tabular format, using both percentages and reporting currency amounts, specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. The amendments in this ASU also require taxes paid (net of refunds received) to be disaggregated by federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. The ASU is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. The ASU is to be applied prospectively upon adoption. The Company has not early adopted and continues to evaluate the impact of the provisions of ASU 2023-09 on its unaudited condensed consolidated financial statements.

 

Concentration of credit risk

 

The Company places its cash and cash equivalents, which may at times be in excess of the Australia Financial Claims Scheme, Financial Services Compensation Scheme or the United States’ 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.

 

Fair value of financial instruments

 

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

Level 1-Quoted prices in active markets for identical assets or liabilities.

 

Level 2-Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3-Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

 

The carrying amounts of cash equivalents, prepaid and other assets, accounts payable and accrued liabilities are representative of their respective fair values because of the short-term nature of those instruments.

 

NOTE 4. SEGMENT INFORMATION

 

ASC 280, Segment Reporting, establishes standards for the manner in which companies report financial information about operating segments, products, services, geographic areas and major customers.

 

Our Segments

 

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer.

 

Following the acquisition of IFP, we conduct our business through two operating segments:

 

  1) Commercially available Intelligent Fingerprinting Products (IFPG or IFPG segment)
  2) Development Stage Saliva Glucose Biosensor Platform (SGBP or SGBP segment)

 

The Company has determined it operates in two operating and reportable segments, as the CODM reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenue and other income by product types for the purpose of allocating resources and evaluating financial performance. Currently, the Company has two products offerings.

 

14

 

 

The IFPG segment accounted for 100% of the Company’s revenue during the three and nine months ended March 31, 2024 and 2023.

 

The following tables set forth the Company’s revenue, government support income, net loss and long-lived assets and inventories by operating and reportable segments.

 

  A) Revenue, government support income and net loss

 

   IFPG   SGBP   Total 
   Three Months Ended March 31, 2024 
   IFPG   SGBP   Total 
Revenue               
United Kingdom  $799,811   $-   $799,811 
Australia   8,789    -    8,789 
Other   15,200    -    15,200 
Total Revenue  $823,800   $-   $823,800 
                
Government Support Income               
United Kingdom  $19,767   $-   $19,767 
Australia   -    64,075    64,075 
Total Government Support Income  $19,767   $64,075   $83,842 
                
Total Revenue and Government Support Income  $843,567   $64,075   $907,642 
                
Net Loss  $(1,083,630)  $(1,903,135)  $(2,986,765)

 

   IFPG   SGBP   Total 
   Three Months Ended March 31, 2023 
   IFPG   SGBP   Total 
Revenue               
United Kingdom  $371,210   $-   $371,210 
Australia   -    -    - 
Other   85,848    -    85,848 
Total Revenue  $457,058   $-   $457,058 
                
Government Support Income               
United Kingdom  $49,267   $-   $49,267 
Australia   -    68,413    68,413 
Total Government Support Income  $49,267   $68,413   $117,680 
                
Total Revenue and Government Support Income  $506,325   $68,413   $574,738 
                
Net Loss  $(4,792,919)  $(1,559,098)  $(6,352,017)

 

   IFPG   SGBP   Total 
   Nine Months Ended March 31, 2024 
   IFPG   SGBP   Total 
Revenue               
United Kingdom  $2,210,409   $-   $2,210,409 
Australia   33,676    -    33,676 
Other   139,872    -    139,872 
Total Revenue  $2,383,957   $-   $2,383,957 
                
Government Support Income               
United Kingdom  $126,705   $-   $126,705 
Australia   -    220,212    220,212 
Total Government Support Income  $126,705   $220,212   $346,917 
                
Total Revenue and Government Support Income  $2,510,662   $220,212   $2,730,874 
                
Net Loss  $(2,732,728)  $(4,662,844)  $(7,395,572)

 

   IFPG   SGBP   Total 
   Nine Months Ended March 31, 2023 
   IFPG   SGBP   Total 
Revenue               
United Kingdom  $676,883   $-   $676,883 
Australia   -    -    - 
Other   136,854    -    136,854 
Total Revenue  $813,737   $-   $813,737 
                
Government Support Income               
United Kingdom  $156,824   $-   $156,824 
Australia   -    541,801    541,801 
Total Government Support Income  $156,824   $541,801   $698,625 
                
Total Revenue and Government Support Income  970,561   $541,801   $1,512,362 
                
Net Loss  $(4,454,451)  $(3,538,715)  $(7,993,166)

 

15

 

 

  B) Long-lived assets and inventories

 

   IFPG   SGBP   Total 
   As of March 31, 2024 
   IFPG   SGBP   Total 
Long-lived assets, net               
United Kingdom  $4,899,114   $-   $4,899,114 
Australia   -    619,248    619,248 
Total Long-Lived Assets  $4,899,114   $619,248   $5,518,362 
                
Inventories, net               
United Kingdom  $810,889   $-   $810,889 
Australia   67,016    -    67,016 
Total Inventories  $877,905   $-   $877,905