INBS 10-K & 10-Q changes, risk factors and insider trading

Since our inception, we have engaged primarily in development activities. We have financed our operations primarily thoughthrough proceeds from public offerings and private placements of equity securities, existing trade and shareholder financing arrangements, and the incurrence of debt and have incurred losses since inception, including a net loss of $10,156,759$10,568,733 for the fiscal year ended June 30, 20242025 and a net loss of $10,568,733$12,430,975 for the fiscal year ended June 30, 2025.2026. We do not know whether or when we will become profitable.

We have limited experience of marketing and selling our products. We currently primarily rely on our direct sales force to sell our products in targeted geographic regions and distributors in certain regions including the United Kingdom, and any failure to maintain and grow our direct sales force will negatively affect our business, financial condition and results of operations. The members of our direct sales force are highly trained and possess substantial technical expertise, which we believe is critical in increasing adoption of our products. The members of our U.K. sales force are at-will employees. The loss of these personnel to competitors, or otherwise, will negatively affect our business, financial condition and results of operations. If we are unable to retain our direct sales force personnel or replace them with individuals of equivalent technical expertise and qualifications, or if we are unable to successfully install such technical expertise in replacement personnel, it may negatively affect our business, financial condition and results of operations.

Changes to U.S. tax laws under the One Big Beautiful Bill Act and potentialexisting and future changes to tariff policies could adversely affect our financial condition and results of operations.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law, introducing significant amendments to U.S. tax laws, with various provisions taking effect on different dates. Key provisions includeincluded changes to bonus depreciation, the treatment of research and development expenditures, interest expense deductibility, and revisions to international tax regimes. Although certain changes may reduce our tax liabilities, others could increase our effective tax rate, impact the timing of our deductions, or alter the value of our deferred tax assets and liabilities. In addition, changes to to U.S. trade policy — including the imposition of new tariffs, increases in existing tariffs, or retaliatory measures by other countries countries — could increase the costs of our raw materials, components, or finished goods, or reduce demand for our products. Such measures measures could also create volatility in global supply chains, disrupt our sourcing strategies, and adversely affect our competitiveness. The overall effect of the OBBBA and potential changes to tariff policies on our business and financial results will depend on the interpretation of of the legislation, future regulatory or trade policy actions, and potential changes in our operations or tax profile. We are continuing to evaluate these risks, and there can be no assurance that their implementation will not materially and adversely affect our financial condition, results of operations, or cash flows.

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 described in this Annual Report on Form 10-K.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 United States,U.S., Mexico and Canada.

We understand that following the the appointmentcommencement of athe liquidatorliquidation toof LSBD on July 21, 2023, the LSBD IP we licensed from LSBD, which includes the Biosensor IPIP, has reverted back to the University of Newcastle. Following our ongoing discussions with the University,University of Newcastle, it is the Company’sour understanding that the University of Newcastle cannot finalize licensing of the Biosensor IP until the liquidationliquidation, by virtue of the status of LSBD being under external administration, is complete.completed. As of the date of this Annual Report on Form 10-K 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 the completion ofwhen LSBD’s liquidation will be complete or when LSBD’s status will ischange, unknown,and theaccordingly, Companywe doesdo 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.

Our products and operations are subject to extensive government regulation and oversight both in the United States and abroad. If we fail fail to obtain and maintain necessary regulatory approvals for our current IFP products, or if approvals for future products and indications are delayed or not issued, it will negatively affect our business, financial condition and results of operations.

Our research, development and manufacturing operations including product assembly line at Cambridge, UK involve the use of hazardous substances, and we are subject to a variety of foreign environmental laws and regulations relating to the storage, use, handling, generation, manufacture, treatment, discharge and disposal of hazardous substances. Our products may also contain hazardous substances, and they are subject laws and regulations relating to labelling requirements and to their sale, collection, recycling, treatment, storage and disposal. Compliance with these laws and regulations may be expensive and noncompliance could result in substantial fines and penalties. Environmental laws and regulations also impose liability for the remediation of releases of hazardous substances into the environment and for personal injuries resulting from exposure to hazardous substances, and they can give rise to substantial remediation costs and to third-party claims, including for property damage and personal injury. Liability under environmental laws and regulations can be joint and several and without regard to fault or negligence, and they tend to become more stringent over time, imposing greater compliance costs and increased risks and penalties associated with violations. We cannot assure you that violations of these laws and regulations, or releases of or exposure to hazardous substances, will not occur in the future or have not occurred in the past, including as a result of human error, accidents, equipment failure or other causes. The costs of complying with environmental laws and regulations, and liabilities that may be imposed for violating them, or for remediation obligations or responding to third-party claims, could negatively affect our business, financial condition and results of operations.

A substantial portion of our revenues and costs may be denominated in foreign currencies, such as the British Pound,Pound or Australian Dollar or Japanese Yen.Dollar. Any significant change in value of these foreign currencies against the U.S. dollar may materially affect our cash flows, net revenues, earnings and financial position, and the value of, and any dividends payable on, our common stock in U.S. dollars. For example, an appreciation of any such foreign currency against the U.S. dollar would make any new investments or expenditures denominated denominated in the foreign currency costlier to us, to the extent that we need to convert U.S. dollars into the foreign currency for such purposes. Conversely, a significant depreciation of any such foreign currency against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our common stock. If we decide to convert any such foreign currency into U.S. dollars for the purpose of making payments for dividends on our common stock, strategic acquisitions or investments or other business purposes, appreciation of the U.S. dollar against the foreign currency would have a negative effect on the U.S. dollar amount available to us. We do not expect to hedge against the risks associated with fluctuations in exchange rates and, therefore, exchange rate fluctuations could have an adverse impact on our future operating results. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

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 $2,172,108$1,252,842 remains payable to the Australian Government, which is disclosed under liabilities in the balance sheet as of June 30, 2025,2026, as “Accounts payable and accrued expenses”. The termsremaining ofamount repaymentsis havepayable notin been9 finalizedequal asmonthly ofinstallments. June 30, 2025. Should the Australian government require the payment upfront or the repayment terms are not favorable to the Company,If the Company is unable to obtain sufficient financing or otherwise raise adequate funds, it may not be ableunable to make required payments when due. Any failure to timely repay such obligations could result in defaults, the liabilityacceleration onof time.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.

We are obligated to develop and maintain a system of effective internal control over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or theseOur internal controls may not be determined to be effective, which may harm investor confidence in our company and, as a result, the value of our common stock.

As a public company, and particularly afternow that we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of the Nasdaq Capital Market and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. Furthermore, new or changing laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs. Moreover, our executive officers have little experience in operating a United States public company, which makes our ability to comply with applicable laws, rules and regulations uncertain. Our failure to companycomply with all laws, rules and regulations applicable to United States public companies could subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and stock price.

The success of theintegrating acquisition of IFP willacquired businesses depend on, among other things, the combined Company’s ability to realize these anticipated benefits from combining the businesses of INBS and IFP.the acquired company. The combined company may fail to realize the anticipated benefits of the acquisition for for a variety of reasons, including the following:

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 and was renamed to Intelligent Bio Solutions (APAC) Pty Ltd on January 6, 2023.Australia. On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales. The Company’sOur headquarters are in New York,York New York.City.

Contribution margin, which is a non-GAAP measure of ourefficiency financialrelating to performance,direct increasedvariable bycosts $34,718such as materials and consumables This grew to $2,129,281 from $2,094,563 for the year ended June 30, 2025,73.36% compared to same69.75% periodthe prior year (being an extra $962,813 for inthe 2024.year). TheThis contributionis margina result of improved bystrategic approximatelymanufacturing 2.44%partnership for IFP Readers, production efficiency, better pricing of input costs due to improvedbetter production efficiencyvolumes and sales mix, as the sales of high margin cartridges continue to increase as a proportion of the total revenue.

Government support income in the United Kingdom and Australia geographic segments increaseddecreased by $392,125$139,125 to $816,901$677,776 from $424,776$816,901 for the year ended June 30, 2025,2026, compared to same period in 2024.2025. This increasedecrease was primarily attributable to changes in U.K. R&D tax credit legislation, reducing the Company’sbenefit investmentfrom 14.5% to 10% of eligible R&D expenditures, as well as a reduction in qualifying R&D researchactivities andundertaken developmentin expenditures forAustralia researchcompared andto developmentthe prior year. The government subsidiessupport andincome unwindingdecreased despite a substantial increase in the R&D expenses as this is mostly driven by the legislation of the grantsubsidiary incomecompany inwhere the fourthexpense fiscalis quarter of FY 2024-25 upon the completion of the grant acquittal audit.incurred.

Selling, general and administrative expenses decreasedincreased by $374,579$1,583,693 to $8,883,917 $10,502,161 from $9,258,496$8,918,468 for the year ended June 30, 2025,2026, compared to the same period in 2024. This decrease is primarily due to a decrease in legal, insurance, and general overhead costs offset by an increase in advertising, marketing and travel costs.2025.

Development and regulatory approval expenses increased by $722,707$974,779 to $2,396,513$3,371,292 from $1,673,806$2,396,513 for the year ended June 30, 2025,2026, compared to the same period in 2024.2025. This increase is primarily drivenattributable to the amounts spent on in-house R&D staff and timing of R&D work performed by the increasedresearch expenditurepartners. onDuring R&Dthe year activitiesended asJune 30, 2026, the Company undertookhad partnered with Cliantha Research to perform a cutoff assessment for codeine in fingerprint sweat and with CenExel Clinical Research, Inc. to conduct multiple clinical trialsstudies andacross filedmultiple forsites, as part of the Company’s FDA 510 (k) clearance. submission.

Depreciation and amortization increaseddecreased by $6,601$44,028 to $1,207,875$1,163,847 from $1,201,274$1,207,875 for the year ended June 30, 2025,2026, compared to same period in 2024.2025. ThisThe increasedecrease iswas mainlyprimarily dueattributable to the fluctuation in the foreign exchange rate for conversioncompletion of the accountamortization of balances.customer relationship (intangible assets) in September 2025 resulting in no remaining carrying value for amortization during the year ended June 30, 2026, partially offset by an amortization of software costs.

The Impairment impairment of long-lived assets increased by $220,062$78,493 to $220,062$298,555 from $0$220,062 for the year ended June 30, 2025,2026, compared to the same period in 2024. 2025. The increase is mainly due to the impairment of construction in progress (CIP)assets assets. Refer to Note 7 of financial reportsheld for details.sale.

Interest expense decreased by $106,250$15,603 to $60,890$10,736 from $167,140$26,339 for the year ended June 30, 2025,2026, as compared to the same period in 2024.2025. ThisThe decrease was wasprimarily attributable to the reductionsettlement of the interest recorded for leased assets and notes payable as the leases are nearing its termination date.payable.

Realized foreign exchange gain (loss)

Realized foreign exchange lossgain decreasedincreased by $267$40,731 to a gain of $39,820 from a loss of $911 fromfor $1,178 for the year ended June 30, 2025,2026, compared to the same period in 2024.2025. This decreaseincrease was largelyprimarily attributable to favorable favorableforeign currency exchange rates whilerate settlingduring the settlement of the notes payable and other transactions in currencies other than its functional currencies.

Unrealized foreign currency translation gain increaseddecreased by $521,788$602,912 to a gain of $384,670 from a loss of $137,118$218,242 for the year ended June 30, 2025,2026, compared to a gain of $384,670 the same period in 2024.2025. ThisIt is due to the favorable exchange rate calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency.currency

Since our inception, we have financed our operations primarily though through proceeds from public offerings and private placements of equity securities, warrant inducement transactions, existing trade and shareholder financing financing arrangements, and the incurrence of debt. As of June 30, 2025,2026, we had $1,019,909$3,992,312 in cash and cash equivalents and working capital deficit of $1,212,419.$2,168,312. Working capital is calculated current assets less current liabilities.

The Company expects that its cash and cash equivalents as of June 30, 2025,2026, 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 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 consolidated financial statements are issued. Accordingly, the Company will be required to raise additional funds during the next 12 months. For more information regarding the repayment of a grant the Company received from the Australian Government, see “Item 1A. Risk Factors - The Company may not be able to repay the grant it received from the Australian Government on time.”

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.

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 DecemberMarch 31, 2025,2026, of $740,371$6,862,204 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 DecemberMarch 31, 2025. 2026. 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.

These same risks apply to the Company’s licensing of intellectual property from LSBD related to the Company’s COV2 ProductsProducts, described in this prospectus, which includes a biosensor strip for antibodies against SARS-CoV-2.

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$1,513,290 remains payable to the Australian Government, which is disclosed under liabilities in the balance sheet as of DecemberMarch 31, 2025, 2026, as “Accounts payable and accrued expenses”. The Companyremaining hasamount finalizedis thepayable termsin of11 repaymentsequal asmonthly of September 30, 2025.instalments. 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.

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 DecemberMarch 31, 2025,2026, included elsewhere in this Quarterly Report on Form 10-Q.

Major highlights and achievements for the three months ended DecemberMarch 31, 20252026:

Comparison of the Three and SixNine Months Ended DecemberMarch 31, 20252026 and 20242025

Strong growth in revenue has continued for the quarter. Revenue from sales of goods increased by $289,280$331,935 to $896,774$1,060,802 (representing approximately a 46% increase) for the three months ended DecemberMarch 31, 2025,2026, from $607,494$728,867 for the three months ended December March 31, 2024.2025. This increase is mainly due to the addition of 1733 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$860,725 to $2,008,571$3,069,373 (representing approximately a 39% increase) for the sixnine months ended December March 31, 2025,2026, from $1,479,781$2,208,648 for the sixnine months ended December March 31, 2024.2025. This increase is mainly due to the addition of 4982 new customers. We expect this trend to continue as we expand into new markets in the future.

Cost of revenue increased by $120,674$137,922 to $1,030,541$525,421 for the sixthree months ended DecemberMarch 31, 2025,2026, from $909,867$387,499 for the sixthree months ended December March 31, 2024. 2025. The increase in cost of revenue being a direct variable cost is mainly due to an increase in revenue discussed above, increase in direct labor cost due to annual salary revision for direct manufacturing labor during the fourth quarter of fiscal 2025.2025, write down of inventory of $37,311 related to finished goods due to obsolescence and a provision for warranty replacement of $29,355.

Gross profit increased by $408,116$194,013 to $978,030$535,381 for the sixthree months ended March 31, 2026, from $341,368 for the three months ended DecemberMarch 31, 2025, compared to $569,914 for the six months ended December 31, 2024.2025. Gross margin increased to 48.69%50.47% from 38.51%46.84% in the prior-year period.

Contribution margin, which is a non-GAAP measure of our financial performance, increased by $473,016$256,921 to $1,469,657$790,324 for the sixthree months ended DecemberMarch 31, 2025, 2026, from $996,641$533,403 for the sixthree months ended DecemberMarch 31, 2024. 2025. The contribution margin improved by approximately 5.821.32 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.

Government support income decreased by $60,920$7,576 to $72,720 $165,695 for the three months ended DecemberMarch 31, 2025,2026, from $133,640$173,271 for the three months ended December March 31, 2024.2025. 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 increaseddecreased by $6,219$1,357 to $265,987 $431,682 for the sixnine months ended DecemberMarch 31, 2025,2026, from $259,768$433,039 for the six nine months ended December March 31, 2024.2025. TheThis increasedecrease was primarily drivenattributable byto higher qualifying research and development expenditures eligible for reimbursement under government support programschanges in Australia offset by the reduction in the U.K. R&D tax credit ratelegislation, reducing the benefit from 14.5% to 10% of eligible R&D expenditures.

Selling, general and administrative expenses increased from $1,809,114 $2,414,639 to $2,337,041$2,458,605 (being an increase of $527,927$43,966) for the three months ended December March 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024, 2025, and from $3,758,130$6,195,490 to $4,996,865$7,512,388 (being an increase of $1,238,735$1,316,898) for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 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:2025.

Marketing: $522,325 expenses were $635,868 for the 3three months ended ending DecemberMarch 31, 2025,2026, compared to $229,485$1,094,658 for the same period last year and $1,132,259$1,768,127 for the 6 nine months endingended DecemberMarch 31, 2025,2026, compared to $391,554$1,486,212 for the same period last year. Marketing expenditure has increased forduring this periodthe nine months ended March 31, 2026 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.raising.

Legal Expenses: $162,019expenses were $93,588 for the 3three months ending December March 31, 2025,2026, compared to $80,171$58,443 for the same period last year and $356,288$449,876 for the 6 nine months ending DecemberMarch 31, 2025,2026, compared to $183,761 $252,669 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 SplitSplit, general corporate expenses and administrative legal costs associated with raising of capital.

Development and regulatory approval expenses decreased increased by $447,414$535,628 to $1,008,282$893,979 for the sixthree months ended DecemberMarch 31, 2025,2026, from $1,455,696$358,351 for the six three months ended DecemberMarch 31, 2024.2025. This decrease increase is primarily attributable to thehigher amounts spent on in-house R&D staff and timing of R&D engagementwork ofperformed by the research partner for R&D.partners. During the sixthree months ended December March 31, 2024,2026, the Company had partnered with CenExelCliantha Research to perform a methodcutoff comparisonassessment clinicalfor studycodeine in fingerprint sweat 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.period.

Depreciation and amortization decreased by $23,281 $11,585 to $281,896$290,393 for the three months ended DecemberMarch 31, 20252026, from $305,177$301,978 for the three months ended December March 31, 2024.2025. 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 DecemberMarch 31, 2025,2026, partially offset offset by an amortization of software costs.

Depreciation and amortization decreased by $20,325 $31,910 to $585,274$875,667 for the sixnine months ended DecemberMarch 31, 20252026, from $605,599$907,577 for the sixnine months ended December March 31, 2024.2025. 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 DecemberMarch 31, 2025,2026, partially offset offset by an amortization of software costs.

The impairment of long-lived assets increased by $27,147$5,200 to $27,147$5,200 for the three months ended DecemberMarch 31, 2025,2026, from $0 for the three months ended DecemberMarch 31, 2024.2025. The increase is mainlyprimarily due to an adverse foreign exchange effects arising from the translation of account balance movements at average exchange rates for the period, which impacts the impairment of construction in progress assets classified as held for sale.

The impairment of long-lived assets increased by $288,927$294,127 to $288,927$294,127 for the sixnine months ended DecemberMarch 31, 2025,2026, from $0 for the sixnine months ended ended DecemberMarch 31, 2024.2025. The increase is mainly due to the impairment of construction in progress assets held for sale.

Interest expense increaseddecreased by $24,283 $3,678 to $60,112$4,241 for the sixthree months ended December March 31, 20252026, from $35,829$7,919 for the sixthree months ended DecemberMarch 31, 2024.2025. The increasedecrease was primarily attributable to higher interest expense recognized on lease liabilities related to new lease agreements for the Company’ssettlement U.K. and Australian offices, as well as interest onof notes payable.

Interest income decreasedincreased by $16,603$31,757 to $5,334 for the three months ended December 31, 2025, from $21,937$49,444 for the three months ended DecemberMarch 31, 2024.2026, from $17,687 for the three months ended March 31, 2025. This decreaseincrease was dueattributable to the spending of funds received from capital raising activities, which decreasescontributed to the balance on which interest was earned.

Interest income decreased by $60,939$29,182 to $13,838$63,282 for the sixnine months ended DecemberMarch 31, 2025,2026, from $74,777$92,464 for the sixnine months ended DecemberMarch 31, 2024. 2025. This decrease was due to the spending of funds received from capital raising activities, which decreases the balance on which interest was earned.

Since our inception, we have financed our operations primarily thoughthrough 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 DecemberMarch 31, 2026, 2025, we had $740,371$6,862,204 in cash and cash equivalents and working capital of $7,047,443.$5,138,618.

At-the-Market 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 Supplement (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 second 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.Stock pursuant to the ATM Agreement. Prior to the expiration of our “shelf” registration statement on on Form S-3 (File No. 333-264218), which became effective on April 20, 2022 (“2022 Shelf”), any sale of shares pursuant to the 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 Supplement”), as supplemented byand the 2025 March ATM Supplement. On September 18,April 11, 2025, the Company filed a new “shelf” registration statement on Form S-3 (File No. 333-286489), which became effective on September 10, 2025 (“2025 Shelf”), and subsequently filed prospectus supplement toon theSeptember 18, 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 underpursuant to the ATM Agreement. SinceOn March 23, 2026, the Company filed a second prospectus supplement (the “2026 March ATM Supplement”) to the 2025 Shelf in connection with the offer, sale, and issuance of up to $3,966,316 of shares of Common Stock pursuant to the ATM Agreement. Following the expiration of of the 2022 Shelf, allany salessale of shares underpursuant to the ATM Agreement have beenwere made pursuant tounder the Company’s 2025 Shelf,Shelf includingand the relatedincluded base prospectus, and under the related 2025 September ATM Supplement and the 2026 March ATM Supplement.

During the period between September 18, 2024, through December 31, 2025, theThe 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 Agreement. Duringduring the three monthsperiod endedbetween DecemberSeptember 18, 2024, through March 31, 2025,2026. theThe Company raiseddid approximatelynot $1,159,483sell (net of commissions of approximately $35,872 paid to Ladenburg) through the sale and issuance of 192,071any shares (after adjustment for the 2025 Reverse Stock Split) of Company common stock pursuant to the ATM Agreement.Agreement during the three months ended March 31, 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$1,513,290 remains payable to the Australian Government, which is disclosed under liabilities in the balance sheet as of DecemberMarch 31, 2025,2026, as “Accounts payable and accrued expenses”. The remaining Companyamount hasis finalizedpayable thein terms11 ofequal repaymentsmonthly as of September 30, 2025.instalments. 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 andas subscription receivable from the investors in the December Private Placement as of DecemberMarch 31, 2025,2026, 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.

As of DecemberMarch 31, 20252026 we did not have any off-balance sheet arrangements.