INTELLIGENT BIO SOLUTIONS INC.

Notes to the Condensed Consolidated Financial Statements

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 $2,658,302 (after losses attributable to non-controlling interest) for the three months ended September 30, 2026. As of September 30, 2026, the Company has shareholders’ equity of $7,352,528, working capital of $4,466,995, and an accumulated deficit of $77,622,342.

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 $5,929,871, will be insufficient to fund its current operating plan through at least the next 12 months from the issuance of these unaudited condensed consolidated financial statements. Accordingly, the Company will be required to raise additional funds during the next 12 months. While the Company intends to obtain additional funding through equity or debt financings, strategic collaborations, or other arrangements, there can be no assurance that such funding will be available on acceptable terms, or at all. If the Company is unable to obtain additional financing when needed, it may be required to delay, reduce, or curtail the scope of its operations and development activities. In addition, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.

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.

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 1-for-10 reverse stock split of the Company’s common stock (the “2025 Reverse Stock Split”). The Company’s common stock began trading on a reverse stock split-adjusted basis on The Nasdaq Capital Market on December 16, 2025. Unless otherwise indicated, all issued and outstanding shares of common stock, per share amounts and outstanding equity instruments and awards exercisable into common stock contained in the consolidated financial statements of the Company and notes thereto have been retroactively adjusted to reflect the 2025 Reverse Stock Split for all prior periods presented.

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:

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 179,500 shares of our common stock pursuant to awards granted under the 2019 Plan. Currently, the Company grants equity-based awards to employees and members of the Company’s Board of Directors in the form of restricted stock awards (RSAs) under the 2019 Plan. As of September 30, 2026, the Company had 3,265 shares available for issuance in accordance with the 2019 Plan.

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 $5,346,486 and $3,453,197, respectively. No losses have been incurred to date on any deposits.

Major Customer - One customer accounted for 13.2% and 11.7% of revenues for the three months ended September 30, 2026, and 2025, respectively.

Major Supplier - The Company’s largest suppliers accounted for 25.5% and 17.6% of purchases for the three months ended September 30, 2026, and 2025, respectively. The Company relies on various suppliers for its operations. For the purpose of supplier concentration analysis, “purchases” include only invoiced costs directly attributable to direct material costs.

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:

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.

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.

A) Revenue, government support income and net loss

B) 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:

NOTE 5. INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following as of September 30, 2026:

Intangible assets, net consist of the following as of June 30, 2026:

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 $3,796,822 and $3,536,708, respectively.

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 $235,374 and $242,369, respectively.

Estimated amortization for future periods is as follows:

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 $94,443 and $94,394 for the three months ended September 30, 2026 and 2025, respectively.

The components of operating lease expense are as follows:

As of September 30, 2026 and 2025, the weighted average remaining lease-term was 8.5 years and 9.7 years, respectively. The weighted-average discount rate was 11.95% as of September 30, 2026 and 2025.

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:

NOTE 7. SHAREHOLDERS’ EQUITY

Common and Preferred Stock

The Company is authorized to issue 100,000,000 shares of common stock and 10,000,000 shares of preferred stock, each with a par value of $0.01. There were 3,316,803 and 2,905,603 common shares outstanding at September 30, 2026, and June 30, 2026, respectively. No preferred stock was outstanding at either date.

Warrants

As of September 30, 2026, there were warrants outstanding to purchase 12,045,102 shares of common stock (subject to adjustment and rounding in accordance with the terms of the applicable warrant agreement), held by certain shareholders, with exercise prices ranging from $0.01 to $1,248 per share and a weighted-average exercise price of $3.64 per share. Each warrant initially represented the right to purchase one share of the Company’s common stock and was subject to adjustment upon the occurrence of specified events including reverse stock splits.

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 121,867 and 12,326 shares of common stock, respectively, under the ATM facility for net proceeds of approximately $265,373 and $213,750, respectively, after commissions of approximately $8,208 and $6,611, respectively, paid to Ladenburg.

Through September 30, 2026, the Company sold an aggregate of 623,167 shares under the ATM facility for aggregate net proceeds of approximately $4.3 million.

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)2,036,659 shares of common stock or, in lieu thereof, Series M Pre-Funded Warrants (the “Series M Pre-Funded Warrants”), (ii) Series N-1 warrants to purchase up to 2,036,659 shares of common stock (the “Series N-1 Warrants”), and (iii) Series N-2 warrants to purchase up to 2,036,659 shares of common stock (the “Series N-2 Warrants” and, collectively with the Series N-1 Warrants and Series M Pre-Funded Warrants, the “September 2026 Warrants”). The combined purchase price for one share of common stock (or one Series M Pre-Funded Warrant) and accompanying Series N-1 and Series N-2 Warrants was $2.455. The September 2026 Private Placement closed on September 2, 2026, at which time the Company issued an aggregate of 2,036,659 Series M Pre-Funded Warrants,2,036,659 Series N-1 Warrants, and 2,036,659 Series N-2 Warrants.

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 $0.01 per share, subject to adjustment, and remains exercisable until exercised in full. Each Series N-1 Warrant and Series N-2 Warrant is exercisable for one share of common stock at an exercise price of $2.33 per share, subject to adjustment, and has a term of five years commencing on the date a registration statement registering the resale of the shares underlying the Series N-1 Warrant and Series N-2 Warrant, as applicable, is declared effective by the U.S. Securities and Exchange Commission (the “SEC”).

Gross proceeds from the September 2026 Private Placement were approximately $5.0 million, before deducting placement agent fees and other offering expenses, and excluding any proceeds from the exercise of the September 2026 Warrants. The Company intends to use the net proceeds for working capital and general corporate purposes.

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 $381,204 on completion of certain milestones.

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 $976,538 on completion of certain milestones.

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 $4.7 million upon the achievement of certain milestones until March 28, 2024 (extended to March 28, 2025, on April 16, 2024). Proceeds from the grant were used primarily to reimburse the Company for costs incurred in the construction of the manufacturing facility.

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, $1,131,147 remains payable to the Australian Government, which is disclosed within current liabilities in the accompanying condensed consolidated balance sheet within accounts payable and accrued expenses. The remaining amount is payable in 8 equal monthly installments.

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.

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:

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 tofour years, subject to continued service, while performance-based awards vest upon achievement of specified clinical, regulatory, and commercial milestones and continued service.

The Company recognized stock-based compensation expense of $86,368 and $0 for the three months ended September 30, 2026, and 2025, respectively. As of September 30, 2026, unrecognized stock-based compensation expense related to unvested awards was approximately $237,079, expected to be recognized over a weighted-average period of 0.87 years.

The table below shows the activity related to restricted stock awards during the three months ended 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.