INTELLIGENT BIO SOLUTIONS INC.

Previous wording

Comparison of the Three and Six Months Ended December 31, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended March 31, 2025 and 2024

Previous wording

Revenue from sales of goods decreased by $156,569 to $607,494 from $764,063 for the three months ended December 31, 2024, compared to same period in 2023. This decrease is mainly due to instability in the construction sector which resulted in the lower number of readers being sold during the period.

Current wording

Revenue from sales of goods decreased by $94,933 to $728,867 from $823,800 for the three months ended March 31, 2025, compared to same period in 2024. This decrease is mainly due to instability in the construction sector which resulted in the lower number of readers being sold during the period.

Previous wording

Revenue from sales of goods decreased by $80,376 to $1,479,781 from $1,560,157 for the six months ended December 31, 2024, compared to same period in 2023. This decrease is mainly due to instability in the construction sector which resulted in the lower number of readers being sold during the period.

Current wording

Revenue from sales of goods decreased by $175,309 to $2,208,648 from $2,383,957 for the nine months ended March 31, 2025, compared to same period in 2024. This decrease is mainly due to instability in the construction sector which resulted in the lower number of readers being sold during the period.

Previous wording

Despite a general decrease in sales due to lower readers sales, the Company managed to increase its gross profit margin as it concentrated its efforts on selling high margin cartridges. Cartridge sales, being consumable and recurring, offers a contribution margin of approximately 89.58% compared to 65.94% for readers. The increase in gross profit is discussed further in the following section.

Current wording

Despite a general decrease in sales due to lower readers sales, the Company managed to increase its gross profit margin as it concentrated its efforts on selling high margin cartridges. Cartridge sales, being consumable and recurring, offers a contribution margin of approximately 90.00% compared to 66.68% for readers. The increase in gross profit is discussed further in the following section.

Previous wording

Cost of revenue decreased by $180,434 to $384,381 from $564,815 for the three months ended December 31, 2024, compared to same period in 2023. The decrease in cost of revenue is mainly due to a proportional decrease in revenue and enhanced production capacity, which has led to reduced direct labor, direct materials and direct overhead costs.

Current wording

Cost of revenue decreased by $257,812 to $387,499 from $645,311 for the three months ended March 31, 2025, compared to same period in 2024. The decrease in cost of revenue is mainly due to a decrease in revenue and enhanced production capacity, which has led to reduced direct labor, direct materials and direct overhead costs.

Previous wording

Cost of revenue decreased by $218,711 to $909,867 from $1,128,578 for the six months ended December 31, 2024, compared to same period in 2023. The decrease in cost of revenue is mainly due to a proportional decrease in revenue and enhanced production capacity, which has led to reduced direct labor, direct materials and direct overhead costs.

Current wording

Cost of revenue decreased by $476,523 to $1,297,366 from $1,773,889 for the nine months ended March 31, 2025, compared to same period in 2024. The decrease in cost of revenue is mainly due to a decrease in revenue and enhanced production capacity, which has led to reduced direct labor, direct materials and direct overhead costs.

Previous wording

Gross profit is primarily attributable to the IFPG segment. Gross profit increased by $23,865 to $223,113 from $199,248 for the three months ended December 31, 2024, compared to same period in 2023.

Current wording

Gross profit is solely attributable to the IFPG segment. Gross profit increased by $162,879 to $341,368 from $178,489 for the three months ended March 31, 2025, compared to same period in 2024.

Previous wording

Gross profit increased by $138,335 to $569,914 from $431,579 for the six months ended December 31, 2024, compared to same period in 2023.

Current wording

Gross profit increased by $301,214 to $911,282 from $610,068 for the nine months ended March 31, 2025, compared to same period in 2024.

Previous wording

Contribution margin, which is a non-GAAP measure of our financial performance, decreased by $47,935 to $432,042 from $479,977 for the three months ended December 31, 2024, compared to same period in 2023. This decrease is primarily due to a decline in the revenue. However, the contribution margin improved by approximately 8.30%, driven by improved production efficiency and sales mix.

Current wording

Contribution margin, which is a non-GAAP measure of our financial performance, decreased by $87,834 to $533,403 from $621,237 for the three months ended March 31, 2025, compared to same period in 2024. This decrease is primarily due to a decline in the revenue.

Previous wording

Contribution margin decreased by $15,531 to $996,641 from $1,012,172 for the six months ended December 31, 2024, compared to same period in 2023. This decrease is primarily due to a decline in the revenue. However, the contribution margin improved by approximately 2.47%, driven by improved production efficiency and sales mix.

Current wording

Contribution margin decreased by $103,365 to $1,530,044 from $1,633,409 for the nine months ended March 31, 2025, compared to same period in 2024. This decrease is primarily due to a decline in the revenue. However, the contribution margin improved by approximately 0.76%, driven by improved production efficiency and sales mix.

Previous wording

Selling, general and administrative expenses increased by $104,070 to $1,809,114 from $1,705,044 for the three months ended December 31, 2024, compared to the same period in 2023. This increase is primarily due to an increase in consulting fees, advertising, marketing cost, accounting fees and travel costs offset by a reduction in legal and insurance costs. We anticipate these costs will increase as we continue to expand in new regions.

Current wording

Selling, general and administrative expenses decreased by $18,272 to $2,407,558 from $2,425,830 for the three months ended March 31, 2025, compared to the same period in 2024. This decrease is primarily due to a decrease in legal, insurance, and general overhead costs offset by an increase in advertising, marketing and travel costs. We anticipate these costs will increase as we continue to expand in new regions.

Previous wording

Selling, general and administrative expenses decreased by $403,974 to $3,758,130 from $4,162,104 for the six months ended December 31, 2024, compared to the same period in 2023. This decrease is primarily due to a decrease in legal, insurance, consulting fees and general overhead costs offset by an increase in advertising, marketing and travel costs.

Current wording

Selling, general and administrative expenses decreased by $422,246 to $6,165,688 from $6,587,934 for the nine months ended March 31, 2025, compared to the same period in 2024. This decrease is primarily due to a decrease in legal, insurance, and general overhead costs offset by an increase in advertising, marketing and travel costs.

Previous wording

Development and regulatory approval expenses increased by $158,492 to $506,944 from $348,452 for the three months ended December 31, 2024, compared to the same period in 2023. This increase is primarily driven by the amounts spent on in-house R&D staff and timing of R&D work performed by the research partners.

Current wording

Development and regulatory approval expenses increased by $890,335 to $1,814,047 from $923,712 for the nine months ended March 31, 2025, compared to the same period in 2024. This increase is primarily driven by the amounts spent on in-house R&D staff and timing of R&D work performed by the research partners required for FDA 510(k) clinical study plan.

Previous wording

During the three and six months ended December 31, 2024, the Company partnered with CenExel, a nationwide clinical research site network, and completed a method comparison clinical study onits Intelligent Fingerprinting Drug Screening System, confirming the sensitivity, specificity, accuracy, and usability of the System.

Current wording

During the nine months ended March 31, 2025, the Company partnered with CenExel, a nationwide clinical research site network, and completed a method comparison clinical study onits Intelligent Fingerprinting Drug Screening System, confirming the sensitivity, specificity, accuracy, and usability of the System.

Previous wording

Depreciation and amortization increased by $14,864 to $305,177 from $290,313 for the three months ended December 31, 2024, compared to same period in 2023. This increase is mainly due to the fluctuation in the foreign exchange rate for conversion of the account balances.

Current wording

Depreciation and amortization decreased by $16,945 to $301,978 from $318,923 for the three months ended March 31, 2025, compared to same period in 2024. This decrease is mainly due to the fluctuation in the foreign exchange rate for conversion of the account balances.

Previous wording

Depreciation and amortization increased by $7,726 to $605,599 from $597,873 for the six months ended December 31, 2024, compared to same period in 2023. This increase is mainly due to the fluctuation in the foreign exchange rate for conversion of the account balances.

Current wording

Depreciation and amortization decreased by $9,219 to $907,577 from $916,796 for the nine months ended March 31, 2025, compared to same period in 2024. This decrease is mainly due to the fluctuation in the foreign exchange rate for conversion of the account balances.

Previous wording

Interest expense decreased by $18,966 to $13,502 from $32,468 for the three months ended December 31, 2024, as compared to the same period in 2023. This decrease was attributable to the reduction of the interest expense recorded for leased assets and notes payable.

Current wording

Interest expense decreased by $27,674 to $15,000 from $42,674 for the three months ended March 31, 2025, as compared to the same period in 2024. This decrease was attributable to the reduction of the interest recorded for leased assets and notes payable as the leases are nearing its termination date.

Previous wording

Interest expense decreased by $34,087 to $35,829 from $69,916 for the six months ended December 31, 2024, as compared to the same period in 2023. This decrease was attributable to the reduction of the interest expense recorded for leased assets and notes payable.

Current wording

Interest expense decreased by $61,761 to $50,829 from $112,590 for the nine months ended March 31, 2025, as compared to the same period in 2024. This decrease was attributable to the reduction of the interest expense recorded for leased assets and notes payable as the leases are nearing its termination date.

Previous wording

The fair value gain on revaluation of financial instruments decreased by $175,738 to $0 from $175,738 for the six months ended December 31, 2024, as compared to the same period in 2023. This decrease is due to the revaluation gain on contingent consideration for holdback Series C Preferred Stock resulting from the acquisition of IFP. The holdback Series C Preferred Stock shares were converted into common stock in October 2023.

Current wording

The fair value gain on revaluation of financial instruments decreased by $175,738 to $0 from $175,738 for the nine months ended March 31, 2025, as compared to the same period in 2024. This decrease is due to the revaluation gain on contingent consideration for holdback Series C Preferred Stock resulting from the acquisition of IFP. The holdback Series C Preferred Stock shares were converted into common stock in October 2023. There was no fair value revaluation gain or loss on financial instruments for the three months ended March 31, 2025 and 2024.

Previous wording

Interest income increased by $18,428 to $21,937 from $3,509 for the three months ended December 31, 2024, as compared to the same period in 2023. This increase was attributable to funds received from capital raising activities, which contributed to the balance on which interest was earned.

Current wording

Interest income increased by $7,047 to $17,687 from $10,640 for the three months ended March 31, 2025, as compared to the same period in 2024. This increase was attributable to funds received from capital raising activities, which contributed to the balance on which interest was earned.

Previous wording

Interest income increased by $71,129 to $74,777 from $3,648 for the six months ended December 31, 2024, as compared to the same period in 2023. This increase was attributable to funds received from capital raising activities, which contributed to the balance on which interest was earned.

Current wording

Interest income increased by $78,176 to $92,464 from $14,288 for the nine months ended March 31, 2025, as compared to the same period in 2024. This increase was attributable to funds received from capital raising activities, which contributed to the balance on which interest was earned.

Previous wording

There was no income tax expense for both the three and six months ended December 31, 2024, and 2023, respectively, as the Company has established a full valuation allowance for all its deferred tax assets.

Current wording

There was no income tax expense for both the three and nine months ended March 31, 2025, and 2024, respectively, as the Company has established a full valuation allowance for all its deferred tax assets.

Previous wording

Unrealized foreign currency translation loss increased by $218,298 to a loss of $143,165 from a gain of $75,133 for the three months ended December 31, 2024, compared to the same period in 2023. This is due to the unfavorable exchange rate calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency.

Current wording

Unrealized foreign currency translation gain increased by $260,033 to a gain of $116,007 from a loss of $144,026 for the three months ended March 31, 2025, compared to the same period in 2024. This is due to the favorable exchange rate calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency.

Previous wording

Unrealized foreign currency translation gain increased by $16,073 to a gain of $73,190 from a gain of $57,117 for the six months ended December 31, 2024, compared to the same period in 2023. This is due to the favorable exchange rate calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency.

Current wording

Unrealized foreign currency translation gain increased by $276,106 to a gain of $189,197 from a loss of $86,909 for the nine months ended March 31, 2025, compared to the same period in 2024. This is due to the favorable exchange rate calculated based on the Company’s unsettled transactions in currencies other than its functional currency and translation of assets and liabilities of foreign subsidiaries in reporting currency.

Previous wording

Net loss attributable to the Company increased by $540,258 to $4,935,103 from $4,394,845 for the six months ended December 31, 2024, compared to the same period in 2023. This increase is primarily driven by the Company’s investment in R & D work through the development and regulatory approval expenses which for the six months increased by $1,003,297 to $1,455,696 required for its FDA 510(k) clinical study plan and an increase in selling, general and administrative expenses due to its continuous expansion in new regions.

Current wording

Net loss attributable to the Company increased by $106,117 to $7,478,629 from $7,372,512 for the nine months ended March 31, 2025, compared to the same period in 2024. This increase is primarily driven by the Company’s investment in R & D work through the development and regulatory approval expenses which for the nine months increased by $890,335 to $1,814,047 required for its FDA 510(k) clinical study plan.

Previous wording

Since our inception, our operations have primarily been financed through the issuance of our common stock, redeemable convertible preferred stock, and the incurrence of debt. As of December 31, 2024, we had $2,242,209 in cash and cash equivalents and working capital deficit of $341,243.

Current wording

Since our inception, our operations have primarily been financed through the issuance of our common stock, redeemable convertible preferred stock, and the incurrence of debt. As of March 31, 2025, we had $2,807,112 in cash and cash equivalents and working capital of $542,946.

Previous wording

On September 18, 2024, the Company entered into the ATM Agreement with Ladenburg. Pursuant to the terms of the ATM Agreement, the Company may sell from time to time through Ladenburg, as sales agent and/or principal, shares of the Company’s common stock, with an aggregate sales price of up to $3.0 million. During the period between September 18, 2024, through to December 31, 2024, the Company raised approximately $676,619 (net of commissions of approximately $20,927 paid to Ladenburg) through the sale and issuance of 438,367 shares of Company common stock pursuant to the ATM Agreement. During the three months ended December 31, 2024, the Company raised approximately $642,108 (net of commissions of approximately $19,860 paid to Ladenburg) through the sale and issuance of 421,200 shares of Company common stock pursuant to the ATM Agreement.

Current wording

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 the terms of the ATM Agreement, the Company may sell from time to time through Ladenburg, as sales agent and/or principal, shares of the Company’s common stock, with an aggregate sales price of up to $3.0 million. On March 11, 2025, the Company filed a prospectus supplement (the “2025 ATM Supplement”) to the ATM Prospectus (defined below) in connection with the offer, sale, and issuance of additional shares. During the period between September 18, 2024, through to March 31, 2025, the Company raised approximately $1,486,340 (net of commissions of approximately $45,971 paid to Ladenburg) through the sale and issuance of 920,363 shares of Company common stock pursuant to the ATM Agreement. During the three months ended March 31, 2025, the Company raised approximately $809,721 (net of commissions of approximately $25,044 paid to Ladenburg) through the sale and issuance of 481,996 shares of Company common stock pursuant to the ATM Agreement. Any sale of shares pursuant to the ATM Agreement are made under the Company’s effective “shelf” registration statement on Form S-3 (File No. 333-264218), which became effective on April 20, 2022, and included base prospectus, and under the related prospectus supplement (the “ATM Prospectus”) filed with the U.S. Securities and Exchange Commission (the “SEC”), dated September 18, 2024, as supplemented by the 2025 ATM Supplement filed with the SEC on March 11, 2025.