What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-08-15 compared with 2024-09-18 · 293 added, 273 removed, 138 unchanged (80% of the section changed)

12 unchanged sentences

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

Financial Measures

supplement our consolidated financial statements, which are prepared and presented in accordance with US GAAP, we present “contribution

margin” and “contribution margin %”, which are non-GAAP financial measures.

Contribution margin and contribution margin % are presented

in the section titled “Contribution Margin (non-GAAP)”.

Contribution margin and contribution margin

% are presented in the section titled “Contribution Margin (non-GAAP)”.

We have also included reconciliations of these non-GAAP

financial measures to their most directly comparable GAAP financial measures.

non-GAAP financial measures are not intended to be considered in isolation or as a substitute for, or superior to, financial information

prepared and presented in accordance with US GAAP.

These measures may be different from non—GAAP financial measures used by other

companies, limiting their usefulness for comparison purposes.

Moreover, presentation of contribution and contribution margin is provided

for year-over-year comparison purposes.

We believe these non-GAAP financial measures provide investors with useful supplemental information

about the financial performance of our business, enable comparison of financial results between periods where certain items may vary

independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our

otherwise indicated, all share and per share information in this report gives effect to the reverse stock split of our outstanding common

stock, which was effected at a ratio of 1-for-12 as of 5:00 p.m.

Eastern Time on January 26, 2024.

These measures may be different from non-GAAP financial measures used by other companies,

limiting their usefulness for comparison purposes.

Moreover, presentation of contribution and contribution margin is provided for year-over-year

comparison purposes.

We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial

performance of our business, enable comparison of financial results between periods where certain items may vary independent of business

performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

Intelligent Bio Solutions Inc.

and its wholly owned

Delaware subsidiary, GBS Operations Inc., were each formed on December 5, 2016, under the laws of the state of Delaware.

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

2 unchanged sentences

On October 4, 2022, INBS acquired Intelligent Fingerprinting

Limited (“IFP”), a company registered in England and Wales (the “IFP Acquisition”).

The Company’s headquarters

are in New York, New York.

Intelligent Bio Solutions Inc.

is a medical technology

company focused on developing and delivering intelligent, rapid, non-invasive testing and screening solutions.

The Company operates globally

with the objective of providing innovative and accessible solutions that improve the quality of life.

Limited (“IFP”), a company registered in England and Wales.

The Company’s headquarters are in New York, New York.

Bio Solutions Inc.

is a medical technology company focused on developing and delivering intelligent, rapid, non-invasive testing and

screening solutions.

The Company operates globally with the objective of providing innovative and accessible solutions that improve the

quality of life.

Company’s current product portfolio includes:

Fingerprinting Platform:

A proprietary portable platform that analyzes fingerprint sweat using a one-time cartridge and portable

handheld reader.

The flagship product from this platform, which is commercially available in certain countries outside of the United

States, is the Intelligent Fingerprinting Drug Screening System (the “IFP System” or “IFP Products”), a two-part

system that consists of non-invasive, fingerprint sweat-based diagnostic testing products designed to detect drugs of abuse including

opiates, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine.

The system comprises a small, tamper-evident

drug screening cartridge onto which ten fingerprint sweat samples are collected in under a minute before the portable analysis unit

provides an on-screen result in under ten minutes.

Samples collected with a confirmatory kit can also be sent to a third-party laboratory

service provider for confirmation testing.

Customers include safety-critical industries such as construction, transportation and

logistics, manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and judicial organizations.

Biosensor Platform – A biosensor platform we refer to as the Biosensor Platform Technology (“BPT”), or simply

the “Biosensor Platform,” consists of a small, printable modified organic thin-film transistor strip that we license

across the Asia Pacific Region (“APAC Region”) from Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or

The Biosensor Platform is designed to detect multiple biological analytes by substituting the top enzyme

layer of the biosensor to suit each analyte.

Intelligent Fingerprinting Platform:

The Company’s current active product is the Intelligent Fingerprinting Platform, which consists of the proprietary portable platform that analyzes fingerprint sweat using a one-time cartridge and portable handheld reader.

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

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

Samples collected with a confirmatory kit can also be sent to a third-party laboratory service provider for confirmation testing.

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

plan to bring the IFP System to new markets and grow within existing markets concentrating on:

market share across the United Kingdom and mainland Europe;

sales and distribution throughout Australia, New Zealand and other countries in the Asia

Pacific Region (“APAC Region”), and establishing the infrastructure and satisfying

the regulatory requirements needed to do so;

to work on 510(k) pre-market notification submitted on December 2024 for expansion into United

States markets that require FDA clearance, followed by the planned initial launch of our

opiate test system for codeine and then for additional drugs following such additional FDA

clearance as may be required

research aimed at broadening the capabilities of the IFP System to test for additional drugs

and indications, facilitating the expansion of the platform into point-of-care medical testing;

the IFP System into new customer segments, including major sporting organizations, law enforcement,

and commercial airlines;

a strategic network of distributors with established customer bases throughout the APAC Region,

Europe and North America to distribute the IFP Products.

Biosensor Platform :

Under the terms of an Amended and Restated License Agreement dated September 12, 2019 (the “BPT License Agreement”), between the Company and Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or “Licensor”), the Company held an exclusive license in the Asia Pacific Region (“APAC Region”) to the Licensor’s proprietary rights to the biosensor technology (the “Biosensor IP”) used in the biosensor platform we refer to as the Biosensor Platform Technology (“BPT”), or simply the “Biosensor Platform”.

This platform consists of a small, printable modified organic thin-film transistor strip designed to detect multiple biological analytes by substituting the top enzyme layer of the biosensor to suit each analyte.

We refer to products that use the BPT as the “Licensed Products”.

This platform technology has the potential to develop a range of Point of Care Tests.

(“POCT”), including the modalities of clinical chemistry, immunology, tumor markers, allergens, and endocrinology.

understand that following the appointment of a liquidator to LSBD, the intellectual property rights licensed by us from the Licensor

(LSBD) have reverted to the University of Newcastle.

The Company is in early-stage discussions regarding the potential restructuring

of future licensing of BPT and products with the University of Newcastle.

A timeline for these discussions has not yet been established.

We understand that following the appointment of a liquidator to LSBD on July 21, 2023, the Biosensor IP we licensed from LSBD has reverted back to the University of Newcastle.

Following our ongoing discussions with the University, it is the Company’s understanding that the University of Newcastle cannot finalize licensing of the Biosensor IP until the liquidation of LSBD is complete.

As the timeline for the completion of LSBD’s liquidation is unknown, the Company does 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 licensing arrangements related to the BPT.

of Operations

Financial Performance

June 30, 2024

June 30, 2023

Gross Profit %

The Company continues to meet its objectives of strong market penetration and improved margins achieved through economies

of scale with enough volume to achieve growth of 147.58% in sales revenue and 336.41% growth in gross profit for the fiscal year ended

June 30, 2024, compared to the same period in fiscal 2023.

Furthermore, the Company is set to compound this growth with the numbers of

readers reaching 1,037 on customer sites, as of June 2024.

of the Years Ended June 30, 2024 and 2023

Year ended June 30,

Cost of revenue (exclusive of amortization shown separately below)

Other income:

Government support income

Comparison of the Years Ended June 30, 2025 and 2024

Ended June 30,

of revenue (exclusive of amortization shown separately below)

support income

general and administrative expenses

and regulatory approval expenses

and amortization

Impairment of long-lived assets

operating expenses

Selling, general and administrative expenses

Development and regulatory approval expenses

Depreciation and amortization

Goodwill impairment

Total operating expenses

(12,708,367 )

(12,133,576 )

Loss from operations

from operations

(10,644,607 )

(10,283,174 )

Other income (expense), net:

Interest expense

Realized foreign exchange loss

Fair value gain on revaluation of financial instrument

Interest income

Total other income, net

income (expense), net

foreign exchange loss

value gain on revaluation of financial instrument

other income, net

(10,604,886 )

(10,190,932 )

Net loss attributable to non-controlling interest

Net loss attributable to Intelligent Bio Solutions Inc.

loss attributable to non-controlling interest

loss attributable to Intelligent Bio Solutions Inc.

$ (10,568,733 )

$ (10,156,759 )

Other comprehensive income (loss), net of tax:

Foreign currency translation gain/ (loss)

Total other comprehensive income (loss)

Comprehensive loss

comprehensive income (loss), net of tax

currency translation gain (loss)

other comprehensive income (loss)

Comprehensive

(10,220,216 )

(10,328,050 )

Comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to Intelligent Bio Solutions Inc.

Comprehensive

loss attributable to non-controlling interest

Comprehensive

loss attributable to Intelligent Bio Solutions Inc.

(10,184,063 )

(10,293,877 )

Net loss per share, basic and diluted*

Weighted average units outstanding, basic and diluted *

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

Common Stock and per share amounts have been retroactively adjusted to reflect the decreased number of shares resulting

from the 1-for-12 reverse stock split effected on January 26, 2024, throughout the consolidated

financial statement unless otherwise stated.

loss per share, basic and diluted

average shares outstanding, basic and diluted

of Operations:

of the Years Ended June 30, 2025, and 2024

from sales of goods increased by $1,854,909 to $3,111,781 from $1,256,872 for the year ended June 30, 2024, compared to same period in

This is due to the expansion of the customer base, both in the pre-existing markets and expansion into new regions.

We expect this

trend to continue as we expand into new markets in the future.

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

Ended June 30,

of goods - cartridges

of goods - readers

of revenue increased by $755,951 to $1,686,155 from $930,204 for the year ended June 30, 2024, compared to same period in 2023.

of revenue relates to the direct labor, direct material costs and direct overhead costs incurred in the production of the goods.

is in line with expectations, as the business expands into new markets.

Revenue from sales of goods decreased by $59,249

to $3,052,532 from $3,111,781 for the year ended June 30, 2025, compared to same period in 2024.

This decrease is mainly due to instability

in the construction sector in our primary market, the UK which has resulted in the lower number of readers being sold during the period.

from IFP Products 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 increased by $119,518 to $1,805,673

from $1,686,155 for the year ended June 30, 2025, compared to same period in 2024.

The increase in cost of revenue is mainly due to an

increase in direct labor cost due to annual salary revision for direct manufacturing labor during the fourth quarter of fiscal 2025 and

direct overhead costs.

The following table shows the composition of cost of revenue.

Cost of revenue

Year Ended June 30,

2 unchanged sentences

Direct overhead cost

Total cost of revenue

Total cost of revenue (exclusive of amortization)

Year Ended June 30,

4 unchanged sentences

Gross profit margin

profit increased by $1,098,958 to $1,425,626 from $326,668 for the year ended June 30, 2024, compared to same period in 2023.

been driven by increased revenue from acquiring new customers.

gross profit is primarily attributable to the IFPG segment.

Gross profit decreased by $178,767 to $1,246,859

from $1,425,626 for the year ended June 30, 2025, compared to same period in 2024.

The gross profit margin decreased by 4.96% due to an

increase in direct labor costs due to additional head counts, increase in minimum wages of factory staff by 8.90% year-on-year and direct

overhead costs.

margin (non-GAAP)

3 unchanged sentences

Contribution margin % (non-GAAP)

margin, which is a non-GAAP measure of our financial performance, increased by $1,206,908 to $2,094,563 from $887,655 for the year ended

June 30, 2024, compared to same period in 2023.

This has been driven by increased revenue from acquiring new customers.

margin (non-GAAP)

Contribution margin, which is a non-GAAP measure

of our financial performance, increased by $34,718 to $2,129,281 from $2,094,563 for the year ended June 30, 2025, compared to same period

The contribution margin improved by approximately 2.44% 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.

Reconciliation

of contribution margin (non-GAAP)

Year Ended June 30,

Revenue (GAAP)

Cost of revenue (exclusive of amortization) (GAAP)

Gross Profit (GAAP)

Direct labor cost

Direct overhead cost

Contribution margin (non-GAAP)

Contribution margin % (non-GAAP)

support income

support income in the IFPG and BPT segments decreased by $312,852 to $424,776 from $737,628 for the year ended June 30, 2024,

compared to same period in 2023.

This decrease was primarily attributable to an adjustment for a potential refund of the Australian

Government grant if we are unable to complete the project on time.

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

Government support income in the United Kingdom

and Australia geographic segments increased by $392,125 to $816,901 from $424,776 for the year ended June 30, 2025, compared to same period

This increase was primarily attributable to the Company’s investment in qualifying research and development expenditures

for research and development government subsidies and unwinding of the grant income in the fourth fiscal quarter of FY 2024-25 upon the

completion of the grant acquittal audit.

The grant support income is primarily attributable

to INBS’s subsidiary companies recognizing an R&D tax refund as the Company believes there is a reasonable assurance that the

certain amount will be recovered in full through future claims (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).

general and administrative expenses

general and administrative expenses increased by $1,231,793 to $9,258,496 from $8,026,703 for the year ended June 30, 2024, compared

to the same period in 2023.

This increase is primarily due to engagement of consultants for marketing, media and investor relationship

management, capital raising, professional fees for legal and compliance as the Company continues to expand its business and conduct clinical

study as it progresses along its 510(k) pathway for FDA clearance.

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.

We aim to ensure that

our cost efficiency is increased over the same period whilst we streamline the business, delivering increased value for investors.

Selling, general and administrative expenses decreased by $374,579 to $8,883,917

from $9,258,496 for the year ended June 30, 2025, 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.

As the Company’s operating activities increase,

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

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

We aim to increase our cost efficiency as we streamline the

business and implement changes, delivering increased value for investors.

and regulatory approval expenses

and regulatory approval expenses increased by $1,166,382 to $1,673,806 from $507,424 for the year ended June 30, 2024, compared to the

same period in 2023.

This increase is primarily driven by amounts spent on in-house R&D staff and timing of R&D

work performed by the research partners engaged by the Company.

the Company continues its FDA 501(k) clinical study plan, we expect development and regulatory expenses to increase in future periods,

as demonstrated by the results above.

Development and regulatory approval expenses increased

by $722,707 to $2,396,513 from $1,673,806 for the year ended June 30, 2025, compared to the same period in 2024.

This increase is primarily

driven by the increased expenditure on R&D activities as the Company undertook multiple clinical trials and filed for FDA 510 (k)

During the year ended June 30, 2025, the Company

partnered with CenExel Research, a third party Clinical Research Organization (CRO), and completed a method comparison clinical study

on its IFP System.

We expect development and regulatory expenses

to increase in future periods, as the Company aims to conduct future studies for additional drugs of abuse.

and amortization

and amortization increased by $234,542 to $1,201,274 from $966,732 for the year ended June 30, 2024, compared to same period in 2023.

This is mainly due to inclusion of amortization of intangible assets for twelve months to June 30, 2024 results as compared to approximately

nine months to June 30, 2023 upon the acquisition of IFP in October 2022 offset by the revaluation of the useful life of technology assets

from 5 years to 7 years on April 1, 2023.

goodwill impairment expenses decreased by $4,158,670 to $0 from $4,158,670 for the year ended June 30, 2024, compared to the same period

Refer to note 3 of our consolidated financial statements appearing elsewhere in our Annual Report on Form 10-K.

Depreciation and amortization increased by $6,601 to $1,207,875 from $1,201,274

for the year ended June 30, 2025, compared to same period in 2024.

This increase is mainly due to the fluctuation in the foreign exchange

rate for conversion of the account balances.

of long-lived assets

The Impairment of long-lived assets increased

by $220,062 to $220,062 from $0 for the year ended June 30, 2025, compared to the same period in 2024.

The increase is mainly due to the

impairment of construction in progress (CIP) assets.

Refer to Note 7 of financial reports for details.

income and expenses

expense decreased by $56,394 to $167,140 from $223,534 for the year ended June 30, 2024, as compared to the same period in 2023.

decrease was attributable to the conversion of the convertible notes into common stock of the Company in May 2023.

Interest expense decreased by $106,250 to $60,890 from $167,140 for the

year ended June 30, 2025, as compared to the same period in 2024.

This decrease was attributable to the reduction of the interest recorded

for leased assets and notes payable as the leases are nearing its termination date.

foreign exchange loss

foreign exchange loss decreased by $8,651 to $1,178 from $9,829 for the year ended June 30, 2024, compared to the same period in

This decrease was largely attributable to favorable exchange rates while settling transactions in currencies other than its

functional currencies.

Realized foreign exchange loss decreased by $267 to $911 from $1,178 for

the year ended June 30, 2025, compared to the same period in 2024.

This decrease was largely attributable to favorable exchange rates

while settling transactions in currencies other than its functional currencies.

value gain on revaluation of financial instruments

fair value gain decreased by $1,978,627 to $175,738 from $2,154,365 for the year ended June 30, 2024, as compared to the same period

This decrease is due to the revaluation gains on the convertible notes and contingent consideration for holdback Series C Preferred Stock resulting

from the acquisition of IFP.

The convertible notes and holdback Series C Preferred Stock shares were converted

into common stock in May 2023 and October 2023, respectively.

income increased by $75,146 to $84,822 from $9,676 for the year ended June 30, 2024, as compared to the same period in 2023.

This increase

was attributable to the higher bank balance during the current period due to capital raising of approximately $14.56 million, net of costs

during fiscal year ended June 30, 2024.

The fair value gain decreased by $175,738 to $0 from $175,738 for the year

ended June 30, 2025, as compared to the same period in 2024.

This decrease is due to the revaluation gain on contingent consideration

for holdback Series C Preferred Stock resulting from the acquisition of IFP.

The holdback Series C Preferred Stock shares were converted

into common stock in October 2023.

There was no fair value revaluation gain or loss on financial instruments for the year ended June 30,

Interest income increased by $16,700 to $101,522 from $84,822 for the year

ended June 30, 2025, as compared to the same period in 2024.

This increase was attributable to funds received from capital raising activities,

which contributed to the balance on which interest was earned.

tax (expense) benefit

1 unchanged sentence

allowance for all its deferred tax assets.

comprehensive income

currency translation gain/(loss)

foreign currency translation gain decreased by $349,757 to a loss of $137,118 from a gain of $212,639 for the year ended June 30, 2024,

compared to the same period in 2023.

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

functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency.

The One Big Beautiful Bill Act (the “OBBBA”), signed into

law on July 4, 2025, introduces amendments to U.S.

tax laws with various effective dates.

Key tax-related provisions of the OBBBA include

changes to bonus depreciation, research and development expenditures, interest expense deductibility, and revisions to international tax

The Company is currently assessing the future implications of these tax law changes.

comprehensive income (loss)

Foreign currency translation gain (loss)

Unrealized foreign currency translation gain increased by $521,788 to a

gain of $384,670 from a loss of $137,118 for the year ended June 30, 2025, compared to the same period in 2024.

This 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.

loss attributable to INBS

loss attributable to INBS decreased by $474,961 to $10,156,759 from $10,631,720 for the year ended June 30, 2024, compared to the same

period in 2023.

decrease is primarily driven by goodwill impairment charges of $4,158,670 and combined results of operations after the acquisition of

IFP offset by a recognition of fair value gain on revaluation of convertible notes and holdback Series C Preferred Stock of $2,062,878

during the same period in 2023.

Net loss attributable to INBS increased by $411,974

to $10,568,733 from $10,156,759 for the year ended June 30, 2025, compared to the same period in 2024.

This increase is primarily driven by increase

in development and regulatory approval expenses as the Company ran multiple clinical trials for submission to the FDA and impairment of

the available for sale assets during the year.

and Capital Resources

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

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

We define Working Capital as current assets less current liabilities.

This measure should not be considered in

isolation or as a substitute for any standardized measure under US GAAP.

This information is intended to provide investors with

information about our liquidity.

Other companies in our industry may calculate this measure differently than we do, limiting its

usefulness as a comparative measure.

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, 2024, we had $6,304,098 in cash and cash equivalents and working capital of $3,083,510.

Company expects that its cash and cash equivalents as of June 30, 2024, may be insufficient to allow the Company to fund its current

operating plan through at least the next twelve months from the issuance of these financial statements.

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.

There can be no assurance that, in the event that the Company requires additional financing, such financing may

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

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.

Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern unless it can successfully

raise additional capital.

Provided by Financing Activities

October 4, 2023, the Company raised approximately $4.38 million, prior to deducting underwriting discounts and commissions and offering

expenses, via a registered underwritten public offering of the Company’s securities.

Net proceeds to the Company, after deducting

the underwriting discounts and commissions and estimated offering expenses payable by the Company, were approximately $3.79 million.

See Note 13, Shareholders’ Equity, for further details.

February 7, 2024, the Company raised approximately $1.77 million, prior to deducting closing costs and placement agent fees, via a warrant

inducement transaction with holders of the Company’s Series E Warrants issued on October 4, 2023.

Net proceeds to the Company,

after deducting closing costs, placement agent fees, and other estimated expenses payable by the Company, was approximately $1.58 million.

See Note 13, Shareholders’ Equity, for further details.

March 12, 2024, the Company raised approximately $10.10 million, prior to deducting placement agent’s fees and other offering expenses

via a private placement of common stock and warrants priced at-the-market under Nasdaq rules.

Net proceeds to the Company, after deducting

placement agent’s fees and other estimated offering expenses payable by the Company, were approximately $9.12 million.

13, Shareholders’ Equity, for further details.

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

for any standardized measure under US GAAP.

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

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

Since our inception, we have financed our operations

primarily though proceeds from public offerings and private placements of equity securities, existing trade and shareholder financing

arrangements, and the incurrence of debt.

As of June 30, 2025, we had $1,019,909 in cash and cash equivalents and working capital deficit

of $1,212,419.

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.

(“Ladenburg”).

Pursuant to the terms of the ATM Agreement, the Company may sell from time to time through Ladenburg, as sales agent and/or principal,

shares of the Company’s common stock, with an aggregate sales price of up to $3.0 million.

On March 11, 2025, the Company filed

a prospectus supplement (the “2025 ATM Supplement”) to the ATM Prospectus (defined below) in connection with the offer, sale,

and issuance of additional shares.

During the period between September 18, 2024, through to June 30, 2025, the Company raised approximately

$2,251,540 (net of commissions of approximately $69,637 paid to Ladenburg) through the sale and issuance of 1,434,659 shares of Company

common stock pursuant to the ATM Agreement.

During the three months ended June 30, 2025, the Company raised approximately $765,201 (net

of commissions of approximately $23,666 paid to Ladenburg) through the sale and issuance of 514,296 shares of Company common stock pursuant

to the ATM Agreement.

Any sale of shares pursuant to the ATM Agreement are made under the Company’s effective “shelf”

registration statement on Form S-3 (File No.

333-264218), which became effective on April 20, 2022, and included base prospectus, and

under the related prospectus supplement (the “ATM Prospectus”) filed with the SEC, dated September 18, 2024, as supplemented

by the 2025 ATM Supplement filed with the SEC on March 11, 2025.

February Offering - On February 20, 2025, the Company entered into an underwriting

agreement with Ladenburg, as representative (the “February Representative”) for the underwriters named in Schedule 1 thereto

(collectively, the “February Underwriters”) relating to an underwritten public offering of 1,304,348 shares of the Company’s

common stock.

The public offering price for each share was $2.00 per share and the February Underwriters agreed to purchase 1,304,348

shares (the “February Offering”).

The Company granted the February Underwriters a 45-day option to purchase an additional

195,652 shares of common stock at the public offering price of $2.00 per share, less the underwriting discounts and commissions.

20, 2025, the February Representative fully exercised the over-allotment option to purchase an additional 195,652 shares of common stock.

All of the shares were sold by the Company.

The February Offering closed on February 21, 2025.

As a result of the over-allotment option

being exercised in full, the Company raised approximately $2,645,000 (net of underwriting discounts and commissions of approximately $355,000).

The Company expects that its cash and cash equivalents

as of June 30, 2025, 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.

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.”

However, 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 financing, 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.

to obtain such funding when needed could create a negative impact on our stock price or could potentially lead to a reduction in our operations

or the failure of our Company.

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

concern unless it can successfully raise additional capital.

Transition Period for “Emerging Growth Companies”

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Sheet Arrangements

As of June 30, 2024, we did not have any off-balance

sheet arrangements.

of June 30, 2025, we did not have any off-balance sheet arrangements.

Accounting Estimates

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

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

apparent from other sources.

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

considered relevant.

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

Actual results may differ from these estimates.

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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.

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 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

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

believe our most critical accounting policies and estimates relate to the following:

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.

We believe our most critical accounting policies and estimates relate to the following:

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.

for the grant income does not fall under ASC 606, Revenue from Contracts with Customers , as the Australian Government will not

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income liability.

project has been delayed due to global shortages of semiconductors that are used in manufacturing equipment and global supply chain disruption

due to Covid-19 pandemic in the preceding year.

As of June 30, 2024, the Company has only completed 4 of the 8 milestones in the grant

On April 16, 2024, the Company entered into a Deed of Variation with Australian Government, Department of Industry, Science

and Resources, extending the project completion date to March 28, 2025.

The deed of variation also made certain modifications to the

project costs.

The overall budget of the project has been reduced by $1.65 million to account for the changes in scope of the project.

was no deferred grant income recognized within other income during the year ended June 30, 2024.

A total of $127,944 deferred grant income

was recognized within other income during the year ended June 30, 2023.

In the fourth fiscal quarter

of 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 amounted owed to the Australian

Government was determined as $2,172,108, which is disclosed under liabilities in the balance sheet as of June 30, 2025, as “Accounts

payable and accrued expenses”.

A total of $271,780 and $0

deferred grant income was recognized within other income during the year ended June 30, 2025 and 2024 respectively.

are stated at the lower of cost or net realizable value.

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influence results from operations.

of Long-lived Assets and Goodwill

assets consist of property and equipment, right-of-use assets and other intangible assets.

We assess impairment of assets groups, including

intangible assets at least annually or more frequently if there are any indicators for impairment.

The Company did not recognize any

impairments of long-lived assets during the fiscal year ended June 30, 2024 and 2023.

We perform an annual

impairment test on goodwill in the fourth quarter of each fiscal year or when events occur or circumstances change that would, more likely

than not, reduce the fair value of a reporting unit below its carrying value.

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.

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.

the fiscal year ended June 30, 2023, the Company recognized an impairment charge of $4.2 million in the IFPG segment, which was related

to the goodwill associated with the IFP Acquisition.

Following the impairment charge the goodwill balance was zero.

results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the

date of the acquisition.

The Company uses the acquisition method of accounting and allocates the purchase price to the identifiable assets

and liabilities of the relevant acquired business at their acquisition date fair values.

Any excess consideration over the fair value

of assets acquired and liabilities assumed is recognized as goodwill.

The allocation of the purchase price in a business combination

requires the Company to perform valuations with significant judgment and estimates, including the selection of valuation methodologies,

estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies.

The Company engages the assistance

of valuation specialists in concluding on fair value measurements in connection with determining fair 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 expenses in the consolidated statements of operations.

Company measures the research and development grant income and receivable by calculating the time spent by employees and costs

incurred to external service providers on eligible research and development activities.

The research and development tax refund receivable is recognized as the Company believes that it is

probable that the amount will be recovered in full through a future claim.

of Long-lived Assets

Long-lived assets consist of property and equipment, right-of-use assets and other intangible assets.

assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not

be recoverable.

When such events occur, the Company compares the carrying amounts of the assets to their undiscounted expected future

If this comparison indicates that there is impairment, the amount of impairment is calculated as the difference between the

carrying value and fair value of the asset.

In the fourth fiscal quarter

ended June 30, 2025, upon the completion of the project deadline for the construction of a manufacturing facility in Australia, the construction

in progress assets acquired specifically for the manufacturing facilities were evaluated for alternative uses.

It was determined that

these assets had no alternative use to the Company.

Consequently, management concluded this event to be an indicator of impairment and

initiated an assessment for impairment in accordance with ASC 360, Property, Plant, and Equipment.

As part of this assessment, management

decided to dispose these assets and obtained offers from interested third parties.

The Company determined the fair value of the construction

in progress using the market approach and concluded that the carrying value of the assets exceeded the fair value.

Therefore, the Company

recognized an impairment loss of $220,062 during the fiscal year ended June 30, 2025.

There was no impairment loss recognized during the

fiscal year ended June 30, 2024.

The Company measures the research

and development grant income and receivable by calculating the time spent by employees and costs incurred to external service providers

on eligible research and development activities.

The research and development tax refund receivable is recognized as the Company believes

that there is a reasonable assurance the amount will be recovered in full through future claims.

property acquired for a particular research and development project and that have no alternative future uses (in other research and development

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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