{"url_path":"/sec/inbs/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A RISK FACTORS**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/1725430/0001493152-26-022617-index.html","accession_number":"0001493152-26-022617","cik":"0001725430","ticker":"INBS","issuer_name":"INTELLIGENT BIO SOLUTIONS INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1725430/0001493152-26-022617-index.html","primary_entity_key":"0001725430","primary_entity_name":"INTELLIGENT BIO SOLUTIONS INC."},"word_count":2084,"has_tables":true,"body_markdown":"**ITEM\n1A. RISK FACTORS**\n\n \n\nAs\nof 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\non Form 10-K filed with the SEC on August 15, 2025, except for the risks described below. Any of those risk factors could result in a\nsignificant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known\nto us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors\nor disclose additional factors from time to time in our future filings with the SEC.\n\n \n\n**We\nmay not be able to satisfy the continued listing requirements of the Nasdaq Capital Market in order to maintain the listing of our common\nstock.**\n\n** **\n\nOn\nDecember 15, 2025, we received a notice letter (the “Bid Price Notice”) from the Listing Qualifications Department of Nasdaq\nnotifying us that because the closing bid price per share for Company common stock was below $1.00 for 30 consecutive business days preceding\nthe date of the Bid Price Notice, we did not meet the $1.00 per share minimum bid price requirement set forth in Nasdaq Listing Rule\n5550(a)(2) (the Bid Price Rule).\n\n \n\nIn\naccordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided with an initial period of 180 calendar days, or until June 15, 2026,\nto regain compliance with the Bid Price Rule. We effected the 2025 Reverse Stock Split in order to regain compliance with the Bid Price\nRule.\n\n \n\nOn January\n7, 2026, we received written notification from Nasdaq notifying us that the Company had regained compliance with the Bid Price Rule as\na result of the closing bid price of Company common stock being at $1.00 per share or greater for the prior 14 consecutive business days\n(from December 16, 2025, to January 6, 2026). Accordingly, the Company is now in compliance with the Bid Price Rule and Nasdaq considers\nthe matter closed.\n\n \n\nAlthough\nthe 2025 Reverse Stock Split brought the price of our common stock back above $1.00 per share in order to meet the requirements for the\ncontinued listing of our common stock on the Nasdaq Capital Market, there can be no assurance that the closing bid price of our common\nstock will remain at or above $1.00 following the 2025 Reverse Stock Split. If we fail to satisfy any of Nasdaq’s continued listing\nrequirements, Nasdaq may take steps to delist our common stock, which could have a materially adverse effect on our ability to raise\nadditional funds as well as the price and liquidity of our common stock.\n\n \n\n**Changes\nin government funding levels, staffing resources, or policy priorities at the FDA, the SEC, and other government agencies could adversely\naffect their ability to perform their regulatory and oversight functions. Reductions in funding, hiring constraints, workforce attrition,\nor shifts in legislative or administrative priorities may hinder these agencies’ ability to hire and retain key personnel, administer\nregulatory programs, or review submissions in a timely manner.**\n\n \n\nThe\nFDA’s ability to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors,\nand otherwise process regulatory submissions can be affected by a variety of factors, including government budget and funding levels,\nworkforce availability, ability to hire and retain qualified personnel, and statutory, regulatory, or policy changes. Limitations on\nagency resources, including furloughs or staffing reductions, whether temporary or prolonged, may result in delays in regulatory interactions,\nreviews, and approvals, which could delay the development or commercialization of our product candidates and adversely affect our business,\nfinancial condition, and results of operations.\n\n \n\nGovernment\nfunding for agencies that support research and development activities is subject to the political process and may fluctuate over time.\nWhile legislation such as the 21st Century Cures Act was intended to support medical innovation and enhance the FDA’s hiring authority,\nfuture budgetary pressures or policy changes could reduce funding allocations to the FDA and other government agencies. Such funding\nconstraints could impair their ability to fulfil their mandates and could also adversely affect academic institutions and research organizations\nthat rely on government funding, potentially impacting our development activities.\n\n \n\n**We\nwill need to raise additional capital to fund our operations in the future. If we are unsuccessful in attracting new capital, we may\nnot 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\nterms, or at all. If available, financing terms may lead to significant dilution of our stockholders’ equity.**\n\n \n\nWe\nare not profitable and have had negative cash flow from operations since our inception. To fund our operations and to develop and commercialize\nour products (including the BPT and planned applications of IFP System), we have relied primarily on equity and some debt financing and\ngovernment support income. The Company believes there is material risk that its cash and cash equivalents as of March 31, 2026, of $6,862,204\nmay be insufficient to allow the Company to fund its current operating plan through at least the next twelve months from the issuance\nof its unaudited condensed consolidated financial statements for the fiscal quarter ended March 31, 2026. These conditions raise substantial\ndoubt about the Company’s ability to continue as a going concern for a period of at least one year from the date these unaudited\ncondensed consolidated financial statements were issued. Accordingly, the Company will be required to raise additional funds during the\nnext 12 months. However, there can be no assurance that when the Company requires additional financing, such financing will be available\non 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\nneeds 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\naddition, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.\n\n \n\nTo\nobtain the additional capital necessary to fund our operations, we expect to finance our cash needs through public or private equity\nofferings, debt financing and/or other capital sources. Even if capital is available, it might be available only on unfavorable terms.\nAny additional equity or convertible debt financing into which we enter could be dilutive to our existing stockholders. Any future debt\nfinancing into which we enter may impose covenants upon us that restrict our operations, including limitations on our ability to incur\nliens or additional debt, pay dividends, repurchase our stock, make certain investments and engage in certain merger, consolidation or\nasset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our\nstockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, we may need to relinquish\nrights to our technologies or our products or grant licenses on terms that are not favorable to us. If access to sufficient capital is\nnot available as and when needed, our business will be materially impaired and we may be required to cease operations, curtail one or\nmore product development or commercialization programs, scale back or eliminate the development of business opportunities, or significantly\nreduce expenses, sell assets, seek a merger or joint venture partner, file for protection from creditors or liquidate all of our assets.\nAny of these factors could harm our operating results.\n\n \n\n28\n\n \n\n \n\n**As\na result of the liquidation of Life Science Biosensor Diagnostics Pty Ltd (LSBD) and the intellectual property rights licensed by the\nCompany from LSBD (the Biosensor IP and intellectual property related to SARS-CoV-2 testing) reverting back to the University of Newcastle,\nthere is a risk of extended delays in negotiating the terms of licensing the intellectual property with the University, or that such\nnegotiations may result in less favorable licensing terms for the Company, or that such negotiations may not be successful, which, in\nany event, would negatively impact the Company’s ability to develop and commercialize the BPT, the Licensed Products or the COV2\nProducts**\n\n \n\nWe\nare party to the BPT License Agreement with LSBD, pursuant to which, among other things, the Company licenses from LSBD certain products\nand intellectual property related to the biosensor technology used in the Biosensor Platform, which we refer to as the Biosensor IP.\nThe Company also holds a 50% interest in BiosensX (North America) Inc., which has exclusive license to use, make, sell and offer to sell\nproducts under the intellectual property rights in connection with the biosensor technology and the glucose/diabetes management field\nin the U.S., Mexico and Canada.\n\n \n\nWe\nunderstand that following the commencement of the liquidation of LSBD on July 21, 2023, the LSBD IP we licensed from LSBD, which includes\nthe Biosensor IP, has reverted back to the University of Newcastle. Following our discussions with the University of Newcastle, it is\nour understanding that the University of Newcastle cannot finalize licensing of the Biosensor IP until the liquidation, by virtue of\nthe status of LSBD being under external administration, is completed. As of the date of this Quarterly Report on Form 10-Q the ASIC database\nmaintained by the Australian Securities and Investments Commission (ASIC) indicates that LSBD (Australian Company Number 613 279 771)\nis under the status of a company being under external administration. We do not know the timeline for when LSBD’s liquidation will\nbe complete or when LSBD’s status will change, and accordingly, we do not expect any updates or finalization of any license terms\nuntil this occurs. As a result, further development of the BPT has been postponed until we are able to finalize appropriate licensing\narrangements related to the BPT.\n\n \n\nAccordingly,\nthere is an inherent risk of extended delays in negotiating the terms of licensing the Biosensor IP with the University, or that such\nnegotiations may result in less favorable licensing terms for the Company, or that such negotiations may not be successful, which, in\nany event, would negatively impact the Company’s ability to develop and commercialize the BPT or Licensed Products.\n\n \n\nThese\nsame risks apply to the Company’s licensing of intellectual property from LSBD related to the Company’s COV2 Products, which includes a biosensor strip for antibodies against SARS-CoV-2.\n\n \n\n**The Company may not be able to repay the grant\nit received from the Australian Government when due.**\n\n \n\nIn the fourth fiscal quarter ended June 30, 2025,\nupon the end of the project deadline for the construction of a manufacturing facility in Australia, a grant acquittal audit was completed\nby an independent auditor in relation to the grant received from the Australian Government. Following the grant acquittal audit, an amount\nof $1,513,290 remains payable to the Australian Government, which is disclosed under liabilities in the balance sheet as of March 31,\n2026, as “Accounts payable and accrued expenses”. The remaining amount is payable in 11 equal monthly instalments. If the\nCompany is unable to obtain sufficient financing or otherwise raise adequate funds, it may be unable to make required payments when due.\nAny failure to timely repay such obligations could result in defaults, the acceleration of amounts owed, the imposition of penalties,\nthe initiation of enforcement actions by creditors, and other adverse consequences, any of which could materially and adversely affect\nthe Company’s business, financial condition, and results of operations.\n\n \n\n**The\nloss of our “emerging growth company” status will increase certain reporting and compliance obligations and any failure to\nmeet these expanded requirements could expose us to regulatory scrutiny or sanctions and could harm our reputation and adversely affect\nour stock price.**\n\n \n\nWe\nwill cease to qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the\n“JOBS Act”), at the end of this fiscal year. As a result, beginning with our Annual Report on Form 10-K for the fiscal year\nending June 30, 2026, we will no longer be able to use the extended transition period for complying with new or revised accounting standards,\nwill become subject to the same disclosure and attestation requirements as other public companies that are not emerging growth companies.\nWe cannot predict whether investors will find our common stock less attractive because we may rely on these exemptions. If some investors\nfind our common stock less attractive as a result, there may be a less active trading market for our common stock, and the trading price\nof our common stock may be more volatile."}