Intelligent Bio Solutions issues going-concern warning
The codeine study reported accuracy above 98%, sensitivity above 94% and specificity of 100% across three U.S. clinical sites.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Intelligent Bio Solutions Inc. (INBS) reported revenue of $1,391,835 for the three months ended September 30, 2026, compared with $1,111,797 a year earlier. Gross profit was $758,004 versus $518,291, while net loss attributable to INBS was $2,658,302 versus $2,983,006. The company submitted a 510(k) premarket notification seeking FDA clearance of its fingerprint drug-screening system for codeine; its three-site study reported accuracy above 98%, sensitivity above 94%, and specificity of 100%.
Cash was $5,929,871 at quarter-end, and operating activities used $2,752,991. Management says cash will be insufficient to fund its current operating plan through at least the next 12 months and additional funds will be required, raising substantial doubt about going concern. A private placement closed September 2, 2026, with approximately $5.0 million in gross proceeds before fees and offering expenses; ATM sales generated $265,373 net of commissions in the quarter. At September 30, 2026, 12,045,102 warrants were outstanding to purchase common shares, versus 3,316,803 shares outstanding; the company says warrant exercise would cause substantial dilution.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointQuarterly revenue rose to $1,391,835 from $1,111,797 year over year.
- Moderate pointNet loss attributable to INBS narrowed to $2,658,302 from $2,983,006.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Cash of $5,929,871 is insufficient for at least 12 months of operations.
- Major pointWarrants to purchase 12,045,102 shares exceed three times shares outstanding.
Key Figures
Key Terms
510(k) premarket notification regulatory
At The Market Offering Agreement financial
contribution margin (non-GAAP) financial
working capital financial
Series M Pre-Funded Warrants financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did INBS report for the September 2026 quarter?
How much did INBS raise in its September 2026 private placement?
When can INBS's September 2026 warrants be exercised?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission
File Number
(Exact name of Registrant as specified in its Charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO
As
of November 10, 2026, there were
Table of Contents
| Page | ||
| PART I. | FINANCIAL INFORMATION | 3 |
| Item 1. | Financial Statements (unaudited) | |
| Condensed Consolidated Balance Sheets | 3 | |
| Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) | 4 | |
| Condensed Consolidated Statements of Changes in Shareholders’ Equity | 5 | |
| Condensed Consolidated Statements of Cash Flows | 6 | |
| Notes to Condensed Consolidated Financial Statements | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 22 |
| Item 4. | Controls and Procedures | 22 |
| PART II. | OTHER INFORMATION | 23 |
| Item 1. | Legal Proceedings | 23 |
| Item 1A. | Risk Factors | 23 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
| Item 3. | Defaults Upon Senior Securities | 25 |
| Item 4. | Mine Safety Disclosures | 25 |
| Item 5. | Other Information | 25 |
| Item 6. | Exhibits | 26 |
| Signatures | 27 | |
| 2 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Intelligent Bio Solutions Inc.
Condensed Consolidated Balance Sheets
| As of September 30, | As of June 30, | |||||||
| 2026 | 2026 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Research and development tax incentive receivable | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Intangibles, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Current portion of operating lease liabilities | ||||||||
| Current employee benefit liabilities | ||||||||
| Total current liabilities | ||||||||
| Employee benefit liabilities, less current portion | ||||||||
| Operating lease liabilities, less current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | - | - | ||||||
| Shareholders’ equity | ||||||||
| Common stock, $ | ||||||||
| Treasury stock, at cost, | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total consolidated Intelligent Bio Solutions Inc. equity | ||||||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
Intelligent Bio Solutions Inc.
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss)
(Unaudited)
| 2026 | 2025 | |||||||
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue (exclusive of amortization shown separately below) | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Other income | ||||||||
| Government support income | ||||||||
| Operating expenses | ||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ||||
| Development and regulatory approval expenses | ( | ) | ( | ) | ||||
| Depreciation and amortization | ( | ) | ( | ) | ||||
| Impairment of long-lived assets | - | ( | ) | |||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense), net | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Realized foreign exchange loss | ( | ) | - | |||||
| Interest income | ||||||||
| Total other income, net | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Net loss attributable to non-controlling interest | ( | ) | ( | ) | ||||
| Net loss attributable to Intelligent Bio Solutions Inc. | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive (loss) income | ||||||||
| Foreign currency translation (loss) gain | ( | ) | ||||||
| Total other comprehensive (loss) income | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Comprehensive loss attributable to non-controlling interest | ( | ) | ( | ) | ||||
| Comprehensive loss attributable to Intelligent Bio Solutions Inc. | $ | ( | ) | $ | ( | ) | ||
| Net loss per share, basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding, basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
Intelligent Bio Solutions Inc.
Condensed Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
Three Months Ended September 30, 2026 and 2025
| Shares | Amount | Shares | Amount | capital | deficit |
(loss) | interest | equity | ||||||||||||||||||||||||||||
| Common stock | Treasury stock | Additional paid-in | Accumulated | Other comprehensive income | Non- controlling | Total shareholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficit |
(loss) | interest | equity | ||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
| Issuance of restricted stock to vendors | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs At-the-Market Offerings | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Common stock issued for warrants exercised, net of issuance costs | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Share based compensation expense | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
| Common stock | Treasury stock | Additional paid-in | Accumulated | Other comprehensive income | Non- controlling | Total shareholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | deficit | (loss) | interest | equity | ||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
| Issuance of restricted stock to vendors | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Issuance of common stock, net of issuance costs At-the-Market Offerings | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Common stock issued for warrants exercised, net of issuance costs | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance, September 30, 2025 | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
Intelligent Bio Solutions Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| 2026 | 2025 | |||||||
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Impairment of long-lived assets | - | |||||||
| Stock-based compensation | ||||||||
| Non-cash other operating activities | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Research and development tax incentive receivable | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Long-term employee benefit liabilities | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | - | ( | ) | |||||
| Net cash used in investing activities | - | ( | ) | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of common stock, net of issuance costs | ||||||||
| Proceeds from issuance and exercise of warrants, net of issuance costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign exchange rates on cash and cash equivalents | ( | ) | ||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of the period | $ | $ | ||||||
| Non-cash investing and financing activities | ||||||||
| Issuance of shares for a subscription receivable | $ | - | $ | |||||
| Operating lease assets obtained in exchange for operating lease liabilities | $ | - | $ | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
Intelligent Bio Solutions Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF THE BUSINESS
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. The Company’s Australian subsidiary, Intelligent Bio Solutions (APAC) Pty Ltd, was formed on August 4, 2016, under the laws of New South Wales, Australia. On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales. Our headquarters are in New York City.
Unless context requires or indicates otherwise, the terms “we,” “us,” “our,” “Company,” or “INBS” refer to Intelligent Bio Solutions Inc. together with its consolidated subsidiaries.
Intelligent Bio Solutions Inc. is a medical technology company focused on developing and delivering intelligent, rapid, non-invasive testing and screening solutions. The Company operates globally with the objective of providing innovative and accessible solutions that improve the quality of life.
Intelligent Bio Solutions Inc. is an authorized distributor of the SMARTOX SmarTest Patch. The SmarTest Patch is a discreet, water-resistant, and tamper-evident device worn on the skin for 7 to 10 days at a time, continuously collecting sweat to detect a broad range of substances, including cocaine, opiates, methamphetamine, marijuana, and fentanyl. The differing detection windows of the SmarTest Patch and the IFP System allow the Company to address both short- and long-term detection needs while maintaining a consistent, non-invasive, sweat-based approach.
NOTE 2. LIQUIDITY AND GOING CONCERN
Through
September 30, 2026, the Company has financed its operations primarily through proceeds from public offerings and private placements
of equity securities, warrant inducement transactions, existing trade and shareholder financing arrangements, and the incurrence of
debt. The Company incurred net losses of $
The Company expects to continue to incur operating losses for the foreseeable future and does not expect to generate positive cash flows from operating activities in the near term. The Company’s ability to achieve profitability depends on, among other things, the successful completion of regulatory approval processes in the United States and other markets where such approval may be required, expansion of its revenue base into target markets, and the continued development and commercialization of its products. The ability to achieve these objectives is subject to significant risks and uncertainties, and there can be no assurance that they will be achieved within the next 12 months from the issuance date of these unaudited condensed consolidated financial statements.
The
Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its
ability to continue as a going concern within one year from the issuance date of these unaudited condensed consolidated financial
statements. Management believes the Company’s cash and cash equivalents as of September 30, 2026, of $
Accordingly, these factors raise substantial doubt about the Company’s ability to continue as a going concern.
The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.
| 7 |
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“US GAAP” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, our unaudited condensed consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. Normal and recurring adjustments considered necessary for a fair statement of the results for the interim periods, in the opinion of the Company’s management, have been included. Operating results for the three months ended September 30, 2026, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2027. The accompanying unaudited condensed consolidated financial statements and related footnote disclosures should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the fiscal year ended June 30, 2026, which was filed with the SEC on August 19, 2026, as amended on Form 10-K/A filed on October 21, 2026 (the “2026 Form 10-K”).
On December 12, 2025, the Company filed
a certificate of amendment to its amended and restated certificate of incorporation to effect, as of 11:59 p.m., December 15, 2025, a
Principles of consolidation
These unaudited condensed consolidated financial statements include the accounts of the Company, all wholly owned and majority-owned subsidiaries in which the Company has a controlling voting interest and, when applicable, variable interest entities in which the Company has a controlling financial interest or is the primary beneficiary. Investments in affiliates where the Company does not exert a controlling financial interest are not consolidated.
All significant inter-company transactions and balances have been eliminated upon consolidation.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management continually evaluates the estimates and judgments it uses. These estimates and judgments have been applied in a manner consistent with prior periods.
Significant estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include the useful lives and impairments of long-lived assets, realizability of inventory, fair value of warrants, realization of deferred tax assets and related uncertain tax positions, valuation of stock-based compensation awards, grant income, R&D tax refund and the allowance for credit losses. Actual results could materially differ from these judgments and estimates under different assumptions or conditions.
Segment Reporting
Accounting Standards Codification (“ASC”) 280, Segment Reporting, defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer performs the function that allocates resources and assesses performance, and thus serves as the Company’s CODM. The CODM reviews the assets, operating results, and financial metrics for four geographic segments:
| ● | Americas consists of North America and South America |
| ● | United Kingdom consists of England, Scotland, Northern Ireland and Wales |
| ● | Asia Pacific (“APAC”) consists of Southeast Asia and Oceania |
| ● | Rest of World consists of all other countries |
The CODM allocates resources and evaluates performance primarily through a review of consolidated operating results, cash resources, and strategic objectives, together with disaggregated information regarding revenue, government support income, long-lived assets, net income (loss) and other key financial metrics by geographic region. The CODM uses this information to evaluate performance and make resource allocation decisions. Accordingly, management has concluded that the Company has four reportable segments consisting of the Americas, United Kingdom, APAC and Rest of World. Each reportable segment derives its revenues from the sale of the IFP Products which include cartridges, readers and accessories.
Stock-Based Compensation
The Company measures compensation cost for all equity awards for employees, directors and non-employees at their grant-date fair value and recognizes compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period. The grant date fair value of restricted stock awards is determined using the Company’s closing stock price on the date of grant. Forfeitures are recognized as they occur.
Stock-based compensation expense for an award with a performance condition is recognized when the achievement of the performance condition has been determined to be probable. If the outcome of such performance condition has not been determined to be probable, no compensation expense is recognized.
The Company classifies stock-based compensation expense in its consolidated statements of operations and other comprehensive income (loss) in the same manner in which the award recipient’s salary and related costs are classified in the case of employees, or in which the award recipient’s service payments are classified in the case of directors and non-employees.
As of September 30, 2026, we have one
long-term equity incentive plan: the 2019 Long Term Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the
issuance of up to
| 8 |
Concentration of credit risk
The
Company places its cash and cash equivalents, which may at times be in excess of the Australia Financial Claims Scheme, the United
Kingdom Financial Services Compensation Scheme or the United States Federal Deposit Insurance Corporation insurance limits, with
high credit quality financial institutions and attempts to limit the amount of credit exposure with any one institution. The amounts
over these insured limits as of September 30, 2026, and June 30, 2026, were $
Major
Customer - One customer accounted for
Major
Supplier - The Company’s largest suppliers accounted for
Leases
The Company determines if an arrangement is a lease at its inception. Lease arrangements are comprised primarily of real estate for which the right-of-use (“ROU”) assets and the corresponding lease liabilities are presented separately on the consolidated balance sheet.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The lease term includes options to extend the lease when it is reasonably certain that the option will be exercised.
The Company accounts for the lease and non-lease components as a single lease component. Therefore, minimum lease payments used to measure the lease liability include all of the fixed consideration in the contract.
The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date, considering publicly available data for instruments with similar characteristics.
Leases with an initial term of 12 months or less are considered short-term leases and are not recorded on the consolidated balance sheets. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term in the same line item as expense arising from fixed lease payments, which is generally within selling, general and administrative expenses in the accompanying consolidated statements of operations and other comprehensive income (loss).
Intangible assets
Intangible assets are considered long-lived assets and are recorded at cost, less accumulated amortization and impairment losses, if any. The definite-lived intangible assets are amortized over their estimated useful lives, which do not exceed any contractual periods.
Certain of our intangible assets have been assigned an indefinite life as we currently anticipate that these trade names and trademarks will contribute cash flows to the Company indefinitely. Indefinite-lived intangible assets are not amortized but are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired. The Company also evaluates at least annually whether the indefinite useful life classification remains appropriate. Amortization of definite-lived intangible assets is recorded on a straight-line basis over their estimated useful lives. Intangible assets acquired from a foreign operation are translated from the foreign entity’s functional currency to the presentation currency based on the exchange rate at the reporting date.
Long-lived assets
Long-lived assets consist of property and equipment, right-of-use assets and intangible assets. Long-lived 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 cash flows. If this comparison indicates that there is impairment, the amount of impairment is calculated as the difference between the carrying value and the estimated fair value of the asset.
Disaggregated revenue
The following table disaggregates the Company’s revenue by product type:
SCHEDULE OF DISAGGREGATES REVENUE BY PRODUCT TYPE
| 2026 | 2025 | |||||||
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Sales of goods - cartridges | $ | $ | ||||||
| Sales of goods - readers | ||||||||
| Other sales - accessories | ||||||||
| Total revenue | $ | $ | ||||||
| 9 |
Warrants
The Company evaluates the appropriate balance sheet classification of warrants that are issued as either equity or as a derivative liability. The Company classifies a warrant as equity if it is “indexed to the Company’s equity” and meets several specific conditions for equity classification. A warrant is not considered “indexed to the Company’s equity,” in general, when it contains certain types of exercise contingencies or potential adjustments to its exercise price. If a warrant is not indexed to the Company’s equity or it has net cash settlement provisions that result in the warrants being accounted for under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) or ASC 815, Derivatives and Hedging (“ASC 815”), it is classified as a derivative liability and carried on the consolidated balance sheets at fair value with any changes in its fair value recognized in the statements of operations and comprehensive income (loss). At September 30, 2026 and 2025, all of the Company’s outstanding warrants were classified as equity.
Foreign currency
The Company’s reporting currency is the U.S. Dollar (“USD”). The functional currency for each foreign subsidiary included in these unaudited condensed consolidated financial statements is the applicable local currency of each entity.
For each entity whose functional currency is not the USD, assets and liabilities are translated into USD using the exchange rate in effect on the balance sheet date and revenue and expenses are translated into USD using the average rate in effect for the period. Translation gains and losses are recorded as a foreign currency translation adjustment as a component of other comprehensive income (loss), which is a component of accumulated other comprehensive income (loss) on the accompanying unaudited condensed consolidated balance sheets.
Cash flows are also translated at average translation rates for the periods; therefore, amounts reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.
Recent Accounting Pronouncements
Adopted:
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (ASC Topic 326), which amends the credit losses guidance. Specifically, the ASU provides a practical expedient whereby an entity can assume that current conditions as of the balance sheet date will not change for the remaining life of the asset (e.g., the account receivable). This guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The adoption of ASU 2025-05 did not have a material impact on our consolidated financial position, results of operations or cash flows.
Pending adoption:
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to enhance transparency of the nature and function of expenses, primarily through additional disclosures of certain costs and expenses. ASU 2024-03 will be effective for our annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. The Company is currently evaluating the impact of adopting ASU 2024-03.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The standard improves the guidance in Topic 270 by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The ASU also provides additional guidance on what disclosures should be provided in interim reporting periods. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. Management is currently evaluating the impact of the new standard on the Company’s consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU establishes guidance for the recognition, measurement, presentation and disclosure of government grants received by business entities. The amendments are effective for public business entities for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. Management is currently evaluating the impact of the new standard on the Company’s consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, and (3) make minor improvements. ASU 2025-12 is effective for the Company’s fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods. Management is currently evaluating the impact of the new standard on the Company’s consolidated financial statements.
The Company did not adopt any other accounting standards during the period that had a material impact on its unaudited condensed consolidated financial statements. Other accounting standards issued by the FASB that are not yet effective are not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
| 10 |
NOTE 4. SEGMENT REPORTING
The following tables set forth the Company’s revenue, government support income, net loss and long-lived assets and inventories by operating and reportable segments.
SCHEDULE OF REVENUE, GOVERNMENT SUPPORT INCOME, NET LOSS AND LONG LIVED ASSETS AND INVENTORIES
A) Revenue, government support income and net loss
| 2026 | 2025 | |||||||
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | ||||||||
| United Kingdom | $ | $ | ||||||
| APAC | ||||||||
| Americas | - | |||||||
| Rest of world | ||||||||
| Total Revenue | $ | $ | ||||||
| Government Support Income | ||||||||
| United Kingdom | $ | $ | ||||||
| APAC | ||||||||
| Total Government Support Income | $ | $ | ||||||
| Net Income (Loss) | ||||||||
| United Kingdom | $ | ( | ) | $ | ( | ) | ||
| APAC | ( | ) | ( | ) | ||||
| Americas | ( | ) | ( | ) | ||||
| Rest of world | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
B) Long-lived assets and inventories, net
| September 30, 2026 | June 30, 2026 | |||||||
| Long-lived assets, net | ||||||||
| United Kingdom | $ | $ | ||||||
| APAC | ||||||||
| Total Long-Lived Assets | $ | $ | ||||||
| Inventories, net | ||||||||
| United Kingdom | $ | $ | ||||||
| APAC | ||||||||
| Total Inventories, net | $ | $ | ||||||
| Total Long-Lived Assets and Inventories, net | $ | $ | ||||||
The Company’s segment revenue, segment expenses, segment net income (loss), and a reconciliation of the total reportable segment’s net income (loss) to the consolidated net income (loss) are as follows:
| United Kingdom | APAC | Americas | Rest of world | Total | ||||||||||||||||
| Three Months Ended September 30, 2026 | ||||||||||||||||||||
| United Kingdom | APAC | Americas | Rest of world | Total | ||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| Add: Government support income | - | - | ||||||||||||||||||
| Less: Cost of revenue (exclusive of amortization shown separately below) | ( | ) | ( | ) | - | ( | ) | ( | ) | |||||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||
| Development and regulatory approval expenses | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||
| Depreciation and amortization | ( | ) | ( | ) | - | - | ( | ) | ||||||||||||
| Impairment of long-lived assets | - | - | - | - | - | |||||||||||||||
| Other segment items(1) | ( | ) | - | - | ||||||||||||||||
| Segment net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||
| (1) |
| 11 |
| United Kingdom | APAC | Americas | Rest of world | Total | ||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||
| United Kingdom | APAC | Americas | Rest of world | Total | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Add: Government support income | - | - | ||||||||||||||||||
| Less: Cost of revenue (exclusive of amortization shown separately below) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||
| Development and regulatory approval expenses | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||
| Depreciation and amortization | ( | ) | ( | ) | - | - | ( | ) | ||||||||||||
| Impairment of long-lived assets | - | ( | ) | - | - | ( | ) | |||||||||||||
| Other segment items(1) | ( | ) | ( | ) | - | |||||||||||||||
| Segment net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||
| (1) |
NOTE 5. INTANGIBLE ASSETS, NET
Intangible assets, net consist of the following as of September 30, 2026:
SCHEDULE OF OTHER INTANGIBLE ASSETS
| Weighted average useful lives | Remaining weighted average useful lives | Acquisition | Effect of foreign | Accumulated | Carrying | |||||||||||||||
| (years) | (years) | cost | currency | amortization | value | |||||||||||||||
| Technology | $ | $ | $ | $ | ||||||||||||||||
| Customer relationships | - | - | ||||||||||||||||||
| Trade names and trademarks | - | |||||||||||||||||||
| Total intangible assets | $ | $ | $ | $ | ||||||||||||||||
Intangible assets, net consist of the following as of June 30, 2026:
| Weighted average useful lives | Remaining weighted average useful lives | Acquisition | Effect of foreign | Accumulated | Carrying | |||||||||||||||
| (years) | (years) | cost | currency | amortization | value | |||||||||||||||
| Technology | $ | $ | $ | $ | ||||||||||||||||
| Customer relationships | - | - | ||||||||||||||||||
| Trade names and trademarks | - | |||||||||||||||||||
| Total intangible assets | $ | $ | $ | $ | ||||||||||||||||
Intangible assets recognized from the acquisition of IFP were allocated to the United Kingdom operating and reportable segment.
The
cumulative balance of the accumulated amortization as of September 30, 2026, and June 30, 2026, was $
Expense
related to the amortization of intangible assets charged to the unaudited condensed consolidated statements of operations and other comprehensive
income (loss) for the three months ended September 30, 2026 and 2025 was $
Estimated amortization for future periods is as follows:
SCHEDULE OF EXPECTED AMORTIZATION EXPENSES FOR INTANGIBLE ASSETS
| Fiscal Year | Amount | |||
| Remainder of 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total | $ | |||
| 12 |
NOTE 6. LEASES
The Company has two non-cancellable operating leases with original lease periods expiring in August 2035 and April 2029.
Cash
paid for leases was $
The components of operating lease expense are as follows:
SCHEDULE OF LEASE EXPENSES
| 2026 | 2025 | |||||||
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating lease costs | $ | $ | ||||||
| Total operating lease costs | $ | $ | ||||||
As
of September 30, 2026 and 2025, the weighted average remaining lease-term was
The reconciliation of the maturities of the operating leases to the operating lease liabilities recorded in the consolidated balance sheet as of September 30, 2026, is as follows:
SCHEDULE OF MATURITIES OF OPERATING LEASES TO OPERATING LEASE LIABILITIES
| Remainder of 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Lease liabilities | $ | |||
| Less: current portion of operating lease liabilities | ( | ) | ||
| Total operating lease liabilities, less current portion | $ |
NOTE 7. SHAREHOLDERS’ EQUITY
Common and Preferred Stock
The Company is authorized to issue
Warrants
As of September 30, 2026, there were
warrants outstanding to purchase
The Company accounts for warrants in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging - Contracts on an Entity’s Own Equity and determined that the warrants do not meet the criteria for liability treatment thereunder. Therefore, the Company’s outstanding warrants are classified as equity as of September 30, 2026, and June 30, 2026.
At The Market (ATM) Offering
On September 18, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”) pursuant to which the Company may offer and sell shares of its common stock from time to time. Following the expiration of the Company’s prior shelf registration statement on Form S-3 (File No. 333-264218), any sales of shares pursuant to the ATM Agreement have been made under the Company’s most recent effective shelf registration statement on Form S-3 (File No. 333-286489), which became effective on September 10, 2025, and the related prospectus supplements filed on September 18, 2025, and March 23, 2026.
During the three months ended September 30, 2026, and 2025, the Company sold
Through September 30, 2026, the Company sold an aggregate
of
| 13 |
September 2026 Securities Purchase Agreement
On
August 31, 2026, the Company entered into a Securities Purchase Agreement (the “September Securities Purchase
Agreement”) with a single institutional investor in connection with a private placement (the “September 2026 Private
Placement”) for the sale by the Company of: (i)
Subject
to certain ownership limitations, the Series M Pre-Funded Warrants and Series N-1 Warrants are exercisable upon issuance. Subject to
the satisfaction of certain conditions, the Series N-1 Warrants are callable at the Company’s option following the Company’s public announcement
that it has received 510(k) clearance from the U.S. Food and Drug Administration permitting the commercial marketing and sale of the
Company’s Intelligent Fingerprinting Drug Screening System. The Series N-2 Warrants are exercisable on and after the date on which the
Company obtains shareholder approval for the issuance of the shares underlying the Series N-2 Warrants. Each Series M Pre-Funded Warrant
is exercisable for one share of common stock at an exercise price of $
Gross
proceeds from the September 2026 Private Placement were approximately $
In connection with the September 2026 Private Placement, the Company entered into a Registration Rights Agreement with the investor and agreed to file by September 15, 2026, a resale registration statement (the “Resale Registration Statement”) with the SEC covering all shares of common stock sold to the investor and the shares of common stock issuable upon exercise of the September 2026 Warrants, and to use its best efforts to cause the Resale Registration Statement to be declared effective no later than October 15, 2026. The Company filed the Resale Registration Statement on September 15, 2026, and the Resale Registration Statement was declared effective on September 23, 2026.
NOTE 8. COMMITMENTS AND CONTINGENCIES
Agreements with CenExel
On
August 1, 2024, the Company signed an agreement with CenExel HRI to perform a method comparison clinical study as part of the Company’s
FDA 510(k) clinical study plan. As a part of the agreement, the Company is committed to pay $
On
January 12, 2026, the Company entered into an agreement with CenExel Clinical Research, Inc. to conduct a clinical performance study
as part of the Company’s FDA 510(k) submission program for the Intelligent Fingerprinting Drug Screening System. The study is designed
to evaluate the accuracy and usability of the system when operated by intended end-users across multiple clinical sites and to support
the user performance requirements of the FDA 510(k) submission process. As a part of the agreement, the Company is committed to pay $
As of September 30, 2026, $1,357,742 remains payable under the agreements, of which $287,381 is accrued within current liabilities in the accompanying condensed consolidated balance sheets within accounts payable and accrued expenses.
Australian Government Grant
On June 30, 2021, the Company executed a definitive
grant agreement with the Australian Government to assist with building a manufacturing facility. The grant had a total value of up to
$
In the fourth fiscal quarter ended June 30, 2025, upon the end of the project deadline for the construction of a manufacturing facility in Australia, a grant acquittal audit was completed by an independent auditor in relation to the grant received from the Australian Government.
As of September 30, 2026, $
Legal Proceedings
From time to time, the Company may become a party to various legal proceedings arising in the ordinary course of business. Based on information currently available, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations or liquidity. However, legal matters are inherently uncertain, and the Company cannot guarantee that the outcome of any potential legal matter will be favorable to the Company.
NOTE 9. LOSS PER SHARE
Basic loss per common share is computed by dividing net loss allocable to common shareholders by the weighted average number of shares of common stock or common stock equivalents outstanding. Diluted loss per common share is computed similar to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.
SCHEDULE OF BASIC LOSS PER COMMON SHARE POTENTIAL DILUTIVE SECURITIES
| 2026 | 2025 | |||||||
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Net loss attributable to Intelligent Bio Solutions Inc. | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted net loss per share attributed to common shareholders | $ | ( | ) | $ | ( | ) | ||
| Weighted-average number of shares outstanding | ||||||||
As the Company has incurred net losses in all periods, certain potentially dilutive securities, including warrants to acquire common stock, have been excluded from the computation of diluted loss per share as the effects are antidilutive.
The following outstanding warrants were excluded from the computation of diluted net loss per share:
SCHEDULE OF ANTI-DILUTIVE WARRANTS
| 2026 | 2025 | |||||||
| As of September 30, | ||||||||
| 2026 | 2025 | |||||||
| Warrants | ||||||||
| Antidilutive securities excluded from computation of earnings per share, amount | ||||||||
| 14 |
NOTE 10. SHARE-BASED COMPENSATION
Restricted Stock Awards
On March 18, 2026, the Company granted restricted stock awards (“RSAs”) to directors, employees, and executive officers, subject
to time-based and performance-based vesting conditions. Time-based awards generally vest over one to
The Company recognized stock-based compensation expense
of $
The table below shows the activity related to restricted stock awards during the three months ended September 30, 2026:
SCHEDULE OF NON VESTED ACTIVITY RELATED TO RESTRICTED STOCK AWARDS
| Number of Shares | Weighted Average Grant Date Value per Share | |||||||
| Nonvested as of June 30, 2026 | $ | |||||||
| Granted | - | - | ||||||
| Vested | - | - | ||||||
| Forfeited | - | - | ||||||
| Nonvested as of September 30, 2026 | $ | |||||||
NOTE 11. SUBSEQUENT EVENTS
No material subsequent events have taken place between September 30, 2026, and the date of this report that require disclosure in these unaudited condensed consolidated financial statements.
| 15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In addition to historical information, this discussion contains forward-looking statements based upon management’s current expectations that are subject to risks and uncertainties which may cause our actual results to differ materially from plans and results discussed herein. We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A. “Risk Factors” included in Part II of this Quarterly Report on Form 10-Q and Item 1A. “Risk Factors” included in Part I of the 2026 Form 10-K. You should read the following discussion in conjunction with our audited historical consolidated financial statements, which are included in our 2026 Form 10-K and our unaudited condensed consolidated financial statements for the three months ended September 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q.
Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with US GAAP, we present “contribution margin” and “contribution margin %”, which are non-GAAP financial measures. Contribution margin and contribution margin % are presented in the section titled “Contribution Margin (non-GAAP)”. We have also included reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with US GAAP. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. Moreover, presentation of contribution margin and contribution margin % is provided for year-over-year comparison purposes. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.
Forward-Looking Information
All statements other than statements of historical fact or relating to present facts or current conditions included in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and the negative of such words and other words and terms of similar meaning, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q and in Part I, Item 1A. “Risk Factors” of our 2026 Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, we cannot guarantee future results, levels of activity, performance, or achievements. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
Overview
Intelligent Bio Solutions Inc. and its wholly owned Delaware subsidiary, GBS Operations Inc., were each formed on December 5, 2016, under the laws of the state of Delaware. The Company’s Australian subsidiary, Intelligent Bio Solutions (APAC) Pty Ltd, was formed on August 4, 2016, under the laws of New South Wales, Australia. On October 4, 2022, INBS acquired Intelligent Fingerprinting Limited (“IFP”), a company registered in England and Wales. Our headquarters are in New York City.
Intelligent Bio Solutions Inc. is a medical technology company focused on developing and delivering intelligent, rapid, non-invasive testing and screening solutions. The Company operates globally with the objective of providing innovative and accessible solutions that improve the quality of life.
Intelligent Bio Solutions Inc. is an authorized distributor of the SMARTOX SmarTest Patch. The SmarTest Patch is a discreet, water-resistant, and tamper-evident device worn on the skin for 7 to 10 days at a time, continuously collecting sweat to detect a broad range of substances, including cocaine, opiates, methamphetamine, marijuana, and fentanyl. The differing detection windows of the SmarTest Patch and the IFP System allow the Company to address both short- and long-term detection needs while maintaining a consistent, non-invasive, sweat-based approach.
| 16 |
The Company’s current product portfolio includes:
Intelligent Fingerprinting Platform: The Company’s current active product is the Intelligent Fingerprinting Platform, a proprietary portable system that analyzes fingerprint sweat using a single-use cartridge and a 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”). The IFP System is a non-invasive, fingerprint sweat-based diagnostic screening product designed to detect drugs of abuse, including opiates, cocaine, methamphetamine, 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 one minute, and a portable Intelligent Fingerprinting DSR-Plus analysis unit (the “IFP Reader”) that provides on-screen results in under ten minutes. Samples collected with a confirmatory kit may also be sent to a third-party laboratory service provider for confirmation testing. Customers include organizations in safety-critical industries such as construction and engineering, manufacturing, transport and logistics, mining, energy and utilities, government and public services, law enforcement and forensics, and the drug treatment and rehabilitation sector, as well as judicial organizations.
We plan to bring the IFP System to new markets and grow within existing markets concentrating on:
| ● | increasing market share across the United Kingdom and mainland Europe; | |
| ● | expanding sales and distribution throughout Australia, New Zealand and other countries in the Asia Pacific Region (“APAC Region”), and establishing the infrastructure and satisfying the regulatory requirements needed to do so; | |
| ● | pursuing FDA 510(k) clearance following our September 9, 2026, submission to the United States Food and Drug Administration (“FDA”); | |
| ● | initiating research aimed at broadening the capabilities of the IFP System to test for additional drugs and indications, facilitating the expansion of the platform into point-of-care medical testing; | |
| ● | expanding the IFP System into new customer segments, including major sporting organizations, law enforcement, and commercial airlines; and | |
| ● | developing a strategic network of distributors with established customer bases throughout the APAC Region, Europe and North America to distribute the IFP Products. |
Highlights of Achievements
Major highlights and achievements for the three months ended September 30, 2026:
| ● | As of September 30, 2026, the Company had a cash balance of approximately $5.93 million after raising approximately $5.0 million in fiscal Q1 (before deducting fees, discounts, closing costs, and other expenses payable by the Company) through a private placement offering. |
| ● | On September 9, 2026, the Company announced the submission of its 510(k) premarket notification to the U.S. Food and Drug Administration (FDA), seeking regulatory clearance of its Intelligent Fingerprinting Drug Screening System for detection of the opiate codeine. The Company believes the package represents the most comprehensive body of clinical evidence it has assembled to date. |
| ● | On September 1, 2026, the Company announced the results of its latest Method Comparison Study for its Intelligent Fingerprinting Drug Screening System to detect the opiate codeine. Conducted across three independent U.S. clinical sites, the study represented the most comprehensive evaluation of the System in the Company’s FDA 510(k) clinical study program. The study results showed substantially improved performance compared to the Company’s prior Method Comparison Study, announced in November of 2024. The System demonstrated accuracy above 98%, sensitivity above 94%, and specificity of 100% for the opiate codeine. |
| ● | On September 1, 2026, the Company announced that it had entered into a securities purchase agreement with a single existing institutional investor for expected gross proceeds to the Company of approximately $5.0 million, before deducting placement agent fees and other offering expenses payable by the Company. |
| ● | On August 17, 2026, the Company announced that its Intelligent Fingerprinting Drug Screening business had been recertified to the ISO 13485:2016 quality management system standard, the internationally recognized benchmark for medical device manufacturers. The recertification, issued by the British Standards Institution (BSI), is effective October 14, 2026, and will be valid for three years. |
| ● | On August 11, 2026, the Company announced the completion of its multi-site Method Comparison Study for the Intelligent Fingerprinting Drug Screening System. The Method Comparison Study was designed to show that typical users in occupational health, HR, and workplace safety can operate the Intelligent Fingerprinting Drug Screening System accurately and effectively in the field. The study evaluated this by measuring sensitivity, specificity, and accuracy in pre-employment and workplace screening environments, making it one of the most operationally relevant components of the Company’s FDA 510(k) submission. |
| ● | On August 5, 2026, the Company announced the completion of its Usability Study for the Intelligent Fingerprinting Drug Screening System, supporting its FDA 510(k) submission for U.S. market clearance for detection of the opiate codeine. The study was designed to evaluate how effectively operators could be trained to administer the Intelligent Fingerprinting Drug Screening System and how intuitively it could be used in a workplace setting. |
| ● | On August 3, 2026, the Company announced the completion of its Interference Study for the Intelligent Fingerprinting Drug Screening System. The study was designed to evaluate whether a range of external contaminants and substances commonly encountered in daily life and workplace environments affect the accuracy and reliability of the Intelligent Fingerprinting Drug Screening System. |
| ● | On July 23, 2026, the Company announced that it has addressed all the cybersecurity and software-related review items for its upcoming FDA 510(k) submission. This followed the Company’s recent completion of independent third-party penetration testing and confirmed that all review items had now been resolved. |
| ● | On July 21, 2026, the Company announced the completion of precision testing, a key component of its FDA 510(k) submission for U.S. market clearance of its Intelligent Fingerprinting Drug Screening System for detection of the opiate codeine. The precision testing confirmed that the Intelligent Fingerprinting Drug Screening System produced consistent, reliable results across varied manufacturing conditions and operating environments. |
| ● | The Company added 27 new customer accounts throughout fiscal Q1 2027. |
| 17 |
Results of Operations
Comparison of the Three Months Ended September 30, 2026 and 2025
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | 1,391,835 | $ | 1,111,797 | ||||
| Cost of revenue (exclusive of amortization shown separately below) | (633,831 | ) | (593,506 | ) | ||||
| Gross profit | 758,004 | 518,291 | ||||||
| Other income | ||||||||
| Government support income | 205,501 | 193,267 | ||||||
| Operating expenses | ||||||||
| Selling, general and administrative expenses | (2,579,641 | ) | (2,706,889 | ) | ||||
| Development and regulatory approval expenses | (829,544 | ) | (486,169 | ) | ||||
| Depreciation and amortization | (237,067 | ) | (257,907 | ) | ||||
| Impairment of long-lived assets | - | (261,780 | ) | |||||
| Total operating expenses | (3,646,252 | ) | (3,712,745 | ) | ||||
| Loss from operations | (2,682,747 | ) | (3,001,187 | ) | ||||
| Other income (expense), net | ||||||||
| Interest expense | (1,435 | ) | (2,309 | ) | ||||
| Realized foreign exchange loss | (5,344 | ) | - | |||||
| Interest income | 21,091 | 8,504 | ||||||
| Total other income, net | 14,312 | 6,195 | ||||||
| Net loss | (2,668,435 | ) | (2,994,992 | ) | ||||
| Net loss attributable to non-controlling interest | (10,133 | ) | (11,986 | ) | ||||
| Net loss attributable to Intelligent Bio Solutions Inc. | $ | (2,658,302 | ) | $ | (2,983,006 | ) | ||
| Other comprehensive (loss) income | ||||||||
| Foreign currency translation (loss) gain | (52,267 | ) | 48,716 | |||||
| Total other comprehensive (loss) income | (52,267 | ) | 48,716 | |||||
| Comprehensive loss | (2,720,702 | ) | (2,946,276 | ) | ||||
| Comprehensive loss attributable to non-controlling interest | (10,133 | ) | (11,986 | ) | ||||
| Comprehensive loss attributable to Intelligent Bio Solutions Inc. | $ | (2,710,569 | ) | $ | (2,934,290 | ) | ||
Revenue
Sales of goods
Revenue from sales continued its growth marking this our third consecutive quarter above $1 million and sixth consecutive quarter of year-over-year growth hitting a record quarter of sales of goods increasing by $280,038 to $1,391,835 for the three months ended September 30, 2026, from $1,111,797 for the three months ended September 30, 2025. This increase was primarily attributable to the addition of 27 new customers and an increase in the ongoing re-order rate for the consumables. The major driver of the growth was sales of cartridge consumables, which increased by $205,283 compared to the same period the prior year. This underscores the strength of our “razor-and-blades” business model of increasing the reader base to generate ongoing consumables revenue, and we will endeavor to grow this trajectory as we continue to expand our installed reader base into new markets in the future.
Cost of Revenue
Cost of revenue increased by $40,325 to $633,831 for the three months ended September 30, 2026, from $593,506 for the three months ended September 30, 2025. Cost of revenue relates to the direct labor, direct material costs and direct overhead costs incurred in the production of the goods. This increase is primarily attributable to higher direct manufacturing labor costs associated with additional hiring of factory workers in the U.K. and an increase in direct overhead costs.
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Gross profit
Gross profit increased by $239,713 to $758,004 for the three months ended September 30, 2026, from $518,291 for the three months ended September 30, 2025. This represents a year-on-year growth in gross profit from 46.62% to 54.46%, being largely because of a more profitable product mix including growth of cartridge sales.
Gross profit margin improvement during the period was primarily driven by strategic outsourcing of IFP Reader manufacturing, improved operational efficiencies, and increased sales volumes. Gross profit margin also benefited from our value-based pricing structure, which remained consistent during the period. We believe this pricing reflects customers’ recognition of the efficiency and return on investment offered by our fingerprint sweat screening technology compared with traditional testing methods. The improvement in gross profit margin also reflects continued operational discipline and a more favorable sales mix.
Contribution margin (non-GAAP)
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | 1,391,835 | $ | 1,111,797 | ||||
| Direct material cost | (278,959 | ) | (310,063 | ) | ||||
| Contribution margin (non-GAAP) | $ | 1,112,876 | $ | 801,734 | ||||
| Contribution margin % (non-GAAP) | 79.96 | % | 72.11 | % | ||||
Contribution margin is a non-GAAP measure of efficiency relating to direct variable costs such as materials and consumables. This increased by 7.85 percentage points (being an additional $311,142) to 79.96% for the three months ended September 30, 2026, from 72.11% for the three months ended September 30, 2025. This is a result of improved strategic manufacturing partnership for IFP Readers, production efficiency, better pricing of input costs due to better volumes 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)
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue (GAAP) | $ | 1,391,835 | $ | 1,111,797 | ||||
| Less: Cost of revenue (exclusive of amortization) (GAAP) | (633,831 | ) | (593,506 | ) | ||||
| Gross Profit (GAAP) | $ | 758,004 | $ | 518,291 | ||||
| Add: Direct labor cost | 313,838 | 269,198 | ||||||
| Add: Direct overhead cost | 41,034 | 14,245 | ||||||
| Contribution margin (non-GAAP) | $ | 1,112,876 | $ | 801,734 | ||||
| Contribution margin % (non-GAAP) | 79.96 | % | 72.11 | % | ||||
Government support income
Government support income increased by $12,234 to $205,501 for the three months ended September 30, 2026, from $193,267 for the three months ended September 30, 2025. This increase was primarily attributable to our intentional spending on research and development expenditures that qualify for reimbursement under certain government subsidies.
Operating expenses
Selling, general and administrative expenses
Selling, general and administrative expenses decreased by $127,248 to $2,579,641 for the three months ended September 30, 2026, from $2,706,889 for the three months ended September 30, 2025. The decrease in expenses is largely driven by lower marketing and investor relations expenses, partially offset by higher wages and salaries and higher legal expenses.
The major components of selling, general and administrative expenses are:
Marketing expenses
Marketing expenses were $319,086 for the three months ended September 30, 2026, compared to $624,579 for the same period the prior year. The decrease was primarily attributable to the Company’s transition to the next phase of its marketing strategy, resulting in reduced marketing expenditures while maintaining its focus on increasing brand awareness, strengthening its presence in existing markets, and expanding into new markets to support future revenue growth.
Wages and salaries
Wages and salaries were $1,108,759 for the three months ended September 30, 2026, compared to $1,013,829 for the same period the prior year. The components of this increase were related to additional costs incurred for sales staff remuneration and additional head count for marketing staff.
Legal expenses
Legal expenses were $200,376 for the three months ended September 30, 2026, compared to $194,269 for the same period the prior year. The components of this increase were related to higher general corporate legal and administrative costs, including legal services associated with capital-raising activities.
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Development and regulatory approval expenses
Development and regulatory approval expenses increased by $343,375 to $829,544 for the three months ended September 30, 2026, from $486,169 for the three months ended September 30, 2025. This increase is primarily attributable to the amounts spent on in-house R&D staff and timing of R&D work performed by the research partners. During the three months ended September 30, 2026, the Company completed precision testing, the Method Comparison Study, Interference Study and the Usability Study for the Intelligent Fingerprinting Drug Screening System, supporting its FDA 510(k) submission for U.S. market clearance for detection of the opiate codeine.
Depreciation and amortization
Depreciation and amortization decreased by $20,840 to $237,067 for the three months ended September 30, 2026 from $257,907 for the three months ended September 30, 2025. The decrease was primarily attributable to the completion of the amortization of customer relationships (intangible assets) in September 2025 resulting in no remaining carrying value for amortization during the three months ended September 30, 2026.
Impairment of long-lived assets
The impairment of long-lived assets decreased by $261,780 to $0 for the three months ended September 30, 2026, from $261,780 for the three months ended September 30, 2025. The decrease was primarily attributable to the settlement of the outstanding balance associated with the assets held for sale, resulting in no impairment charges being recognized during the current period.
Other income and expenses
Interest expense
Interest expense decreased by $874 to $1,435 for the three months ended September 30, 2026, from $2,309 for the three months ended September 30, 2025. The decrease was primarily attributable to the repayment in full of the notes payable during the third quarter of fiscal year 2025.
Realized foreign exchange (loss) gain
Realized foreign exchange (loss) gain decreased by $5,344 to a loss of $5,344 for the three months ended September 30, 2026, from nil for the three months ended September 30, 2025. The decrease was primarily attributable to unfavorable foreign currency exchange rates and fluctuations associated with transactions denominated in currencies other than the functional currencies of the Company and its subsidiaries.
Interest income
Interest income increased by $12,587 to $21,091 for the three months ended September 30, 2026, from $8,504 for the three months ended September 30, 2025. This increase was attributable to funds received from capital raising activities, which contributed to the balance on which interest was earned.
Liquidity and Capital Resources
We use working capital and cash measures to evaluate the performance of our operations and our ability to meet our financial obligations. We define working capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under US GAAP. This information is intended to provide investors with information about our liquidity. Other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.
Since our inception, we have financed our operations primarily through proceeds from public offerings and private placements of equity securities, warrant inducement transactions, existing trade and shareholder financing arrangements, and the incurrence of debt. As of September 30, 2026, we had $5,929,871 in cash and cash equivalents and working capital of $4,466,995.
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On September 18, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”). Pursuant to the terms of the ATM Agreement and under the 2024 ATM Prospectus Supplement (as defined below), the Company was originally permitted to sell, from time to time, through Ladenburg, as sales agent or principal, shares of the Company’s common stock with an initial aggregate sales price of up to $3.0 million. On March 11, 2025, the Company filed a second prospectus supplement (the “2025 March ATM Supplement”) in connection with the offer, sale, and issuance of up to $1,376,530 of shares of common stock pursuant to the ATM Agreement. Prior to the expiration of our “shelf” registration statement on Form S-3 (File No. 333-264218), which became effective on April 20, 2022 (“2022 Shelf”), any sale of shares pursuant to the ATM Agreement was made under the 2022 Shelf and the included base prospectus, and under the related prospectus supplement dated September 18, 2024 (the “2024 ATM Prospectus Supplement”), and the 2025 March ATM Supplement. On April 11, 2025, the Company filed a new “shelf” registration statement on Form S-3 (File No. 333-286489), which became effective on September 10, 2025 (“2025 Shelf”), and subsequently filed a prospectus supplement on September 18, 2025 (the “2025 September ATM Supplement”) in connection with the offer, sale, and issuance of up to $1,211,174 of shares of Company common stock pursuant to the ATM Agreement. On March 23, 2026, the Company filed a second prospectus supplement (the “2026 March ATM Supplement”) to the 2025 Shelf in connection with the offer, sale, and issuance of up to $3,966,316 of shares of common stock pursuant to the ATM Agreement. Following the expiration of the 2022 Shelf, any sale of shares pursuant to the ATM Agreement was made under the Company’s 2025 Shelf and the included base prospectus, and under the related 2025 September ATM Supplement and the 2026 March ATM Supplement.
During the period between September 18, 2024, through September 30, 2026, the Company raised approximately $4,288,649 (net of commissions of approximately $132,641 paid to Ladenburg) through the sale and issuance of 623,167 shares of Company common stock pursuant to the ATM Agreement. During the three months ended September 30, 2026, the Company raised approximately $265,373 (net of commissions of approximately $8,208 paid to Ladenburg) through the sale and issuance of 121,867 shares of Company common stock pursuant to the ATM Agreement.
Cash Flows
The following table summarizes our cash flows for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (2,752,991 | ) | $ | (2,846,825 | ) | ||
| Net cash used in investing activities | - | (70,401 | ) | |||||
| Net cash provided by financing activities | 4,684,036 | 3,558,165 | ||||||
| Effect of foreign exchange rates on cash and cash equivalents | 6,514 | (743 | ) | |||||
| Net increase in cash and cash equivalents | $ | 1,937,559 | $ | 640,196 | ||||
Cash used in operating activities
Our primary sources of operating cash are customer receipts from the sale of IFP Products and government support income. Our major operating cash expenditure includes employee-related costs, product development and regulatory approval expenses, sales and marketing, and general and administrative expenses. Operating cash flows are also affected by the timing and amount of collections from accounts receivable and payments to accounts payable.
Net cash used in operating activities decreased by $93,834 to $2,752,991 for the three months ended September 30, 2026, from $2,846,825 for the three months ended September 30, 2025. The decrease was primarily attributable to a decrease in net loss, non-cash adjustments and operating assets and liabilities.
Cash used in investing activities
Net cash used in investing activities decreased by $70,401 to $0 for the three months ended September 30, 2026, from $70,401 for the three months ended September 30, 2025. The decrease is primarily related to the investment in development of internal-use software (property and equipment) during the three months ended September 30, 2025.
Cash provided by financing activities
Cash provided by financing activities increased by $1,125,871 to $4,684,036 for the three months ended September 30, 2026, from $3,558,165 for the three months ended September 30, 2025. The increase was primarily attributable to proceeds from issuance and exercise of warrants from a private placement and issuance of common stock under the ATM Agreement.
September 2026 Private Placement - On August 31, 2026, the Company entered into a Securities Purchase Agreement with a single institutional investor for the sale of Series M Pre-Funded Warrants to purchase up to 2,036,659 shares of common stock, Series N-1 Warrants to purchase up to 2,036,659 shares of common stock and Series N-2 Warrants to purchase up to 2,036,659 shares of common stock in a private placement (the “September 2026 Private Placement”) that closed on September 2, 2026. Gross proceeds from the September 2026 Private Placement were approximately $5.0 million, before deducting placement agent fees and other offering expenses. If exercised in full for cash, the Series N-1 Warrants and Series N-2 Warrants, which have an exercise price of $2.33 per share, would provide additional gross proceeds of approximately $9.5 million, and the placement agent warrants, which have an exercise price of $3.06875 per share, would provide additional gross proceeds of approximately $0.3 million. However, there can be no assurance that any of these warrants will be exercised for cash, the Series N-1 Warrants may be called by the Company following FDA 510(k) clearance, and the Series N-2 Warrants are not exercisable unless and until shareholder approval of the issuance of the underlying shares is obtained. For more information, see Note 7 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
As of September 30, 2026, our principal contractual obligations include future minimum lease payments under operating leases for our facilities (total remaining lease payments of $2,887,153, as described in Note 6 to the unaudited condensed consolidated financial statements), a repayment obligation to the Australian Government related to a manufacturing facility grant (with total remaining repayments of $1,131,147, as described in Note 8 to the unaudited condensed consolidated financial statements), and remaining amounts due under our agreements for clinical study services (with total remaining payment of $1,357,742, as described in Note 8 to the unaudited condensed consolidated financial statements). In addition, we have ongoing payment obligations under advisory agreements which require monthly cash fees plus periodic issuances of restricted common stock.
The Company expects that its cash and cash equivalents as of September 30, 2026, will be insufficient to allow the Company to fund its current operating plan through at least the next 12 months from the issuance of these unaudited condensed consolidated financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date these unaudited condensed consolidated financial statements are issued. Accordingly, the Company will be required to raise additional funds during the next 12 months.
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. 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.
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Smaller Reporting Company Status
We ceased to qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), at the end of fiscal year 2026, but we continue to be a “smaller reporting company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
We will continue to qualify as a smaller reporting company if, as determined annually, either (i) the market value of our voting and non-voting common equity held by non-affiliates is less than $250 million as of the last business day of our most recently completed second fiscal quarter, or (ii) our annual revenues are less than $100 million for our most recently completed fiscal year for which audited financial statements are available and the market value of our voting and non-voting common equity held by non-affiliates is less than $700 million as of the last business day of our most recently completed second fiscal quarter. If we determine that we no longer qualify as a smaller reporting company, we will no longer be able to use the scaled disclosure accommodations beginning with our Quarterly Report on Form 10-Q for the first fiscal quarter of the following fiscal year. Once we lose smaller reporting company status, we will not regain it unless, in a later annual determination, we meet the requalification thresholds in Rule 12b-2, which are lower than the initial thresholds for the criteria we exceeded.
Off-Balance Sheet Arrangements
As of September 30, 2026, we did not have any off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions. Predicting future events is inherently an imprecise activity and, as such, requires the use of significant judgment. Actual results may differ from our estimates in amounts that may be material to the financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our unaudited condensed consolidated financial statements.
For information on our critical accounting policies, estimates, and judgments, see Note 3, Summary of Significant Accounting Policies, included in Item 8 of Part II of our 2026 Form 10-K.
Recently Issued Accounting Pronouncements
For the impact of recently issued accounting pronouncements on the Company’s unaudited condensed consolidated financial statements, see Note 3 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and incorporated herein by reference.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. We are not currently engaged in any material legal proceedings.
ITEM 1A. RISK FACTORS
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our 2026 Form 10-K, except for risks described below. Any of those risk factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
If we are unable to maintain compliance with the listing requirements of the Nasdaq Capital Market, our common stock may be delisted from the Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it more difficult for you to trade in our securities.
Our common stock is listed on the Nasdaq Capital Market, and we are therefore subject to its continued listing requirements, including requirements with respect to the market value of publicly held shares, market value of listed shares, a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), and minimum stockholders’ equity, among others, and requirements relating to board and committee independence. If we fail to satisfy one or more of the requirements, we may be delisted from the Nasdaq Capital Market. The last sale price of our shares of common stock on November 6, 2026, was $1.97 per share.
We have in the past, and we may again in the future, fail to comply with the continued listing requirements of the Nasdaq Capital Market (including the Minimum Bid Price Requirement), which would subject our common stock to being delisted. Delisting from the Nasdaq Capital Market would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities.
We will need to raise additional capital to fund our operations in the future. If we are unsuccessful in attracting new capital, we may not be able to continue operations or may be forced to sell assets to do so. Alternatively, capital may not be available to us on favorable terms, or at all. If available, financing terms may lead to significant dilution of our stockholders’ equity.
We are not profitable and have had negative cash flow from operations since our inception. To fund our operations and to develop and commercialize our products (including the IFP System), we have relied primarily on equity and some debt financing and government support income. The Company believes there is material risk that its cash and cash equivalents as of September 30, 2026, of $5,929,871 will be insufficient to allow the Company to fund its current operating plan through at least the next 12 months from the issuance of its unaudited condensed consolidated financial statements for the three months ended September 30, 2026. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date these unaudited condensed consolidated financial statements are issued. Accordingly, the Company will be required to raise additional funds during the next 12 months. However, there can be no assurance that when the Company requires additional financing, such financing will be available on terms which are favorable to the Company, or at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay or reduce the scope of its research programs and/or limit or cease its operations. In addition, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.
To obtain the additional capital necessary to fund our operations, we expect to finance our cash needs through public or private equity offerings, debt financing and/or other capital sources. Even if capital is available, it might be available only on unfavorable terms. Any additional equity or convertible debt financing into which we enter could be dilutive to our existing stockholders. Any future debt financing into which we enter may impose covenants upon us that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, we may need to relinquish rights to our technologies or our products or grant licenses on terms that are not favorable to us. If access to sufficient capital is not available as and when needed, our business will be materially impaired and we may be required to cease operations, curtail one or more product development or commercialization programs, scale back or eliminate the development of business opportunities, or significantly reduce expenses, sell assets, seek a merger or joint venture partner, file for protection from creditors or liquidate all of our assets. Any of these factors could harm our operating results.
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The exercise of our outstanding warrants would result in substantial dilution to our existing stockholders and could cause the market price of our common stock to decline.
As of September 30, 2026, there were warrants outstanding to purchase 12,045,102 shares of our common stock (with a weighted-average exercise price of $3.64 per share and that terminate between 2026 and 2031), including the Series M Pre-Funded Warrants, Series N-1 Warrants, Series N-2 Warrants and placement agent warrants issued in connection with the September 2026 Private Placement, compared to 3,316,803 shares of common stock outstanding as of such date. The number of shares issuable upon exercise of our outstanding warrants is more than three times the number of shares of our common stock currently outstanding. The exercise of these warrants would result in substantial dilution to our existing stockholders. In addition, the shares issuable upon exercise of the warrants issued in the September 2026 Private Placement have been registered for resale, and the sale of a substantial number of these shares in the public market, or the perception that such sales could occur, could cause the market price of our common stock to decline and could impair our ability to raise additional capital through the sale of equity securities.
Our 510(k) premarket notification for the Intelligent Fingerprinting Drug Screening System may not be cleared by the FDA on a timely basis, or at all.
On September 9, 2026, we submitted a 510(k) premarket notification to the FDA seeking regulatory clearance of our Intelligent Fingerprinting Drug Screening System for detection of the opiate codeine. The FDA may issue an Additional Information request in connection with its review of our 510(k) submission, may determine that a new 510(k) submission is required, or may issue a not substantially equivalent determination. If the FDA does not clear our 510(k) submission on a timely basis, or at all, our ability to commercialize the Intelligent Fingerprinting Drug Screening System in the United States beyond Forensic Use Only settings, and to realize the potential benefits of FDA clearance, could be delayed or adversely affected, which could have a material adverse effect on our business, financial condition, results of operations and the market price of our common stock.
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As a smaller reporting company, we continue to be eligible to utilize certain reduced disclosure requirements, and we cannot be certain if our use of such scaled disclosure requirements will make our common stock less attractive to investors.
On June 30, 2026 (the last day of the fiscal year following the fifth anniversary of our initial public offering), we ceased to qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. As a result, we will no longer be able to rely on certain exemptions from various reporting and governance requirements that were available to us, including reduced disclosure obligations regarding executive compensation (except to the extent such accommodations are also available to smaller reporting companies) and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. However, we continue to be a “non-accelerated filer” and, for so long as we remain a non-accelerated filer, we will remain exempt from the auditor attestation requirement for internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act.
In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we were not subject to the same new or revised accounting standards as other public companies during the period we were an emerging growth company. As a result, our financial statements while we were an emerging growth company may not be comparable to companies that complied with new or revised accounting pronouncements as of public company effective dates.
We will continue to qualify as a smaller reporting company if, as determined annually, either (i) the market value of our voting and non-voting common equity held by non-affiliates is less than $250 million as of the last business day of our most recently completed second fiscal quarter, or (ii) our annual revenues are less than $100 million for our most recently completed fiscal year for which audited financial statements are available and the market value of our voting and non-voting common equity held by non-affiliates is less than $700 million as of the last business day of our most recently completed second fiscal quarter. If we determine that we no longer qualify as a smaller reporting company, we will no longer be able to use the scaled disclosure accommodations beginning with our Quarterly Report on Form 10-Q for the first fiscal quarter of the following fiscal year. Once we lose smaller reporting company status, we will not regain it unless, in a later annual determination, we meet the requalification thresholds in Rule 12b-2, which are lower than the initial thresholds for the criteria we exceeded.
As a smaller reporting company, we are eligible to take advantage of many of the same scaled disclosures available to emerging growth companies, including scaled executive compensation disclosures. In addition, as a non-accelerated filer, we are exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We have elected to utilize the accommodations available to smaller reporting companies. Until we cease to be a smaller reporting company, the scaled disclosure in our SEC filings will result in less information about our company being available than for public companies that are not smaller reporting companies.
We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Other than sales previously reported in the Company’s Current Reports on Form 8-K, the Company did not sell any unregistered securities during the period covered by this report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 trading arrangements
During
the period covered by this Quarterly Report, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under
the Exchange Act) has
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ITEM 6. EXHIBITS
| Exhibit No. | Description | |
| 3.1 | Second Amended and Restated Bylaws of Intelligent Bio Solutions Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on October 13, 2026). | |
| 4.1 | Form of Series N-1 Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 2, 2026). | |
| 4.2 | Form of Amended Series N-2 Warrant (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 2, 2026). | |
| 4.3 | Form of Amended Series M Pre-Funded Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 2, 2026). | |
| 4.4 | Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the Commission on September 2, 2026). | |
| 10.1 | Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 2, 2026). | |
| 10.2 | Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 2, 2026). | |
| 10.3 | Placement Agency Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 2, 2026). | |
| 31.1# | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2# | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1# | Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2# | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS# | Inline XBRL Instance Document. | |
| 101.SCH# | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL# | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF# | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB# | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE# | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104# | Cover Page Interactive Data File (formatted in XBRL and included in Exhibit 101). |
# Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Intelligent Bio Solutions Inc. | ||
| Date: November 10, 2026 | By: | /s/ Harry Simeonidis |
| HARRY SIMEONIDIS | ||
| CHIEF EXECUTIVE OFFICER AND PRESIDENT | ||
| (Principal Executive Officer) | ||
| Date: November 10, 2026 | By: | /s/ Spiro Sakiris |
| SPIRO SAKIRIS | ||
| CHIEF FINANCIAL OFFICER | ||
| (Principal Financial Officer) | ||
| 27 |