What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-08-23 compared with 2022-09-22 · 429 added, 296 removed, 1 unchanged (100% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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

We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A.

“Risk Factors”

and “Cautionary Note Regarding Forward-Looking Statements” included at the beginning of this Annual Report on Form 10-K.

caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.

These statements are based upon information available to us as of the date of this report, and while we believe such information forms

a reasonable basis for such.

We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly

update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any

such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking

We are a biosensor diagnostic technology company operating across the Asia-Pacific Region (“APAC”) Region and an interest

in the North America region with the biosensor platform comprising of biochemistry, immunology, tumor markers, hormones, and nucleic acid

diagnostic modalities, and worldwide with our COV2 test.

We were incorporated under the laws of Delaware on December 5, 2016.

Our headquarters

are located in New York, New York.

Our headquarter is in New York.

We were formed to provide a non-invasive,

pain free innovation to make it easier for people to manage diabetes using the Company’s Saliva Glucose Biosensor (“SGB”

and, together with the software app that interfaces the SGB with the Company’s digital information system, the “SGT”)

Science Biosensor Diagnostics Pty Ltd (“LSBD” or Licensor) is an Australian company that owns the worldwide intellectual

property rights to the biosensor platform from University of Newcastle, Australia.

LSBD has licensed to us that technology for us to

introduce and launch the platform in the APAC Region.

We will commence this process with the SGT.

objective is to introduce and launch SGB, our diagnostic tests that stem from the Biosensor Platform that we license, in the APAC Region.

In the next four years we intend on developing the platform to its full capacity testing across the following diagnostic modalities:

immunology, hormones, chemistry, tumor markers and nucleic acid tests.

believe that the COVID-19 pandemic is likely to remain with us for many years.

Development of an improved antibody assays to detect prior

infection with SARS-CoV-2 has been identified as one of the top unmet needs in the ongoing COVID-19 pandemic response.

Precise knowledge

of SARS-CoV-2 infection at the individual level can potentially inform clinical decision-making, whereas at the population level, precise

knowledge of prior infection, immunity, and attack rates (particularly asymptomatic infection) is needed to prioritize risk management

decision-making about social distancing, treatments, and vaccination.

If saliva can support measurements of both the presence of SARS-CoV-2

RNA26-28 as well as antibodies against SARS-CoV-2, this sample type could provide an important opportunity to monitor individual and

population-level SARS-CoV-2 transmission, infection, and immunity dynamics over place and time.

anticipate there to be 3 different applications for the foreseeable future:

Screening - SARS-CoV-2 antibody testing is urgently needed to estimate the incidence and prevalence of SARS-CoV-2 infection at the

general population level.

Precise knowledge of population immunity could allow government bodies to make informed decisions about

how and when to relax stay-at-home directives and to reopen the economy.

– The COV2 Biosensor test can be used as a complement to the (RNA) virus detection tests for patients presenting late after

symptoms onset to healthcare facilities and where virus detection tests are negative despite strong indications of infection.

addition, they can potentially be used for informing the decision on discharge of patients who recovered from SARS-CoV-2 infection

but remain RNA-positive by RT-PCR for a long time after symptoms have subsided.

The degree of protective immunity conferred by or

correlated with the antibodies detected in subjects with past SARS-CoV-2 infection is still under investigation.

Once this is clarified,

the SARS-CoV-2 antibody tests could be, together with the (RNA) direct virus detection, an essential tool in de-escalation strategies.

Currently antibody tests are used for sero-epidemiological surveys and studies.

vaccination screening - To assess the degree of the elicited potent antigen-specific antibody responses, to COVID-19 vaccines when

developed and administered to humans.

on a recent paper publicly available and authored by the team at Johns Hopkins Department of Environmental Health and Engineering, Bloomberg

School of Public Health, results indicate it is feasible to accurately measure the salivary IgG response to identify individuals with

a prior SARS-CoV-2 infection.

A saliva-based approach could serve as a non-invasive approach for accurate and large-scale SARS-CoV-2

“sero”-surveillance.

saliva antibody test can greatly increase the scale of testing—particularly among susceptible populations—compared to blood

and could clarify population immunity and susceptibility to SARS-CoV-2.

The team at John Hopkins further demonstrated in the laboratory

that when saliva was collected ≥10 days post symptom onset, the anti-SARS-CoV-2 IgG assay detects SARS-CoV-2 infection with 100% sensitivity

and 99% specificity.

In addition, the team demonstrated that the temporal kinetics of SARS CoV-2-specific IgG responses in saliva are

consistent with those observed in serum and indicate that most individuals seroconvert approximately 10 days after COVID-19 symptom onset

or approximately two weeks post-presumed infection.

utilizing the biosensor platform for detecting SARS-CoV-2 we expect to have lower detection limits, improve on sensitivity and specificity

characteristics of current diagnostic methods, be able to provide real time results at the point of care and provide quantitative results

as opposed to negative or positive which is how other POCT report the results.

and scalable point-of-care (POC) tests for the diagnosis of COVID-19 would increase the scope for diagnosis to be made in the community

and outside the laboratory setting They would have the potential to reduce the time to obtaining an actionable result, could support

early identification of those with COVID-19 and could also support appropriate use of isolation resources, infection control measures,

and recruitment into clinical trials of treatments.

are progressing with the milestone of integrating Harvard University’s technology with our biosensor applications for SARS-Cov-2

antibody test for COVID-19 by entering on January 5, 2021, into a Research Collaboration Agreement with Harvard College for the purposes

of facilitating mutual collaboration in scientific research in connection with the Company’s non-exclusive royalty free license

to combat COVID-19 coronavirus.

The contemplated collaboration includes research teams from the Company and Harvard and will include,

among others, exchange of materials and research data.

Company has not generated any revenues to date.

As such, the Company is subject to all of the risks associated with emerging growth companies.

Since inception, the Company has incurred losses and negative cash flows from operating activities.

The Company does not expect to generate

positive cash flows from operating activities in the near future until such time, if at all, the Company completes the development process

of its products, including regulatory approvals, and thereafter, begins to commercialize and achieve substantial acceptance in the marketplace

for the first of a series of products in its medical device portfolio.

June 16, 2022, the Company executed an agreement with Intelligent Fingerprinting Limited (“IFP”),

providing the Company with the exclusive right until December 31, 2022 (subject to IFP’s right to terminate the agreement early

after August 31, 2022), to evaluate and negotiate a transaction to acquire IFP or its assets (or a similar transaction).

In consideration

for this exclusivity, on June 16, 2022, the Company entered into a Bridge Facility Agreement with IFP (the “Bridge Facility Agreement”)

through which the Company has provided IFP with an unsecured term loan facility in the amount of $500,000 (the “Loan”),

which amount is payable on the earliest of the consummation of an acquisition, 30 days following the termination of exclusivity under

the exclusivity agreement, an event of default under the Bridge Facility Agreement, or December 31, 2022.

The Loan contains customary

representations and warranties by IFP and bears interest at two percent per annum (or four percent per annum in the event the Loan is

not repaid in full when due) above the Sterling Barclays Bank Base Rate from time to time.

completion of the initial public offering in December 2020, Series A and Series B warrants held by certain shareholders were exercised.

Each warrant is convertible into 1 share of the Company’s common stock.

A total of 59,800 Series A warrants and 1,408,777 Series

B warrants were exercised and converted into common stock.

In addition to this, a total of 1,300,000 Series B Convertible Preferred Stock

was converted into common stock.

Each share of Series B Convertible Preferred Stock is convertible into 1 share of the Company’s

common stock as described in the Company’s Registration Statement on Form S-1, File No.

333-242277 with the U.S.

Securities and

Exchange Commission .

Point-of-Care

Test Commercialization Ecosystem Established

approval from the Harvard Longwood campus Institutional Review Board (IRB) to commence a study to test clinical samples from a COVID-19

repository and to commence clinical studies on the COVID-19 Antibody Biosensor;

and aligned with word-class institutions, Johns Hopkins University, The Wyss Institute for Biologically Inspired Engineering, and

the University of Newcastle for the development of saliva-based POCTs for both glucose monitoring and COVID-19 antibody detection;

new top-tier members to GBS’s scientific team to formulate and execute its commercialization plan.

Key Developments

research protocols with The Wyss Institute for Biologically Inspired Engineering to progress with the milestone of integrating this

technology with the Company’s Biosensor for SARS-Cov-2 antibody tests;

study for the salivary collection protocol with Johns Hopkins University, Bloomberg School of Public Health;

technical optimization of the Wyss’s eRapid assay performance in relation to SARS-Cov-2 antibody detection at The Wyss Institute

to align with the fastest antibody tests currently on market using clinical samples.

Key Developments

a clinical plan for regulatory submission and subsequent approval with Precision Medicine Architects, LLC;

a clinical study for oral fluid (including saliva) and blood collection with the Diabetes

Research Institute at Mills-Peninsula Medical Center;

with Johns Hopkins Hospital in the development of a traceable reference method for glucose in saliva and blood;

global voice of customer survey with Precision Medicine Architects, LLC as part of the process to finalize product development of

the device and usability;

development of prototyping for middleware and smart phone application;

option agreement to acquire the rights to use, make, market, sell and offer to sell Products under the Intellectual Property Rights

in the Glucose Field in the North American market for the Saliva Glucose Biosensor.

public offering & share structure

December 28, 2020, the Company closed its initial public offering (“IPO”) and sold 1,270,589 units, consisting of (a) one

share of the Company’s common stock (or, at the purchaser’s election, one share of Series B Convertible Preferred Stock),

(b) one Series A warrant (the “Series A Warrants”) to purchase one share of the Company’s common stock at an exercise

price equal to $8.50 per share, exercisable until the fifth anniversary of the issuance date, and (c) one Series B warrant (the “Series

B Warrants”) to purchase one share of the Company’s common stock at an exercise price equal to $17.00 per share, exercisable

until the fifth anniversary of the issuance date and subject to certain adjustment and cashless exercise provisions.

The public offering

price of the shares sold in the IPO was $17.00 per unit.

In aggregate, the units issued in the offering generated $17,732,448 in net

proceeds, which amount is net of $1,714,001 in underwriters’ discount and commissions, and $2,153,564 in offering costs.

also issued to the underwriter an option, exercisable one or more times in whole or in part, to purchase up to 190,588 additional shares

of common stock and/or Series A Warrants to purchase up to an aggregate of 190,588 shares of common stock and/or Series B Warrants to

purchase up to an aggregate of 190,588 shares of common stock, in any combinations thereof, from us at the public offering price per

security, less the underwriting discounts and commissions, for 45 days after the date of the IPO to cover over-allotments, if any (the

“Over-Allotment Option”).

the closing of the IPO, all shares of preferred stock then outstanding were automatically converted into 2,810,190 shares of common stock,

and all convertible notes then outstanding were automatically converted into 710,548 shares of common stock.

preferred shareholders were issued warrants that, following the Company’s completed IPO, allow the holder to acquire 2,736,675

shares of common stock at the IPO price during years two through three following the IPO.

At the exercise date, the shareholder must

hold for each warrant to be exercised, one underlying common share to exercise the option.

The warrants are not transferable and apply

to the number of shares that were subscribed for.

the share structure as of September 21, 2022 was as follows:

of Issued Common Stock

of Series A warrants exercisable at $8.50

of Series B warrants exercisable at $0 (subject to a cashless exercise provision)

of Warrants issued to the underwriter exercisable at $18.70

of the Pre-IPO Warrants exercisable at $8.50 (during year two through year three after the IPO)

Warrants issued to LSBD exercisable at $17.00

of Operations:

of the Years Ended June 30, 2022 and 2021

support income

support income decreased by $1,543,338 to $437,146 from $1,980,484 for the year ended June 30, 2022 compared to same period in 2021.

This decrease was primarily attributable to GBS’s subsidiary companies receiving COVID-19 related government support in the

previous financial year which was discontinued in April 2021 and qualifying research & development expenditure for research & development government subsidies.

grant support income is primarily attributable to GBS’s subsidiary companies recognizing R&D tax refund as the Company

believes that it is probable that the certain amount will be recovered in full through a future claim (see note 3 on R&D tax refund).

and administrative expenses

and administrative expenses increased by $1,561,038 to $4,920,103 from $3,359,065 for the year ended June 30, 2022 compared to the same

period in 2021.

This increase was primarily driven by an increase in operational activities following completion of the IPO in December 2020.

the Company’s operating activities increase, we expect its general and administrative costs will include additional costs in overhead

contribution, consultancy, as well as an increase in employee related costs associated with a higher headcount.

and regulatory expenses

and regulatory expenses increased by $18,216 to $3,853,919 from $3,835,703 for the year ended June 30, 2022 compared to the same period

This increase is primarily driven by funding availability since completion of the IPO in December 2020 that has allowed the

Company to progress on its milestones as well as expensing of the prepaid R&D contribution of $2,600,000.

the Company’s operating activities increase, we expect its development and regulatory expenses to increase in future periods.

and capital raising expenses

and capital raising expenses decreased by $359,198 to zero from $359,198 for the year ended June 30, 2022 as compared to the same period

There were no capital raising activities in 2022.

income and expenses

expense decreased by $1,086,069 to $7,539 from $1,093,608 for the year ended June 30, 2022 as compared to the same period in 2021.

decrease was attributable to the non-cash recognition of a beneficial conversion feature associated with convertible notes in the last

period and no interest paid to convertible notes since the completion of the IPO last year due to their conversion into common stock.

Loss from unconsolidated equity method investment

from equity method investment decreased by $135,692 to zero from $135,692 for the year ended June 30, 2022 as compared to the same period

This decrease was mainly due to the reduction in the carrying amount of its investment in BiosensX (North America) Inc to zero

last fiscal year.

foreign exchange loss

foreign exchange loss decreased by $267,238 to $3,987 from $271,225 for the year ended June 30, 2022 compared to the same period in 2021.

This decrease in loss was largely attributable to the Company’s settled translations in currencies other than its functional currencies.

tax (expense) benefit

was no income tax expense for the year ended June 30, 2022 and 2021, respectively, as the Company has established a full valuation allowance

for all its deferred tax assets.

comprehensive income

currency translation gain/(loss)

foreign currency translation loss decreased by $170,434 to a loss of $126,875 from a loss of $297,309 for the year ended June 30, 2022

compared to the same period in 2021.

It is calculated based on the Company’s unsettled transactions in currencies other than its

functional currency.

loss attributable to GBS increased by $1,268,765 to $8,306,051 from $7,037,286 for the year ended June 30, 2022 compared to the same

period in 2021.

This increase in loss is primarily due to more government support income last fiscal year as a result of qualifying

research & development expenditure in that period and increase in general and

administration expenses due to expansion in operational activities in order to progress on its regulatory and development

and Capital Resources

use working capital and cash measures to evaluate the performance of our operations and our ability to meet our financial obligations.

We define Working Capital as current assets less current liabilities.

This measure should not be considered in isolation or as a substitute

for any standardized measure under GAAP.

This information is intended to provide investors with information about our liquidity.

companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

our inception, our operations have primarily been financed through the issuance of our common stock, redeemable convertible

preferred stock and the incurrence of debt.

As of June 30, 2022, we had $8,238,301 in cash and cash equivalents and $6,204,989 in

working capital.

“Initial public offering & share structure” herein for details about our IPO.

The Company expects that its cash and cash equivalents as of June 30, 2022, of $8.23 million, may be insufficient to allow the Company

to fund its current operating plan through at least the next twelve months from the issuance of these financial statements, taking into

the accounts the proposed acquisition of Intelligent Fingerprinting Limited (IFP).

Should revenue not be generated during this period

to cover expenses, then these conditions may raise substantial doubt about the Company’s ability to continue as a going concern

for a period of at least one year from the date these financial statements are issued.

It appears that the Company may be required to

raise additional funds during the next 12 months.

The company is currently evaluating potential raising additional funds through private

placements and or public equity financing.

However, there can be no assurance that, in the event that the Company requires additional

financing, such financing will be available on terms which are favorable to us, or at all.

do not anticipate generating any revenue in the near future, until such time, if at all, the Company completes the development process

of its products, including regulatory approvals, and thereafter, begins to commercialize and achieve substantial acceptance in the marketplace

for the first of a series of products in its medical device portfolio.

In addition, available resources may be consumed more rapidly

than currently anticipated, and there can be no assurance that we will be successful in developing the SGT and generating sufficient

revenue in the timeframe set forth above, or at all.

We may be unable to meet our targets for regulatory approval and market launch,

or we may be unable to generate anticipated amounts of revenue from sales of the system.

We may also need additional funding for developing

new products and services and for additional sales, marketing and promotional activities.

Should this occur, we may need to seek additional

capital earlier than anticipated.

the event we require additional capital, there can be no assurances that we will be able to raise such capital on acceptable terms, or

Failure to generate sufficient revenues or raise additional capital through debt or equity financings, or through collaboration

agreements, strategic alliances or marketing and distribution arrangements, could have a material adverse effect on our ability to meet

our long-term liquidity needs and achieve our intended long-term business plan.

Our failure to obtain such funding when needed could

create a negative impact on our stock price or could potentially lead to a reduction in our operations or the failure of our company.

Transition Period for “Emerging Growth Companies”

have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of

the JOBS Act.

This election allows us to delay the adoption of new or revised accounting standards that have different effective dates

for public and private companies until those standards apply to private companies.

As a result of this election, our financial statements

may not be comparable to companies that comply with public company effective dates.

Because our financial statements may not be comparable

to companies that comply with public company effective dates, investors may have difficulty evaluating or comparing our business, performance

or prospects in comparison to other public companies, which may have a negative impact on the value and liquidity of our common stock.

Accounting Estimates

preparation of our consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions

that impact the amounts reported in our consolidated financial statements and accompanying notes that are not readily apparent from other

The estimates and associated assumptions are based on historical experience and other factors that are considered relevant.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

In addition to historical information, this discussion

contains forward-looking statements based upon management’s current expectations that are subject to risks and uncertainties which

may cause our actual results to differ materially from plans and results discussed herein.

We encourage you to review the risks and uncertainties

discussed in the sections entitled Item 1A.

“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”

included at the beginning of this Annual Report on Form 10-K.

We caution readers not to place undue reliance

on any forward-looking statements made by us, which speak only as of the date they are made.

In addition, statements that “we believe”

and similar statements reflect our beliefs and opinions on the relevant subject.

These statements are based upon information available

to us as of the date of this report, and while we believe such information forms a reasonable basis for such.

We disclaim any obligation,

except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change

in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood

that actual results will differ from those set forth in the forward-looking statements.

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).

Our headquarters are in New York, New York.

We are a medical technology company

focused on developing and delivering non-invasive, rapid and pain free innovative testing and screening solutions.

We operate globally

with the objective of providing intelligent, pain-free, and accessible solutions that improve the quality of life.

Our current product portfolio includes:

Intelligent Fingerprinting Platform - Our proprietary portable platform analyzes fingerprint sweat using a one-time (recyclable) cartridge and portable handheld reader.

Our flagship product from this platform, which is commercially available in certain countries outside of the United States, is the Intelligent Fingerprinting Drug Screening System (the “IFP System” or “IFP Products”), a two-part system that consists of non-invasive, sweat-based fingerprint diagnostic testing products designed to detect drugs of abuse including opioids, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine.

The system comprises a small, tamper-evident drug screening cartridge onto which ten fingerprint sweat samples are collected in under a minute, before the portable analysis unit provides an on-screen result in under ten minutes.

Samples collected with our confirmatory kits can also be sent to a third-party laboratory service provider to perform confirmation testing.

Customers include safety-critical industries such as construction, transportation and logistics firms, manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and judicial organizations.

The Biosensor Platform – Our “Biosensor Platform” consists of a small, printable modified organic thin-film transistor strip that we license across the Asia Pacific Region from Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or “Licensor”).

The Biosensor Platform, which is designed to detect multiple biological analytes by substituting the Glucose Oxidase (“GOX”) enzyme with a suitable alternative for each analyte, is currently in the development stage.

Our flagship product candidate based on the Biosensor Platform technology is the Saliva Glucose Biosensor (“SGB” and, together with a software app that interfaces the SGB with the Company’s digital information system, the Saliva Glucose Test or “SGT”), a Point of Care Test (POCT) expected to complement the finger pricking invasive blood glucose monitoring test for diabetic patients.

Our products based on the SGT are referred to herein as the “SGT products.”

These platform technologies have the potential

to develop a range of POCT including the modalities of clinical chemistry, immunology, tumor markers, allergens, and endocrinology.

Highlights of Achievements

Our major highlights of achievements for

the fiscal year 2023:

On June 28, 2023, the Company announced it had received guidance from the United States Food and Drug Administration

(the “FDA”) regarding the regulatory classification of its Intelligent Fingerprinting Drug Screening Cartridge.

The FDA provisionally

determined that the cartridge falls within 21 CFR 862.3650, Opiate Test System, a Class II type device that requires the submission of

a pre-market notification 510(k) and the FDA’s clearance prior to marketing.

The preliminary assessment, in response to the

Company’s March 2023 513(g) request for product classification, provides a clear regulatory pathway for INBS as part of the Company’s

expansion strategy into the United States.

The Company intends to submit a 510(k) pre-market notification for its proprietary Intelligent

Fingerprinting Drug Screening Cartridge.

In June 2023, the Company concluded its study on the Correlation of Glucose and Cortisol between Oral Fluid and Blood Compartments.

The study aimed to determine the degree of correlation between saliva and blood glucose and cortisol levels in subjects with and without diabetes.

The results of the study indicate that saliva sampling and analysis has potential use in various applications, including as an aid in screening for diabetes in unhygienic environments where blood sampling is risky, and in point-of-care or at-home cortisol tests where characterizing early morning levels and daily variation is important.

The Company intends to compile a white paper summarizing the findings as it determines the next phase of development.

On May 2, 2023, the Company announced the recruitment of its Australian sales force and the addition of a new distribution

hub and office facility to manage sales and operations, significantly expanding its ability to service customers throughout the Asia Pacific

On March 15, 2023, the Company announced that it has selected Human and Supplement Testing Australia (“HASTA”), Australia’s largest independent sports drug testing laboratory, as its preferred drug testing specialist in Australia to complete lab-based confirmation testing.

On February 16, 2023, the Company announced that it has filed a 513(g) submission with the United States Food and Drug Administration (FDA) for its Intelligent Fingerprinting Drug Screening Cartridge.

The submission will allow Intelligent Bio Solutions to determine the most suitable FDA regulatory pathway as part of the Company’s strategy for expansion into the U.S.

On January 23, 2023, the Company published the results of Milestone 7, a phase of its biosensor platform development at the University of Newcastle, Australia, that included testing time-to-result (TTR), sensitivity, and reproducibility.

The results showed a record 4x improvement in TTR, enabling the biosensor to return test results in under one minute.

During the year, the Company continued to expand its customer base by entering into sales contracts

with Haulier, Eastern Airways, Hozelock, Boughey Distribution, A&F Sprinklers and Dodman Limited.

The Company completed the acquisition of Intelligent Fingerprinting Limited (IFP), a company registered in England and Wales and on October 4, 2022 (the IFP Acquisition).

IFP owns a portfolio of intellectual property for diagnostic tests and associated technologies including drug testing through the analysis of fingerprint sweat.

The acquisition of IFP has expanded the Company’s platform of rapid, non-invasive diagnostic testing technologies.

On July 13, 2022, INBS completed Institutional Review Board (IRB) approved clinical studies at the Diabetes Research Institute of Sutter Health’s Mills-Peninsula Medical Center (MPMC) in San Mateo, California.

The study design was intended to support the clinical development of its next-generation Saliva Glucose Biosensor.

A total of 40 adult subjects with type 2 diabetes were recruited for the study.

Nearly 1,400 samples of blood and oral fluids were collected and analyzed.

The subsequent statistical analysis of the correlation of glucose levels among these sample types will act as foundation for building a robust portfolio of prospective clinical evidence, forming the backbone for future regulatory submissions.

Results of Operations:

Comparison of the Years Ended June 30, 2023

Year Ended June 30,

Cost of revenue (exclusive of amortization shown separately below)

Other income:

Government support income

Operating expenses:

Selling, general and administrative expenses

Development and regulatory approval expenses

Depreciation and amortization

Goodwill impairment

Total operating expenses

(13,659,529 )

Loss from operations

(12,595,233 )

Other income (expense):

Interest expense

Realized foreign exchange loss

Fair value gain on revaluation of financial instruments

Interest income

Total other income

(10,664,555 )

Net loss attributable to non-controlling interest

Net loss attributable to Intelligent Bio Solutions Inc.

$ (10,631,720 )

$ (8,306,051 )

Other comprehensive income (loss), net of tax:

Foreign currency translation income (loss)

Total other comprehensive income (loss)

Comprehensive loss

(10,451,916 )

Comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to Intelligent Bio Solutions Inc.

$ (10,419,081 )

$ (8,432,926 )

Net loss per share, basic and diluted*

Weighted average shares outstanding, basic and diluted*

* Common Shares and per share amount have been retroactively adjusted

to reflect the decreased number of shares resulting from a 1 for 20 reverse stock split, throughout this Annual Report on Form 10-K,

unless otherwise stated.

Results of Operations:

Comparison of the Years Ended June 30, 2023, and 2022

Sales of goods

Revenue from sales of goods increased by $1,256,872

to $1,256,872 from $0 for the year ended June 30, 2023, compared to same period in 2022.

This is due to the acquisition of IFP in October

2022, whose results of operations are consolidated and launch of fingerprint drug testing in APAC region via Intelligent Bio Solutions (APAC) Pty Ltd.

The acquisition provided the Company with access to commercially available Fingerprinting drug testing system which

is currently being marketed in Europe and Asia Pacific Region.

Revenue from the IFPG segment relates to the sale

of readers, cartridges and accessories and is summarized as follows:

Year Ended June 30,

Sales of goods - cartridges

Sales of goods - readers

Total revenue

Cost of revenue

Cost of revenue increased by $930,204 to $930,204

from $0 for the year ended June 30, 2023, compared to same period in 2022.

Cost of revenue relates to the direct labor, direct material

costs and direct overhead costs incurred in the production of the goods.

Gross profit increased by $326,668 to $326,668 from

$0 for the year ended June 30, 2023, compared to same period in 2022.

This is due to the acquisition of IFP in October 2022.

The gross profit is primarily attributable to the

IFPG segment.

Government support income

Government support income increased by $300,482

to $737,628 from $437,146 for the year ended June 30, 2023, compared to same period in 2022.

This increase was primarily attributable

to qualifying research and development expenditures incurred during the current period including the completion of Milestone 7, a phase

of its biosensor platform development at the University of Newcastle, Australia.

The grant support income is primarily

attributable to INBS’s subsidiary companies recognizing an R&D tax refund as the Company believes that it is probable that

the certain amount will be recovered in full through a future claim (see Note 3 to our consolidated financial statements appearing

elsewhere in our Annual Report on Form 10-K for further information and disclosures relating R&D tax refund).

Operating expenses

Selling, general and administrative expenses

increased by $3,106,600 to $8,026,703 from $4,920,103 for the year ended June 30, 2023, compared to the same period in 2022.

is largely due to the acquisition of IFP which added approximately 32 staff to our FTE headcount, and the results of operations of

IFP which are consolidated in the current period from the date of acquisition.

As the Company’s operating activities increase,

we expect its selling, general and administrative costs will include additional costs in overhead contribution, consultancy, as well as

an increase in employee related costs associated with a higher headcount.

Development and regulatory expenses

Development and regulatory expenses decreased by $3,346,495

to $507,424 from $3,853,919 for the year ended June 30, 2023, compared to the same period in 2022.

This decrease is primarily driven by

expensing of the prepaid R&D contribution of $2,600,000 during the same period in 2022 and decrease in the R&D activities related to COVID-19, as the demand for Covid testing products decreased significantly

and we redirected our resources and efforts away from developing products related to Covid testing.

As the Company’s operating activities increase, we expect its development

and regulatory expenses to increase in future periods.

Depreciation and amortization

Depreciation and amortization increased by $966,732

to $966,732 from $0 for the year ended June 30, 2023, compared to same period in 2022.

This is due to the acquisition of IFP and primarily

related to the amortization of acquired Intangibles during the current period.

Goodwill Impairment

The goodwill impairment expenses increased by

$4,158,670 to $4,158,670 from $0 for the year ended June 30, 2023, compared to the same period in 2022.

Refer to note 3 of

our consolidated financial statements appearing elsewhere in our Annual Report on Form 10-K.

Other income and expenses

Interest expense

Interest expense increased by $215,995 to $223,534

from $7,539 for the year ended June 30, 2023, as compared to the same period in 2022.

This increase was attributable to the interest expense

recorded for convertible notes after the acquisition of IFP.

Realized foreign exchange loss

Realized foreign exchange loss increased by $5,842 to $9,829 from $3,987

for the year ended June 30, 2023, compared to the same period in 2022.

The increase in loss was largely attributable to the Company’s

settled translations in currencies other than its functional currencies.

Fair value gain on revaluation of financial instruments

The fair value gain increased by $2,154,365 to $2,154,365

from $0 for the year ended June 30, 2023, as compared to the same period in 2022.

This increase is due to the revaluation gains on the

convertible notes and contingent consideration for holdback shares resulting from the acquisition of IFP.

Interest income

Interest income decreased by $4,750 to $9,676 from $14,426 for the year

ended June 30, 2023, as compared to the same period in 2022.

This decrease was attributable to the lower bank balance during the current

period due to the amount spent on operating and development activities.

For additional information regarding

the conversion of the convertible notes, see “ Item 1.

Business – Conversion of Convertible Debt and Preferred Stock .”

Income tax (expense) benefit

There was no income tax expense for the year

ended June 30, 2023, and 2022, respectively, as the Company has established a full valuation allowance for all its deferred tax assets.

Other comprehensive income

Foreign currency translation gain/(loss)

Unrealized foreign currency translation gain increased

by $339,514 to a gain of $212,639 from a loss of $126,875 for the year ended June 30, 2023, compared to the same period in 2022.

calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets

and liabilities of foreign subsidiaries in reporting currency.

Net loss attributable to INBS increased by $2,325,669

to $10,631,720 from $8,306,051 for the year ended June 30, 2023, compared to the same period in 2022.

This increase is primarily driven

by impairment of goodwill $4,158,670 offset by a recognition of fair value gain on revaluation of convertible notes and holdback Series

C Preferred Stock during the current period of $2,154,365.

Liquidity and Capital Resources

We use working capital and cash measures to evaluate

the performance of our operations and our ability to meet our financial obligations.

We define Working Capital as current assets less

current liabilities.

This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.

information is intended to provide investors with information about our liquidity.

Other companies in our industry may calculate this

measure differently than we do, limiting its usefulness as a comparative measure.

Since our inception, our operations have primarily

been financed through the issuance of our common stock, redeemable convertible preferred stock, and the incurrence of debt.

30, 2023, we had $1,537,244 in cash and cash equivalents and a working capital deficit of $2,021,124.

The Company expects that its cash and cash equivalents

as of June 30, 2023, will be insufficient to allow the Company to fund its current operating plan through at least the next twelve months

from the issuance of these financial statements.

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern for a period of at least one year from the date these financial statements are issued.

The Company is currently evaluating

raising additional funds through private placements and or public equity financing.

However, there can be no assurance that, in the event

that the Company requires additional financing, such financing will be available on terms which are favorable to us, or at all.

these factors raise substantial doubt about the Company’s ability to continue as a going concern.

In the event we require additional capital, there

can be no assurances that we will be able to raise such capital on acceptable terms, or at all.

Failure to generate sufficient revenues

or raise additional capital through debt or equity financings, or through collaboration agreements, strategic alliances or marketing and

distribution arrangements, could have a material adverse effect on our ability to meet our long-term liquidity needs and achieve our intended

long-term business plan.

Our failure to obtain such funding when needed could create a negative impact on our stock price or could potentially

lead to a reduction in our operations or the failure of our company.

Accordingly, these factors raise substantial doubt about the Company’s

ability to continue as a going concern.

Extended Transition Period for “Emerging

Growth Companies”

We have elected to use the extended transition period

for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

This election allows us to delay the adoption

of new or revised accounting standards that have different effective dates for public and private companies until those standards apply

to private companies.

As a result of this election, our financial statements may not be comparable to companies that comply with public

company effective dates.

Because our financial statements may not be comparable to companies that comply with public company effective

dates, investors may have difficulty evaluating or comparing our business, performance or prospects in comparison to other public companies,

which may have a negative impact on the value and liquidity of our common stock.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements

or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special

purpose entities.

Critical Accounting Estimates

The preparation of our consolidated financial statements

in conformity with GAAP requires management to make judgments, estimates and assumptions that impact the amounts reported in our consolidated

financial statements and accompanying notes that are not readily apparent from other sources.

The estimates and associated assumptions

are based on historical experience and other factors that are considered relevant.

Actual results may differ from these estimates.

estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognized in the period

in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the

revision affects both current and future periods.

3 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, and incorporated herein by

reference, describes the Company’s accounting policies.

The following discussion should be read in conjunction with Note 3, as

it presents uncertainties involved in applying the accounting policies and provides insight into the quality of management’s estimates

and variability in the amounts recorded for these critical accounting estimates.

While all accounting policies impact the consolidated

financial statements, certain policies may be viewed to be critical.

Management believes that the accounting policies which involve more

significant judgments and estimates used in the preparation of our consolidated financial statements include research and development

Company measures the research and development grant income and receivable by taking into account the time spent by employees on eligible

research and development activities and research and development costs incurred to external service providers.

The research and development

tax refund receivable is recognized as the Company believes that it probable that the amount will be recovered in full through a future

issued Accounting Pronouncements

the impact of recently issued accounting pronouncements on the Company’s consolidated financial statements, see Note 3 to the consolidated

financial statements included in Part II, Item 8 of this Annual Report on Form 10-K and incorporated herein by reference.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise

required under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

consolidated financial statements required pursuant to this item are included in Part IV, Item 15 of this Annual Report on Form 10-K,

beginning on page F-1, and incorporated herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

The estimates and underlying assumptions are reviewed

on an ongoing basis.

Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision

affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

Note 3 to the consolidated financial statements included

in Part II, Item 8 of this Annual Report on Form 10-K, and incorporated herein by reference, describes the Company’s accounting

The following discussion should be read in conjunction with Note 3, as it presents uncertainties involved in applying the accounting

policies and provides insight into the quality of management’s estimates and variability in the amounts recorded for these critical

accounting estimates.

While all accounting policies impact the consolidated financial statements, certain policies may be viewed to be

Management believes that the accounting policies which involve more significant judgments and estimates used in the preparation

of our consolidated financial statements include research and development tax refunds.

We believe our most critical accounting policies and

estimates relate to the following:

Revenue recognition

Revenue from contracts with customers

is recognized when, or as, the Company 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 that good or

service deliverable.

Accounting for the grant income does not fall under

ASC 606, Revenue from Contracts with Customers , as the Australian Government will not benefit directly from our manufacturing facility.

As there is no authoritative guidance under U.S.

GAAP on accounting for grants to for-profit business entities, we applied International

Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance by analogy

when accounting for the Australian Government grant to the Company.

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 deducting the grant proceeds received from the gross costs of the

assets or construction in progress (“CIP”) and the deferred grant income liability.

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 Company received

payments of $1.4 million and $2.1 million during the years ended June 30, 2023 and 2022, respectively.

The project has been delayed due to global shortages

of semiconductors that are used in manufacturing equipment and global supply chain disruption due to Covid-19 pandemic in the preceding

As of June 30, 2023, the Company has only completed 4 of the 8 milestones in the grant agreement.

There is uncertainty regarding

the potential extension of the grant agreement past its original end of March 28, 2024.

Therefore, management concluded that there was

no reasonable assurance that the remaining grant receivable would be received.

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 recognition in 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 $127,944 and $51,258 deferred grant income was recognized within other income during

the years ended June 30, 2023, and 2022, respectively.

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.

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.

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.

During the 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 it’s 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.

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.

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.

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 values 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 the 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 expense in the consolidated statements of operations.

R&D tax Refund

The Company measures the research

and development grant income and receivable by taking into account the time spent by employees on eligible research and development activities

and research and development costs incurred to external service providers.

The research and development tax refund receivable is recognized

as the Company believes that it probable that the amount will be recovered in full through a future claim.

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.

Recently issued Accounting Pronouncements

For the impact of recently

issued accounting pronouncements on the Company’s consolidated financial statements, see Note 3 to the consolidated financial statements

included in Part II, Item 8 of this Annual Report on Form 10-K and incorporated herein by reference.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule

12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY

The consolidated financial statements required pursuant

to this item are included in Part IV, Item 15 of this Annual Report on Form 10-K, beginning on page F-1, and incorporated herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURES.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis