UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
(Mark
One)
For
the fiscal year ended June 30, 2025
or
For
the transition period from _____ to _____
Commission
File Number 001-39825
Intelligent
Bio Solutions Inc.
(Exact
name of Registrant as specified in its Charter)
Intelligent Bio Solutions Inc.,
(Address of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (646)828-8258
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.01 per share INBS The Nasdaq Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). YES ☒ NO ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒
The
aggregate market value of the Common Stock (based on the closing price of these shares on the Nasdaq Stock Market) on December 31, 2024,
the last business day of the registrant’s most recently completed second fiscal quarter, held by nonaffiliates, was $6,585,683.
As of August 12, 2025, there were 8,979,152
of the registrant’s Common Stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Table
of Contents
Page
PART I
Item 1. Business 3
Item 1A. Risk Factors 15
Item 1B. Unresolved Staff Comments 39
Item 1C. Cybersecurity 39
Item 2. Properties 40
Item 3. Legal Proceedings 40
Item 4. Mine Safety Disclosures 40
PART II
Item 6. Reserved 42
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 52
Item 8. Financial Statements and Supplementary Data 52
Item 9A. Controls and Procedures 52
Item 9B. Other Information 53
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspection 53
PART III
Item 10. Directors, Executive Officers and Corporate Governance 54
Item 11. Executive Compensation 62
Item 14. Principal Accounting Fees and Services 71
PART IV
Item 15. Exhibits, Financial Statement Schedules 72
Signatures 78
ii
PART
I
Cautionary
Note Regarding Forward-Looking Statements
All
statements other than statements of historical fact or relating to present facts or current conditions included in this Annual Report
on Form 10-K 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
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 Annual Report on Form 10-K 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 “Risk Factors.” 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 form may not occur and actual results could differ materially and adversely from those anticipated
or implied in the forward-looking statements.
You
should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking
statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable,
we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by the federal securities laws,
we are under no duty to update any of these forward-looking statements after the date of this Annual Report on Form 10-K or to confirm
these statements to actual results or revised expectations.
In
this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “Company,” or “INBS”
refer to Intelligent Bio Solutions Inc. together with its wholly owned subsidiaries.
ITEM
1. 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
and was renamed to Intelligent Bio Solutions (APAC) Pty Ltd on January 6, 2023. On October 4, 2022, INBS acquired Intelligent Fingerprinting
Limited (“IFP”), a company registered in England and Wales. The Company’s headquarters are in New York, New York.
Intelligent
Bio Solutions Inc. is a medical technology company focused on developing and delivering intelligent, rapid, non-invasive testing and
screening solutions. The Company operates globally with the objective of providing innovative and accessible solutions that improve the
quality of life.
Our
Testing Platforms
Intelligent Fingerprinting Platform:
The Company’s current active product is the Intelligent Fingerprinting Platform, which consists of the proprietary portable
platform that analyzes fingerprint sweat using a one-time cartridge and portable handheld reader. The flagship product from this
platform, which is commercially available in certain countries outside of the United States, is the Intelligent Fingerprinting Drug
Screening System (the “IFP System” or “IFP Products”), a two-part system that consists of non-invasive,
fingerprint sweat-based diagnostic testing products designed to detect drugs of abuse including opiates, cocaine, methamphetamines,
benzodiazepines, cannabis, methadone, and buprenorphine. The IFP System comprises a small, tamper-evident drug screening cartridge
onto which ten fingerprint sweat samples are collected in under a minute before the portable analysis unit provides an on-screen
result in under ten minutes. Samples collected with a confirmatory kit can also be sent to a third-party laboratory service provider
for confirmation testing. Customers include safety-critical industries such as construction, transportation and logistics, mining,
manufacturing, engineering, drug treatment organizations in the rehabilitation sector, and 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;
Biosensor Platform: Under the terms
of an Amended and Restated License Agreement dated September 12, 2019 (the “BPT License Agreement”), between the Company
and Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or “Licensor”), the Company held an exclusive license
in the Asia Pacific Region (“APAC Region”) to the Licensor’s proprietary rights to the biosensor technology (the
“Biosensor IP”) used in the biosensor platform we refer to as the Biosensor Platform Technology (“BPT”), or
simply the “Biosensor Platform”. This platform consists of a small, printable modified organic thin-film transistor
strip designed to detect multiple biological analytes by substituting the top enzyme layer of the biosensor to suit each analyte. We
refer to products that use the BPT as the “Licensed Products”. This platform technology has the potential to develop a
range of Point of Care Tests. We understand that following the appointment of a liquidator to LSBD on July 21, 2023, the Biosensor
IP we licensed from LSBD has reverted back to the University of Newcastle. Following our ongoing discussions with the University, it
is the Company’s understanding that the University of Newcastle cannot finalize licensing of the Biosensor IP until the
liquidation of LSBD is complete. As the timeline for the completion of LSBD’s liquidation is unknown, the Company does not
expect any updates or finalization of any license terms until this occurs. As a result, further development of the BPT has been
postponed until we are able to finalize licensing arrangements related to the BPT. For more information regarding our licensing
agreements with LSBD, see “Item 1. Business - Technology License Agreements.”
Reportable
Segments
The businesses discussed in this Annual Report
on Form 10-K reflect the reportable segments that existed through the fiscal year ended June 30, 2025. Effective June 30, 2025, we revised
our reportable segments to a region-focused structure, aligning with changes in our business and organizational structure. This transition
was driven by several key developments, including the end of a project for the construction of a manufacturing facility in Australia during
the fourth fiscal quarter and decision by management to not pursue the BPT any further on until the liquidation of the LSBD is complete
following the reversion of intellectual property rights (BPT related) to the University of Newcastle after the liquidation of the former
licensor. These events prompted a reassessment of the Company’s operating model and strategic priorities, resulting in the adoption
of a region-based segment reporting structure that better aligns with the geographic focus of the business and how management evaluates
performance and allocates resources.
Our
new reportable segments are: (i) United Kingdom; (ii) Asia Pacific (APAC); (iii) Americas; and (iv) Rest of World. These new reportable
segments reflect how the Company is currently managed and correspond to the manner in which financial information is reviewed by our
Chief Operating Decision Maker (CODM) for resource allocation and performance assessment.
Historical
segment reporting, which was based on products—(i) Commercially Available Intelligent Fingerprinting Products (“IFPG”
or “IFPG segment”), and (ii) Development-Stage Biosensor Platform Technology (“BPT segment”)—has been recast
in this filing to reflect the new structure.
Note 4, “Segment Reporting”, in the
Notes to Consolidated Financial Statements included in Item 8 of this report provides information on revenue, government support income,
net income (loss), long-lived assets, and inventory by our revised segments.
Highlights
of Achievements and Developments
Our
major highlights of achievements for the fiscal year 2025:
● The Company added 115 new customer accounts throughout the fiscal year 2025.
Our Products
Intelligent
Fingerprinting Drug Screening System
Our wholly owned subsidiary, Intelligent Fingerprinting
Limited (IFP), is the developer and owner of our proprietary and commercially available portable drug screening system designed to detect
common drugs of abuse through fingerprint sweat. The IFP System consists of a small, tamper-evident drug screening cartridge that collects
ten fingerprint sweat samples, which are then analyzed in a portable handheld reader for precise on-screen results in minutes. This system
eliminates the need for invasive and unpleasant urine, saliva, or blood collection to test for substance abuse. The ten samples are collected
in under a minute before the portable analysis unit provides an on-screen result in under ten minutes. The IFP System is currently designed
to detect opioids, cocaine, methamphetamines, benzodiazepines, cannabis, methadone, and buprenorphine. In addition, samples collected
via confirmatory kits can be sent to a third-party laboratory service provider for confirmation testing.
Intelligent
Fingerprinting Drug Screening System Functionality
The IFP System consists of single-use, tamper-evident
Intelligent Fingerprinting Cartridges for sample collection and the portable Intelligent Fingerprinting DSR-Plus portable analysis unit.
The cartridge is inserted into a reader, and within 10 minutes, the results are displayed, with options to print and save anonymized data
for further use. Results can also be downloaded to a computer and be used for, among other things, and to the extent legally permissible,
integration with employee medical records or for general statistical analysis. Results can also be downloaded to a computer and be used
for, among other things, and to the extent legally permissible, integration with employee medical records or for general statistical analysis.
History
and Background of the Intelligent Fingerprinting Drug Screening System
Founded in 2007, IFP is a spin-out company from
the University of East Anglia (UEA) and is based in Cambridge, England. IFP developed and commercialized the patented Intelligent Fingerprinting
DSR-Plus Reader and Cartridge system, which has been predominantly sold in the United Kingdom, mainland Europe and the Middle East. IFP
continues to manufacture the cartridges for the IFP System in its factory in Cambridge, England.
Research
and Development
Our
research and development (R&D) team collaborates with external specialist organizations across jurisdictions to conduct comprehensive
R&D initiatives. These collaborative efforts are currently driven by the following primary objectives:
1.Enhancing the Reader: This involves integrating wireless connectivity, data collection capabilities, and important system architecture improvements such as miniaturization, extended battery life, and a refined touch-screen interface for a seamless user experience.
2.Expanding testing capabilities: The focus is on enabling the current cartridges to detect highly relevant substances in today’s pharmaceutical landscape, such as fentanyl and oxycodone.
3. Exploring
new tests in the medical point of care domain: This initiative aims to explore potential new tests within the medical point of care domain,
resulting in a broader range of diagnostic tools for healthcare providers.
To
facilitate the expansion of point-of-care testing into additional areas of interest, such as tumor markers, hormones, and allergies,
the core team will collaborate with external research specialists. This joint exploration aims to unlock the untapped potential applications
of the existing lateral flow assay technology on which the Intelligent Fingerprinting Platform has been developed. By expanding the capabilities
of this platform, the Company will be better equipped to address diverse diagnostic needs and contribute to improved patient outcomes.
Regulatory
Matters
The
Company operates in a highly regulated industry. Its current and future business has been and will continue to be subject to a variety
of laws globally regarding quality, safety, efficacy, and governing, among other things, clinical evaluations, marketing authorization,
commercial sales, and distribution of our products.
Internationally,
various regulatory bodies monitor and supervise the administration of pharmaceutical products and medical devices and equipment. Their
primary responsibilities include evaluating, registering and approving new drugs, generic drugs and imported drugs; approving and issuing
permits for the manufacture, export and import of pharmaceutical products and medical appliances; approving the establishment of enterprises
for pharmaceutical manufacture and distribution; formulating administrative rules and policies concerning the supervision and administration
of food, cosmetics and pharmaceuticals; and handling significant accidents involving these products.
The
Company will be subject to numerous post-marketing regulatory requirements, which may include labelling regulations and medical device
reporting regulations, and which may require it to report to different regulatory agencies if its device causes or contributes to a death
or serious injury or malfunctions in a way that would likely cause or contribute to a death or serious injury. The Company may be subject
to further regulations regarding import and export restrictions, tariff regulations, and duties and tax requirements. These regulatory
requirements may change in the future.
The
Company’s research, development and manufacturing operations, including its product assembly line in Cambridge, UK, involve the
use of hazardous substances, and consequently, it is subject to a variety of foreign environmental laws and regulations relating to the
storage, use, handling, generation, manufacture, treatment, discharge and disposal of hazardous substances. The Company’s products
may also contain hazardous substances and they are subject to laws and regulations relating to labelling and to their sale, collection,
recycling, treatment, storage, and disposal. Compliance with these laws and regulations may be expensive and noncompliance could result
in substantial fines and penalties. Environmental laws and regulations also impose liability for the remediation of releases of hazardous
substances into the environment and for personal injuries resulting from exposure to hazardous substances, and they can give rise to
substantial remediation costs and to third-party claims, including for property damage and personal injury. Liability under environmental
laws and regulations can be joint and several and without regard to fault or negligence, and they tend to become more stringent over
time, imposing greater compliance costs and increased risks and penalties associated with violations.
Our
R&D, manufacturing facilities and operations for drug screening products must also adhere to stringent quality criteria, complying
with ISO 13485 for In Vitro Diagnostic Devices and Medical Devices, as well as ISO 9001. We have quality and regulatory oversight of
our sub-contracted reference laboratories, where our methodology is accredited by the United Kingdom Accreditation Service (UKAS), ensuring
that the laboratory operates according to the ISO 17025 standard.
Australia: While we
are already permitted to sell the IFP System as a drug screening device in Australia, we have obtained accreditation from NATA (National
Association of Testing Authorities, Australia).
We
have partnered with Racing Analytical Services Limited (RASL), one of Australia’s largest independent drug testing laboratories,
to provide confirmation tests for our drug screening solutions.
United States of America:
We are currently navigating our regulatory pathway in the United States as we seek approval to sell the IFP System in the United States.
We completed a 510(k) submission in December 2024, and remain focused on securing FDA 510(k) clearance for the IFP System’s opiate
test system for codeine in the U.S., which will enable broader use beyond current Forensic Use Only settings. Additionally, we must identify
potential laboratory partners for further certifications and studies that may be necessary. In fiscal 2025, the Company advanced its regulatory
strategy through increased engagement with regulatory consultants, refined clinical study design, and the generation of new scientific
and clinical data to support its submission. We anticipate that obtaining FDA clearance will benefit entry into other regions of the world.
Other
Regions: Distributors in other countries and jurisdictions will be responsible for obtaining all necessary approvals within their
respective territories.
Manufacturing
The
equipment and facilities required to produce the Intelligent Fingerprinting Drug Screening Cartridge and DSR-Plus Reader are in place
at our manufacturing facility in Cambridge, UK, which is used for fabrication and quality control. The facility operates a Quality Management
System that complies with the requirements of ISO 13486 for the design, development, manufacture, distribution, servicing and supply
of devices and readers designed to screen for drugs of abuse using fingerprint diagnostic technology; design, development, manufacture,
distribution, servicing and supply of devices for collection of fingerprint samples used to detect drugs of abuse; and the design, development,
manufacture, distribution, servicing and supply of in vitro diagnostic kits for the detection of viral infection antigens in human saliva
and anterior nares samples. The facility further operates a quality management system that complies with the requirements of ISO 9001
for the design, development, manufacture, distribution, servicing and supply of devices and readers designed to screen for drugs of abuse
using fingerprint diagnostic technology and the design, development, manufacture, distribution, servicing, and supply of devices for
collection of fingerprint samples used to detect drugs of abuse.
Distribution
and Sales
We
currently serve over 450 small to medium-sized businesses, primarily located in the United Kingdom, with additional customers across
various global locations. We intend to expand our customer base by strengthening our presence in existing markets and, subject to receiving
necessary regulatory approvals and clearances, venture into new regions. We will tailor our strategy to the targeted region, establishing
direct sales and marketing teams or utilizing distribution networks. In some cases, a combination of these strategies may be appropriate.
Distributors:
Through buy-sell agreements, distributors will purchase the IFP Products and resell them to customers. These distributors can be
exclusive or non-exclusive, depending on the agreed arrangement. We plan to focus on distributors with existing customer networks in
the drug screening segment and a proven track record in their territories. We also plan to utilize exclusive distributors who will be
the sole providers within certain defined territories and will need to satisfy certain minimum quarterly purchase requirements.
United
Kingdom: Our direct sales team consists of four sales representatives and a National Sales Manager under the direction of the Global
Vice President of Sales. The team utilizes telemarketing leads and a variety of other inbound lead-generation tactics to connect with
new businesses and schedule on-site and virtual product demonstrations. The UK team includes a Customer Experience Team that manages
account relationships, product support, training and sales administration. New customer accounts are assigned to sales representatives
based on geographic territories.
Australia:
We utilize a third-party sales agency under the direction of the Vice President of Global Sales. The agency’s primary area
of focus is the east coast of Australia, comprising approximately 72% of the country’s population. The agency’s team utilizes
their extensive network of existing contacts and relationships to introduce the IFP products through in-person demonstrations. We also
intend to utilize distributor partnerships to cover regions such as Western Australia, South Australia, and more remote areas.
United
States: During our 510(k) premarket submission and subject to receiving appropriate approvals/clearance from the FDA, we plan to
appoint a dedicated distribution leader to spearhead market entry strategies by identifying and selecting distributors and partners.
Our focus will be identifying distributors and partners already operating within the U.S. drug screening market.
European
Expansion: We will appoint a dedicated European representative to identify, negotiate, and sign distributor agreements and maximize
sales in target territories.
Expanding
into the Middle East and Africa (“MEA”): Our Vice President of Global Sales and the dedicated European representative
will initially manage MEA operations. Depending on market opportunities and sales volume, the Company may appoint a dedicated distribution
leader for MEA operations at a later stage.
Market
Analysis and Opportunity
The
Drug Screening Market
The
drug screening market encompasses various sectors, including workplaces, drug rehabilitation, drug testing labs, criminal justice, law
enforcement, schools and colleges, pain management centers, the military, medical examiners, individual users, and sporting organizations.
We intend to aggressively market IFP Products to different geographical regions outside the UK, with a focus on the industries and segments
noted above.
Drug
misuse is a global concern, and while the approach to this problem varies depending on the legal and regulatory landscape of each country,
what remains constant is the need for regular testing, particularly in areas and industries of concern. Even in regions where certain
drugs, such as cannabis, have been decriminalized (such as in various states across the United States, Canada, and Europe), social and
workplace challenges persist relating to impairment, drug dependency and associated criminal activity, which increase the need for testing.
Point
of Care / Rapid Diagnostics Market
According
to the Point of Care/Rapid Diagnostics Market report by MarketsandMarkets1, the global Point of Care (POC) diagnostics
market was valued at $45.36 billion in 2022 and is projected to reach $75.46 billion by 2027, at a compound annual growth rate (CAGR)
of 10.7%. Growth is largely driven by increasing decentralization in healthcare, demand for faster diagnostic turnaround, and rising adoption
of lateral flow assays, particularly in home care and workplace environments. Notably, the lateral flow assays segment accounted for the
largest share of the market in 2021 and is projected to grow from $28.76 billion in 2022 to $47.37 billion by 2027, at a CAGR of 10.5%.
This technology continues to dominate due to its speed, ease of use, and portability.
Within
this broader landscape, drug screening has emerged as a high-growth category. Our fingerprint sweat-based drug screening technology leverages
lateral flow technology, aligning it directly with this high-growth segment. A 2024 MarketsandMarkets report estimates the global drug
screening market will reach $19.5 billion by 2029, growing at a CAGR of 16.6%1. In the employer and workplace drug testing
segment, Grand View Research estimates the global market size at $5.90 billion in 2023, with an expected CAGR of 4.5% from 2024 to 2030,
reaching approximately $7.96 billion by 20302. Specifically, in the United States, the employer and workplace drug testing
market was valued at $2.47 billion in 2023 and is projected to grow at a CAGR of 5.1% from 2024 to 20303.
These
trends support our mission to provide reliable, scalable, and dignified fingerprint sweat-based drug testing solutions offering a strategic
fit with growing demand for on-site, non-invasive screening in safety-critical industries. We also intend to expand into adjacent areas
of medical diagnostics by leveraging its core lateral flow platform technology and technical capabilities. This strategic focus aims
to unlock broader healthcare applications and deliver a differentiated alternative to conventional testing methodologies, offering greater
speed, accessibility, and efficiency.
There
are four primary categories of recreational drugs: analgesics, depressants, stimulants, and hallucinogens. Analgesics include narcotics
like heroin, morphine, fentanyl, and codeine. Depressants include alcohol, barbiturates, benzodiazepines, and nicotine. Stimulants include
cocaine, methamphetamine, and ecstasy (MDMA). Hallucinogens include LSD, psilocybin and ketamine.
According
to the 2024 World Drug Report published by the United Nations Office on Drugs and Crime, the emergence of new synthetic opioids and a
record supply and demand of other drugs has compounded the impacts of the world drug problem, leading to a rise in drug use disorders
and environmental harms. Approximately 292 million people used drugs worldwide in 2022, a 20% increase over the previous decade. Cannabis
remains the world’s most used drug, with 228 million users. Opioid use remains a major concern, with 60 million users, followed
by amphetamines (30 million users), cocaine (23.5 million users), and ecstasy (20 million users). Nitazenes, a group of synthetic opioids
which can be even more potent than fentanyl, have recently emerged in several high-income countries, resulting in an increase in overdose
deaths. Though an estimated 64 million people worldwide suffer from drug use disorders, only one in 11 is in treatment4.
According to the 2022 National
Survey on Drug Use and Health (NSDUH), approximately 54.6 million people aged 12 or older in the U.S. needed substance use treatment in
2022. Of those, only 13.1 million received any form of treatment5. To address this treatment gap, the White House’s 2024
National Drug Control Strategy Performance Review highlights more than $82 billion in federal investments in treatment and harm reduction
services6.
1
MarketsandMarkets 2024, Drug & Alcohol Screening Market by Product, Sample Type, End User & Region – Global Forecast
to 2029, available at: https://www.marketsandmarkets.com/Market-Reports/drug-alcohol-screening-market-162987773.html.
2
Grand View Research 2024, Employer and Workplace Drug Testing Market Size, Share & Trends Analysis Report By Services, By
Sample Type, By End-use, By Region, And Segment Forecasts, 2024 - 2030, available at: https://www.grandviewresearch.com/industry-analysis/employer-workplace-drug-testing-market-report.
3
Grand View Research 2024, U.S. Employer and Workplace Drug Testing Market Size, Share & Trends Analysis Report By Services, By
Sample Type, By End-use, By Region, And Segment Forecasts, 2024 - 2030, available at: https://www.grandviewresearch.com/industry-analysis/us-employer-workplace-drug-testing-market-report.
4
United Nations Office on Drugs and Crime (UNODC) 2024, UNODC World Drug Report 2024: Harms of world drug problem continue to mount
amid expansions in drug use and markets, available at: https://www.unodc.org/unodc/en/press/releases/2024/June/unodc-world-drug-report-2024_-harms-of-world-drug-problem-continue-to-mount-amid-expansions-in-drug-use-and-markets.html.
5
Substance Abuse and Mental Health Services Administration (SAMHSA) 2023, 2022 National Survey on Drug Use and Health (NSDUH) National
Report, U.S. Department of Health and Human Services, Center for Behavioral Health Statistics and Quality, available at: https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
6
Executive Office of the President, Office of National Drug Control Policy (ONDCP) 2024, National Drug Control Strategy: Performance
Review System Report, December 2024, The White House, Washington, D.C., available at: https://www.whitehouse.gov/wp-content/uploads/2024/04/ONDCP_NDCS-2024-Performance-Review-System-Report_Final.pdf.
Intellectual
Property
The
following patents are owned by IFP.
Primary
Patent Families - technologies that are either used in the commercial products or closely related to the commercial products.
Patent Numbers and Geographical Coverage Description Expiry
Secondary / Tertiary Patent Families
The
patents listed above cover virtually all aspects of fingerprint diagnostics including: chemistry, screening cartridge technology, collection
cartridge technology, fingerprint quantitation, fingerprint controlled medication dispenser, lab testing of fingerprints, accessories,
and lateral flow test strip reader.
Competition
IFP
has developed a Point of Care (POC) drug screening test system and a drug laboratory-based confirmation testing service. Both of these
involve the collection of fingerprint sweat samples for analysis. For many years, competitor POC and confirmation tests relied on collecting
either urine or oral fluid (saliva) samples. There are several competitive advantages of analyzing fingerprint sweat over urine and oral
fluid drug testing:
The
combination of these benefits shows that fingerprint drug testing provides a more cost-effective, less invasive and more dignified method
when compared to urine and oral fluid-based tests.
The table below compares the IFP System to other
drug testing systems:
The
IFP System eliminates the need for highly trained technicians or personal protective equipment, providing a non-invasive and objective
testing experience. Its unique 16-hour detection window makes it ideal for assessing an individual’s fitness for work at the time
of testing. Based on research commissioned by the Company, the system has the ability to achieve sensitivity and accuracy levels as demonstrated
by the performance characteristics in the table below.
We
believe that the lateral flow assay technology used in IFP Products has the potential to also deliver significant benefits in other areas
of medical diagnostics. For example, the potential exists use the technology to detect biomarkers of health and disease and provide non-invasive
monitoring of therapeutic drug levels via fingerprint analysis. IFP is also researching a pipeline of development projects with the vision
that fingerprint-based diagnostic tests could provide rapid health/disease triage and wellness tests, meeting the requirements of a post-COVID
medical diagnostics world. The Company seeks to broaden development pathways into other areas of medical diagnostics utilizing existing
technology and techniques to exploit a competitive advantage against traditional testing methodologies. Some examples of potential target
assays are: fentanyl and other opiate pain medications, epilepsy management medications, anti-psychotic medications, cortisol (stress
marker for wellbeing determination), protein targets, diabetes markers (c-peptide, fructosamine, insulin and proinsulin), infectious
diseases (methicillin-resistant staphylococcus aureus (mrsa), Lyme disease, dengue, measles and German measles) and food contamination
/ infection from animals (brucella, salmonella, proteus).
The
medical device industry is highly competitive, subject to rapid change, and significantly affected by new product introductions and other
activities of industry participants. We face potential competition from major medical device companies worldwide, many of which have
longer, more established operating histories and significantly greater financial, technical, marketing, sales, distribution, and other
resources. Our overall competitive position depends upon several factors, including product performance and reliability, connectivity,
manufacturing cost, and customer support.
Technology
License Agreements
We had entered into following
technology license agreements with LSBD, which is now in liquidation:
1) The
Amended and Restated License Agreement dated September 12, 2019, which amends and restates all previous license agreements (the “BPT
License Agreement”) is limited to the APAC Region.
2) The
technology license agreement dated June 23, 2020 (the “COV2 License Agreement”), for COV2 diagnostic test globally.
In
addition to the above, we have a 50% equity interest in BiosensX (North America) Inc., which has a separate technology license agreement
with the Licensor covering glucose/diabetes management field in the North America Territory.
BPT
License Agreement
Under
the terms of the BPT License Agreement we held an exclusive license in the APAC Region to the LSBD’s proprietary rights to the
biosensor technology used in the biosensor platform we refer to as the Biosensor Platform Technology (BPT), or simply the “Biosensor
Platform.” This platform consists of a small, printable modified organic thin-film transistor strip designed to detect multiple
biological analytes by substituting the top enzyme layer of the biosensor to suit each analyte. This platform technology has the potential
to develop a range of Point of Care Tests.
We understand that following the appointment of
a liquidator to LSBD on July 21, 2023, the intellectual property (IP) rights we licensed from LSBD have reverted back to the University
of Newcastle. Following our ongoing discussions with the University of Newcastle, it is the Company’s understanding that the University
of Newcastle cannot finalize licensing of the proprietary rights related to the BPT until the liquidation of LSBD is complete. As the
timeline for the completion of LSBD’s liquidation is unknown, the Company does not expect any updates or finalization of any license
terms until this occurs.
COV2
License Agreement
On
June 23, 2020, we entered into a COV2 License Agreement, with LSBD. The COV2 License Agreement sets forth our contractual rights and
responsibilities relating to the COV2 Products. The “COV2 Products” include: (i) a biosensor strip for antibodies against
SARS-CoV-2; (ii) a proprietary smartphone application for the purpose reading, storing, analyzing and providing patient support programs
for any one or more of the indicators for the purpose of measuring the amount or concentration of immunoglobulins (IgG, IgM, IgA) specific
to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2); and/or (iii) a dedicated sensor strip reading device for any one or
more of the indicators for the purpose of measuring the amount or concentration of immunoglobulins (IgG, IgM, IgA) specific to severe
acute respiratory syndrome coronavirus 2 (SARS-CoV-2). Under the COV2 License Agreement, the Licensor granted to us an exclusive worldwide
license to Licensor’s proprietary rights to the biosensor technology used in the COV2 Products.
We understand that following the appointment of
a liquidator to LSBD on July 21, 2023, the intellectual property (IP) rights we licensed from LSBD have reverted back to the University
of Newcastle. Following our ongoing discussions with the University of Newcastle, it is the Company’s understanding that the University
of Newcastle cannot finalize licensing of the proprietary rights related to COV2 Products until the liquidation of LSBD is complete. As
the timeline for the completion of LSBD’s liquidation is unknown, the Company does not expect any updates or finalization of any
license terms until this occurs.
Intellectual
Property
Our
biosensor business is dependent on the proprietary biosensor technology we licensed from LSBD. The original patent application, which
claims a priority date of March 2012, has been granted in the United States (9,766,199) and China (ZL201380022888.2). A second patent
application for a different iteration of the device design has been filed with a priority date of June 2016 and is granted in the United
States (10,978,653) and Australia (2016412541). A third patent application for a further iteration of the device has been filed with
a priority date of May 15, 2018. Further patents may yet be issued based on all three applications.
The
Chinese and the United States patents belong to the same patent family and relate to the same invention. The United States and Australian
patents originating with the second application are similarly of the same patent family and relate to the same invention. The exact wording
of the patent claims varies between countries.
The
patents protect the following technological claims of the BPT: the architecture of a biofunctional organic thin film transistor device
comprising a gate electrode, a dielectric layer, a partially organic semiconducting layer, a source electrode, a drain electrode, a substrate
and an enzyme; the method for producing the organic thin film transistor device; and methods of using the device to detect glucose levels.
A similar device with no dielectric layer. Further devices including a porous wicking layer to facilitate onset of device function.
We understand that following the appointment of
a liquidator to LSBD on July 21, 2023, the intellectual property (IP) rights we licensed from LSBD have reverted back to the University
of Newcastle. Following our ongoing discussions with the University of Newcastle, it is the Company’s understanding that the University
of Newcastle cannot finalize licensing of the proprietary rights related to the BPT until the liquidation of LSBD is complete. As the
timeline for the completion of LSBD’s liquidation is unknown, the Company does not expect any updates or finalization of any license
terms until this occurs.
We
intend to vigorously protect our intellectual property rights for any technologies owned through patents and copyrights, both in the
United States and internationally. Additionally, we plan to leverage trade secrets, know-how, and continuing technological innovation
to develop and maintain its competitive position. We intend to protect its proprietary rights through a variety of methods, including
confidentiality agreements and/or proprietary information agreements with suppliers, employees, consultants, independent contractors
and other entities who may have access to proprietary information. We will generally require employees to assign patents and other intellectual
property to it as a condition of employment. All consulting agreements will pre-emptively assign all new and improved intellectual property
that arise during the term of the agreement to the Company. In addition, we may license additional technologies from third parties. Prior
to any further acquisition or licensing of technology from a third party, the Company will evaluate the existing proprietary rights,
its ability to obtain and protect these rights, and the likelihood or possibility of infringement upon competing rights of others.
The
issuance of a patent does not ensure that it is valid or enforceable. The term of individual patents depends upon the legal term of the
patents in the countries where they are obtained. In most countries where the Company files patents, the patent term is 20 years from
the earliest date of filing a non-provisional patent application. In the United States, a patent’s term may be shortened if a patent
is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee, and a patent’s term
may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the United States Patent and Trademark
Office in granting a patent.
Human
Capital
As of August 14, 2025, we
have 14 full-time employees in Australia and 2 in the United States. Our subsidiary, IFP, has 37 full time and 2 part time employees in
the United Kingdom.
Our
team, including our employees, contractors, and collaborators, comprises multiple cross-functional units, including strategy, project
management, technical engineering, manufacturing and supply chain, quality assurance, legal and compliance, regulatory affairs, clinical
affairs, product management, marketing, systems engineering, human resources, IT, investor relations, and finance. Our team collectively
possesses the experience and capabilities to build a robust medical technology company that develops next-generation non-invasive medical
devices and solutions.
Legal
Proceedings
We
are currently not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding that we believe
is not ordinary routine litigation incidental to our business or otherwise material to the financial condition of our business.
Available
Information
Our
website is www.ibs.inc. We make available, free of charge, on our investor website, https://investors.ibs.inc, our annual report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable
after they are electronically filed with the Securities and Exchange Commission (“SEC”). The SEC maintains an internet site
that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC
at www.sec.gov. Information on our website does not, and shall not be deemed to, constitute part of this Annual Report on Form 10-K.
Our reference to the URL for our website is intended to be an inactive textual reference only.
ITEM
1A. RISK FACTORS.
Our
business involves certain risks and uncertainties. The following is a description of significant risks that might cause our future financial
condition or results of operations to differ materially from those expected. In addition to the risks and uncertainties described below,
we may face other risks and uncertainties, some of which may be unknown to us and some of which we may deem immaterial. If one or more
of these risks or uncertainties occur, our business, financial condition or results of operations may be materially and adversely affected.
A summary of our risk factors is as follows:
Summary
of Risk Factors
The
summary below provides a non-exhaustive overview of the risks that if realized could materially harm our business, prospects, operating
results and financial condition. This summary is qualified by reference to the full set of risk factors set forth in this Item.
● Our results may be impacted by changes in foreign currency exchange rates.
Risks
Related to Our Business
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 if 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 BPT and planned applications of IFP System), we have relied primarily on equity and some debt financing and government
support income. The Company believes there is material risk that its cash and cash equivalents as of June 30, 2025, of $1,019,909 may
be insufficient to allow the Company to fund its current operating plan through at least the next twelve months from the issuance of its
consolidated financial statements for the year ended June 30, 2025. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern for a period of at least one year from the date these consolidated financial statements were issued.
Accordingly, the Company will be required to raise additional funds during the next 12 months. However, there can be no assurance that
when the Company requires additional financing, such financing will be available on terms which are favorable to the Company, or if at
all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay
or reduce the scope of its research programs and/or limit or cease its operations. In addition, the Company may be unable to realize its
assets and discharge its liabilities in the normal course of business.
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.