INTELLIGENT BIO SOLUTIONS INC

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 Annual Report on Form 10-K filed with the SEC on September 18, 2024, 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.

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 BPT and planned applications of Intelligent Fingerprinting Drug Screening 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 December 31, 2024, of $2,242,209 may be insufficient to allow the Company to fund its current operating plan through at least the next twelve months from the issuance of its unaudited condensed consolidated financial statements for the fiscal quarter ended December 31, 2024. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date these unaudited condensed consolidated financial statements were issued. Accordingly, the Company will be required to raise additional funds during the next 12 months. However, there can be no assurance that when the Company requires additional financing, such financing will be available on terms which are favorable to the Company, or 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.

The Company has only completed 4 of the 8 agreed-upon milestones set forth in the Company’s grant agreement with the Australian government related to the construction of a manufacturing facility in Australia. Because we will be unable to achieve certain agreed-upon milestones for the grant by the prescribed deadline of March 28, 2025, we will be required to refund certain amounts from the grant.

We received Medical Products Priority Grant funding from the Australian government in June 2021 as contributions towards establishing a high-tech manufacturing facility in Australia. Amounts under this grant were paid to the Company based upon timelines and updates. On April 16, 2024, the Australian government extended the deadline to complete the project to March 28, 2025, with certain modifications in project costs. The Company has been in discussions with the Australian government in relation to the construction of a manufacturing facility in Australia, where the discussions are now based upon milestones for the manufacture and delivery of certain components of the technology. If we are unable to achieve the balance of the agreed-upon milestones for the grant by the prescribed deadline of March 28, 2025, we will be required to refund certain amounts from the grant after agreed upon adjustments and terms to be finalized after the prescribed deadline. The accounting policy for the treatment of these grants is to treat the proceeds received as a liability and deduct qualifying expenditure from this liability. Accordingly, the maximum to be refunded to the Australian government is disclosed under liabilities in the balance sheet as “Current portion of deferred grant income ”. The balance of this liability in the balance sheet as of December 31, 2024, is $2,299,644.