ubi20250630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 000-52607

Universal Biosensors, Inc.

(Exact name of registrant as specified in its charter)

Delaware		98-0424072
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Universal Biosensors, Inc. 1 Corporate Avenue, Rowville, 3178, Victoria Australia		Not Applicable
(Address of principal executive offices)		(Zip Code)

Telephone: +61 3 9213 9000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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 definition 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 298,067,435 shares of Common Stock, U.S.$0.0001 par value, outstanding as of August 4, 2025.

UNIVERSAL BIOSENSORS, INC.

TABLE OF CONTENTS

			Page

PART I	FINANCIAL INFORMATION


Item 1	Financial Statements (unaudited)

	1)	Consolidated condensed balance sheets at June 30, 2025 and December 31, 2024	1

	2)	Consolidated condensed statements of comprehensive income/(loss) for the three and six months ended June 30, 2025 and 2024	2

	3)	Consolidated condensed statements of changes in stockholders’ equity and comprehensive income/(loss) for the three and six months ended June 30, 2025 and 2024	3

	4)	Consolidated condensed statements of cash flows for the six months ended June 30, 2025 and 2024	4

	5)	Notes to consolidated condensed financial statements	5

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

Item 3	Quantitative and Qualitative Disclosures About Market Risk		27

Item 4	Controls and Procedures		27

PART II	OTHER INFORMATION


Item 1	Legal Proceedings		28

Item 1A	Risk Factors		28

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		28

Item 3	Defaults Upon Senior Securities		28

Item 4	Mine Safety Disclosures		28

Item 5	Other Information		28

Item 6	Exhibits		28

	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32
	Exhibit 101
	Exhibit 104

SIGNATURES			29

Unless otherwise noted, references in this Form 10-Q to “Universal Biosensors”, the “Company,” “Group,” “we,” “our” or “us” means Universal Biosensors, Inc. (“UBI”) a Delaware corporation and, when applicable, its wholly owned Australian operating subsidiary, Universal Biosensors Pty Ltd (“UBS”), its wholly owned US operating subsidiary, Universal Biosensors LLC (“UBS LLC”) and UBS’ wholly owned Canadian operating subsidiary, Hemostasis Reference Laboratory Inc. (“HRL”) and wholly owned Dutch operating subsidiary, Universal Biosensors B.V. (“UBS BV”). Unless otherwise noted, all references in this Form 10-Q to “$”, “A$” or “dollars” and dollar amounts are references to Australian dollars. References to “US$”, “CAD$” and “€” are references to United States dollars, Canadian dollars and Euros respectively.

Universal Biosensors, Inc.

Item 1

Financial Statements

Consolidated Condensed Balance Sheets (Unaudited)

	June 30, 2025			December 31, 2024
	A$			A$
ASSETS
Current assets:
Cash and cash equivalents		2,198,490			8,544,105
Inventories		3,276,811			5,585,866
Accounts receivable		722,609			956,500
Prepayments		881,386			915,196
Restricted cash		35,000			35,000
Research and development tax incentive receivable		692,088			2,188,203
Other current assets		230,411			248,041
Total current assets		8,036,795			18,472,911
Non-current assets:
Property, plant and equipment		32,693,880			32,690,674
Less accumulated depreciation		(28,535,810	)		(28,243,602	)
Property, plant and equipment - net		4,158,070			4,447,072
Right-of-use asset - operating leases		2,297,898			2,468,019
Right-of-use asset - finance leases		35,053			39,726
Restricted cash		320,000			320,000
Other non-current assets		91,991			93,036
Total non-current assets		6,903,012			7,367,853
Total assets		14,939,807			25,840,764

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		1,413,584			356,222
Accrued expenses		1,030,665			1,795,801
Contract liabilities		10,057			4,781
Lease liability - operating leases		608,620			900,402
Lease liability - finance leases		9,908			9,679
Employee entitlements liabilities		950,271			896,933
Short-term loan		207,880			697,284
Total current liabilities		4,230,985			4,661,102
Non-current liabilities:
Asset retirement obligations		1,342,020			1,296,533
Employee entitlements liabilities		67,701			109,311
Lease liability - operating leases		2,188,239			2,365,667
Lease liability - finance leases		31,706			36,718
Total non-current liabilities		3,629,666			3,808,229
Total liabilities		7,860,651			8,469,331

Commitments and contingencies (Note12)

Stockholders’ equity:
Preferred stock, US$0.01 par value. Authorized 1,000,000 shares; issued & outstanding nil at June 30, 2025 (nil at December 31, 2024). Common stock, US$0.0001 par value. Authorized 750,000,000 shares; issued & outstanding 298,067,435 shares at June 30, 2025 (Authorized 300,000,000 shares; issued & outstanding 298,067,435 at December 31, 2024)		29,807			29,807
Additional paid-in capital		131,362,812			131,347,039
Accumulated deficit		(113,660,090	)		(99,407,192	)
Current year loss		(10,448,624	)		(14,252,898	)
Accumulated other comprehensive loss		(204,749	)		(345,323	)
Total stockholders’ equity		7,079,156			17,371,433
Total liabilities and stockholders’ equity		14,939,807			25,840,764

See accompanying Notes to the Consolidated Condensed Financial Statements.

Universal Biosensors, Inc.

Consolidated Condensed Statements of Comprehensive Income/(Loss) (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	A$			A$			A$			A$
Revenue
Revenue from products		1,127,750			1,371,978			2,457,563			2,551,821
Revenue from services		81,014			253,588			305,860			543,255
Total revenue		1,208,764			1,625,566			2,763,423			3,095,076
Operating costs and expenses
Cost of goods sold		2,446,909			343,949			3,072,783			825,416
Cost of services		(31,451	)		111,302			53,990			221,479
Total cost of goods sold and services		2,415,458			455,251			3,126,773			1,046,895
Gross profit/(Loss)		(1,206,694	)		1,170,315			(363,350	)		2,048,181
Other operating costs and expenses
Depreciation and amortization		174,767			222,609			325,410			475,707
Research and development		2,019,167			1,720,116			2,814,670			1,974,333
Selling, general and administrative		3,303,934			3,715,972			7,668,908			7,741,354
Total operating costs and expenses		5,497,868			5,658,697			10,808,988			10,191,394
Loss from operations		(6,704,562	)		(4,488,382	)		(11,172,338	)		(8,143,213	)
Other income/(expense)
Interest income		16,458			126,905			79,849			195,561
Interest expense		(507	)		(6,660	)		(2,743	)		(13,347	)
Financing costs		(22,744	)		(22,505	)		(45,488	)		(39,400	)
Research and development tax incentive income		363,722			580,026			709,766			694,374
Exchange loss		(276,652	)		(48,965	)		(109,357	)		(35,119	)
Other income		13,611			65,517			91,687			108,269
Total other income/(expenses)		93,888			694,318			723,714			910,338
Net loss before tax		(6,610,674	)		(3,794,064	)		(10,448,624	)		(7,232,875	)
Income tax benefit/(expense)		0			0			0			0
Net loss after tax		(6,610,674	)		(3,794,064	)		(10,448,624	)		(7,232,875	)

Net loss per share
Net loss per share - basic and diluted		(0.02	)		(0.01	)		(0.04	)		(0.03	)
Average weighted number of shares - basic and diluted		298,067,435			270,961,208			298,067,435			242,397,296

Other comprehensive income/(loss), net of tax:
Foreign currency translation reserve		146,305			(170,062	)		140,574			5,475
Other comprehensive income/(loss)		146,305			(170,062	)		140,574			5,475
Comprehensive loss		(6,464,369	)		(3,964,126	)		(10,308,050	)		(7,227,400	)

See accompanying Notes to the Consolidated Condensed Financial Statements.

Universal Biosensors, Inc.

Consolidated Condensed Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss) (Unaudited)

Three Months Ended June 30, 2025
	Ordinary shares				Additional					Other			Total
	Shares		Amount		paid-in capital		Accumulated deficit			comprehensive income/ (loss)			stockholders’ equity
			A$		A$		A$			A$			A$

Balances at April 1, 2025		298,067,435		29,807		131,347,039		(117,498,040	)		(351,054	)		13,527,752
Net loss		0		0		0		(6,610,674	)		0			(6,610,674	)
Other comprehensive income		0		0		0		0			146,305			146,305
Stock-based compensation expense		0		0		15,773		0			0			15,773
Balances at June 30, 2025		298,067,435		29,807		131,362,812		(124,108,714	)		(204,749	)		7,079,156

Six Months Ended June 30, 2025
	Ordinary shares				Additional					Other			Total
	Shares		Amount		paid-in capital		Accumulated deficit			comprehensive income/ (loss)			stockholders’ equity
			A$		A$		A$			A$			A$

Balances at January 1, 2025		298,067,435		29,807		131,347,039		(113,660,090	)		(345,323	)		17,371,433
Net loss		0		0		0		(10,448,624	)		0			(10,448,624	)
Other comprehensive income		0		0		0		0			140,574			140,574
Stock-based compensation expense		0		0		15,773		0			0			15,773
Balances at June 30, 2025		298,067,435		29,807		131,362,812		(124,108,714	)		(204,749	)		7,079,156

Three Months Ended June 30, 2024
	Ordinary shares				Additional					Other			Total
	Shares		Amount		paid-in capital		Accumulated deficit			comprehensive income/ (loss)			stockholders’ equity
			A$		A$		A$			A$			A$

Balances at April 1, 2024		231,400,768		23,140		121,656,307		(102,859,158	)		(156,631	)		18,663,658
Net loss		0		0		0		(3,794,064	)		0			(3,794,064	)
Issuance of common stock at A$0.15 per share, net of issuance costs		66,666,667		6,667		9,632,233		0			0			9,638,900
Other comprehensive loss		0		0		0		0			(170,062	)		(170,062	)
Stock-based compensation expense		0		0		41,272		0			0			41,272
Balances at June 30, 2024		298,067,435		29,807		131,329,812		(106,653,222	)		(326,693	)		24,379,704

Six Months Ended June 30, 2024
	Ordinary shares				Additional					Other			Total
	Shares		Amount		paid-in capital		Accumulated deficit			comprehensive income/ (loss)			stockholders’ equity
			A$		A$		A$			A$			A$

Balances at January 1, 2024		212,369,435		21,237		119,239,087		(99,420,347	)		(332,168	)		19,507,809
Net loss		0		0		0		(7,232,875	)		0			(7,232,875	)
Issuance of common stock at A$0.15 per share, net of issuance costs		83,333,334		8,334		11,533,534		0			0			11,541,868
Other comprehensive income		0		0		0		0			5,475			5,475
Performance awards and exercise of stock options		2,364,666		236		472,697		0			0			472,933
Stock-based compensation expense		0		0		84,494		0			0			84,494
Balances at June 30, 2024		298,067,435		29,807		131,329,812		(106,653,222	)		(326,693	)		24,379,704

See accompanying Notes to the Consolidated Condensed Financial Statements.

Universal Biosensors, Inc.

Consolidated Condensed Statements of Cash Flows (Unaudited)

	Six Months Ended June 30,
	2025			2024
	A$			A$
Cash flows from operating activities:
Net loss		(10,448,624	)		(7,232,875	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		325,410			475,707
Stock-based compensation expense		15,773			84,494
Non-cash lease (benefit)/expense		124,133			(7,376	)
Cash lease payments		(311,827	)		(304,222	)
Unrealized foreign exchange gains/(losses)		113,200			(32,229	)
Change in assets and liabilities:
Inventories		2,309,055			(1,075,250	)
Accounts receivable		233,892			730,843
Prepayments and other assets		1,591,938			3,272,858
Employee entitlements		11,728			193,748
Accounts payable and accrued expenses		188,534			(1,243,824	)
Other liabilities		0			(36,131	)
Net cash used in operating activities		(5,846,788	)		(5,174,257	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(39,118	)		(111,687	)
Net cash used in investing activities		(39,118	)		(111,687	)
Cash flows from financing activities:
Repayment of borrowings		(491,713	)		(607,388	)
Proceeds from issuance of common stock, net of issuance costs		0			12,409,067
Other		0			(4,452	)
Net cash provided by/(used in) financing activities		(491,713	)		11,797,227
Net decrease in cash, cash equivalents and restricted cash		(6,377,619	)		6,511,283
Cash, cash equivalents and restricted cash at beginning of period		8,899,105			10,595,429
Effect of exchange rate fluctuations on the balances of cash held in foreign currencies		32,004			(75,728	)
Cash, cash equivalents and restricted cash at end of period		2,553,490			17,030,984

See accompanying Notes to the Consolidated Condensed Financial Statements.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the consolidated condensed financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These consolidated condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K” or “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 26, 2025. The year-end consolidated condensed balance sheets data as at December 31, 2024 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

Going Concern

The accompanying consolidated condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the continuity of operations, realization of assets and the satisfaction of obligations in the normal course of business. The Company has experienced recurring losses since its inception and has not generated any significant revenues. The Company incurred a net loss of A$6,610,674 and A$10,448,624, respectively for the three and six month period ended June 30, 2025, and used A$3,719,264 and A$5,846,788, respectively during the three and six month period ended June 30, 2025 in cash to fund operations and had an accumulated deficit of A$113,660,090 and A$99,407,192, respectively as of June 30, 2025 and December 31, 2024. The Company expects to continue to generate operating losses for the foreseeable future. As of June 30, 2025, the Company had cash and cash equivalents of A$2,198,490 (December 31, 2024: A$8,544,105). The Company has not generated significant revenues resulting in the net cash outflows and accumulated losses to date and is forecasting to incur further cash outflows while growing the business over the coming period. The Company believes that its current cash and cash equivalents are only sufficient to fund its operations into Q3 2025 and this raises substantial doubt about the ability of the Company to continue as a going concern within one year from the date of the issuance of these consolidated condensed financial statements. The consolidated condensed financial statements do not include any adjustments that might result from the outcome of this going concern position. In view of these matters, continuation as a going concern is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and the success of its future operations. Management plan to fund the operations of the Company by growing revenue, pursuing joint venture or partnerships for its product portfolio, sale of its assets and raising cash through debt funding (refer note 11 for details of the proposed senior secure loan facility announced on July 2, 2025) or the issuance of new equity, until such a time as the Company’s operations generate positive cash flows or other profitable investments may be achieved. Although the Company has commenced a process to raise additional capital, there are currently no binding written agreements in place for such funding or issuance of securities and there can be no assurance that such funding sources will be available at terms acceptable to the Company, or at all in the future. However, the Company has successfully raised new equity capital in the past. Management continues to explore options for the Company to continue as a going concern. The inability to obtain funding, as and when needed, would have a negative impact on the Company’s financial condition and ability to pursue its business strategies. If the Company has insufficient funding to meet its working capital needs, it could be required to limit or cease operations.

Principles of Consolidation

The consolidated condensed financial statements include the financial statements of the Company and its wholly owned subsidiaries, UBS, UBS LLC, HRL and UBS BV. All intercompany balances and transactions have been eliminated on consolidation.

Use of Estimates

The preparation of the consolidated condensed financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated condensed financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the adequacy of the provision for expected credit losses, stock obsolescence, deferred income taxes, research and development tax incentive income and stock-based compensation expenses. Actual results could differ from those estimates.

Recent Accounting Pronouncements

The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on the Company's condensed financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

(a) Recent issued accounting standards not yet adopted

ASU No. 2024-03 “Disaggregation of Income Statement Expenses”

On November 4, 2024, the FASB issued ASU 2024-03 “Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures”, which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. Early adoption is permitted. This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on the consolidated financial statements.

ASU No. 2025-01 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures”

The FASB has released ASU 2025-01, which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The rationale for the Board’s clarification of ASU 2024-03’s effective date is that non-calendar-year-end entities could have concluded that initial adoption of the ASU’s amendments was required “in an interim reporting period, rather than in an annual reporting period.” The Company is currently evaluating this guidance to determine the impact it may have on the consolidated financial statements.

(b) Recent adopted accounting standards

ASU No. 2024-02 “Removes Concepts Statement References From Codification”

The FASB issued ASU 2024-024 on March 29, 2024, to remove references to its concepts statements from the FASB Accounting Standards Codification. The ASU is part of the Board’s standing project to make “Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements.” The ASU’s amendments are effective for public business entities (PBEs) for fiscal for fiscal years beginning after December 15, 2025.

On October 1, 2024, the Company adopted the new accounting pronouncement ASU No. 2024-02. The adoption of ASU No. 2024-02 did not have any impact on the consolidated financial statements or results of operations.

ASU No. 2023-09, “Improvement to Income Tax Disclosures”

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments in this ASU are effective for annual periods beginning on January 1, 2025, and should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted.

On January 1, 2024, the Company adopted the new accounting pronouncement ASU No. 2023-09 in the current period and retrospectively. The adoption of ASU No. 2023-09 did not have any impact on the consolidated condensed financial statements or results of operations.

ASU No. 2023-07 “Improvements to Reportable Segment Disclosures”

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning on December 15, 2024, and should be applied on a retrospective basis for all periods presented. For entities other than public business entities, the ASU is effective for annual periods beginning after December 15, 2025.

The Company adopted the new accounting pronouncement ASU No. 2023-07 in the fourth quarter of 2024. For additional information, see Note 13.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Net Loss per Share and Anti-dilutive Securities

Basic and diluted net loss per share is presented in conformity with ASC 260 – Earnings per Share. Basic and diluted net loss per share has been computed using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by adjusting the basic net loss per share by assuming all dilutive potential ordinary shares are converted.

Foreign Currency

Functional and Reporting Currency

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The functional currency of UBI and UBS is A$ for all years presented. The functional currencies of UBS LLC, HRL and UBS BV are US$, CAD$ and €, respectively, for all years presented.

The consolidated condensed financial statements are presented using a reporting currency of A$.

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated condensed statements of comprehensive income/(loss).

The results and financial position of all the Group entities that have a functional currency different from the reporting currency are translated into the reporting currency as follows:

●	assets and liabilities for each balance sheet item reported are translated at the closing rate at the date of that balance sheet;

●	income and expenses for each income statement item reported are translated at average exchange rates (unless this is not a reasonable approximation of the effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

●	all resulting exchange differences are recognized as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities are taken to the Accumulated Other Comprehensive Income/(Loss).

Fair Value of Financial Instruments

The carrying value of all current assets and current liabilities approximates fair value because of their short-term nature. The estimated fair value of all other amounts has been determined, depending on the nature and complexity of the assets or the liability, by using one or all of the following approaches:

●

Market approach – based on market prices and other information from market transactions involving identical or comparable assets or liabilities.

●

Cost approach – based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence.

●

Income approach – based on the present value of a future stream of net cash flows.

These fair value methodologies depend on the following types of inputs:

●

Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).

●

Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable (Level 2 inputs).

●

Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).

Concentration of Credit Risk and Other Risks and Uncertainties

Cash, cash equivalents, restricted cash and accounts receivable consist of financial instruments that potentially subject the Company to concentration of credit risk to the extent of the amount recorded on the consolidated condensed balance sheets. The Company’s cash, cash equivalents and restricted cash are primarily invested with one of Australia’s largest banks. The Company is exposed to credit risk in the event of default by the banks holding the cash, cash equivalents and restricted cash to the extent of the amount recorded on the consolidated condensed balance sheets. The Company has not experienced any losses on its deposits of cash, cash equivalents and restricted cash. In relation to receivables the Company performs ongoing credit evaluations of our customers. The provision for expected credit losses is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with an initial maturity of three months or less to be cash equivalents. For cash and cash equivalents, the carrying amount approximates fair value due to the short maturity of those instruments.

The Company maintains cash and restricted cash, which includes collateral for facilities.

Inventory

Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to dispose. Inventories are principally determined using the standard costing methodology. Cost comprises direct materials, direct labour and an appropriate portion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts. The Company recognizes inventory on the consolidated condensed balance sheets when they have concluded that the substantial risks and rewards of ownership, as well as the control of the asset, have been transferred.

Receivables

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is the best estimate of the amount of probable credit losses in the existing accounts receivable. The Company evaluates the collectability of accounts receivable and records a provision for expected credit losses based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience. The expense to adjust the provision for expected credit losses, if any, is recorded within selling, general and administrative expenses in the consolidated condensed statements of comprehensive income/(loss). Account balances are charged against the allowance when it is probable the receivable will not be recovered.

Prepayments

Prepaid expenses represent expenditures that have not yet been recorded by the Company as an expense but have been paid for in advance. The Company’s prepayments are primarily represented by insurance premiums paid annually in advance.

Other Current Assets

The Company’s other current assets are primarily represented by sundry receivables.

Property, Plant and Equipment

Property, plant and equipment are recorded at acquisition cost, less accumulated depreciation.

Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of machinery and equipment is three to ten years. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Maintenance and repairs that do not extend the life of the asset are charged to operations as incurred and include normal services and do not include items of a capital nature.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets, including property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss is recognized when the undiscounted future cash flows expected to result from the use of the asset is less than the carrying amount of the asset. Accordingly, we recognize an impairment loss based on the excess of the carrying value amount over the fair value of the asset.

Australian Goods and Services Tax, Canadian Harmonized Sales Tax, US Sales Tax and European Value Added Tax, collectively “Sales Tax”

Revenues, expenses and assets are recognized net of the amount of associated Sales Tax, unless the Sales Tax incurred is not recoverable from the taxation authority. In this case it is recognized as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of Sales Tax receivable or payable. The net amount of Sales Tax recoverable from, or payable to, the taxation authority is included with other current assets or accrued expenses in the consolidated condensed balance sheets dependent on whether the balance owed to the taxation authorities is in a net receivable or payable position.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Leases

At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease, the Company evaluates whether it should be classified as an operating or a finance lease. Upon modification of the contract, the Company will reassess to determine if a contract is or contains a leasing arrangement.

The Company records lease liabilities based on the future estimated cash payments discounted over the lease term, defined as the non-cancellable time period of the lease, together with all the following:

●

periods covered by an option to extend the lease if the Company is reasonably certain to exercise the extension option; and

●

periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option.

Leases may also include options to terminate the arrangement or options to purchase the underlying lease property. The Company does not separate lease and non-lease components of contracts. Lease components provide the Company with the right to use an identified asset, which consist of the Company’s real estate properties and office equipment. Non-lease components consist primarily of maintenance services.

As an implicit discount rate is not readily determinable in the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. For certain leases with original terms of twelve months or less, the Company recognizes lease expense as incurred and does not recognize any lease liabilities. Short-term and long-term portions of operating and finance lease liabilities are classified as lease liabilities in the Company’s consolidated condensed balance sheets.

A right-of-use (“ROU”) asset is measured as the amount of the lease liability with adjustments, if applicable, for lease incentives, initial direct costs incurred by the Company and lease prepayments made prior to or at lease commencement. ROU assets are classified as operating or finance lease right-of-use assets, net of accumulated amortization, on the Company’s consolidated condensed balance sheets. The Company evaluates the carrying value of ROU assets if there are indicators of potential impairment and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value of the asset group is determined to not be fully recoverable and is in excess of its estimated fair value, the Company will record an impairment loss in its consolidated condensed statements of income and comprehensive income/(loss).

Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in the Company’s lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred.

Asset Retirement Obligations

Asset retirement obligations (“ARO”) are legal obligations associated with the retirement and removal of long-lived assets. ASC 410 – Asset Retirement and Environmental Obligations requires entities to record the fair value of a liability for an asset retirement obligation when it is incurred. When the liability is initially recorded, the Company capitalizes the cost by increasing the carrying amounts of the related property, plant and equipment. Over time, the liability increases for the change in its present value, while the capitalized cost depreciates over the useful life of the asset. The Company derecognizes ARO liabilities when the related obligations are settled.

The ARO is in relation to our premises where in accordance with the terms of the lease, the lessee has to restore part of the building upon vacating the premises.

Revenue Recognition

The Group recognizes revenue predominantly from the sale of analyzers and test strips and the provision of laboratory testing services based on the provisions of ASC 606 Revenue from Contracts with Customers. In accordance with this provision, to determine whether to recognize revenue, the Group follows a five-step process:

Identifying the contract with a customer;

Identifying the performance obligations within the customer contract;

Determining the transaction price;

Allocating the transaction price to the performance obligation; and

Recognizing revenue when/as performance obligations are satisfied.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Nature of goods and services

The following is a description of products and services from which the Company generates its revenue.

Products and services		Nature, timing of satisfaction of performance obligations and significant payment terms
Coagulation testing products (“Xprecia”)		Our point-of-care coagulation testing products use electrochemical cell technology to measure Prothrombin Time (PT/INR), a test used to monitor the effect of the anticoagulant therapy warfarin. The performance obligation for the sale of these products is satisfied at a point-in-time when the Company transfers control of the products to its customer. The point of transfer of control of the products is dictated by individual terms contained within a customer agreement, as are the payment terms. The transaction price is variable.

Laboratory testing services		HRL provides non-diagnostic laboratory services and performs these services on behalf of customers. The performance obligation for the services is satisfied when the testing has been finalized and results have been reported to the customer. In some cases, the performance obligations will be satisfied as predetermined milestones have been achieved by the Company.

Wine testing products (“Sentia”)		Our Sentia wine analyzer is used to measure Free SO₂, Malic Acid, Glucose, Fructose, Total Sugar, Acetic Acid and Titratable Acidity levels in wine. The performance obligation for the sale of this product is satisfied at a point-in-time when the Company transfers control of the products to its customer. The point of transfer of control of the products is dictated by the individual terms contained within a customer agreement, as are the individual payment terms. The transaction price is variable.

Veterinary diabetes product (“Petrackr”)		Our veterinary blood glucose product, Petrackr, is a blood glucose monitoring product for dogs and cats with diabetes. The performance obligation for the sale of this product is satisfied at a point-in-time when the Company transfers control of the products to its customer. The point of transfer of control of the products is dictated by the individual terms contained within a customer agreement, as are the individual payment terms. The transaction price is variable.

See Note 8 to the Consolidated Condensed Financial Statements for a disaggregation of revenue.

Interest Income

Interest income is recognized as it accrues, taking into account the effective yield and consists of interest earned on cash, cash equivalents and restricted cash in interest-bearing accounts.

Research and Development Tax Incentive Income

Research and development tax incentive income is recognized when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred and the consideration can be reliably measured.

The research and development tax incentive is one of the key elements of the Australian Government’s support for Australia’s innovation system and is supported by law primarily in the form of the Australian Income Tax Assessment Act 1997 as long as eligibility criteria are met. Subject to meeting a number of conditions, an entity involved in eligible research and development (“R&D”) activities may claim research and development tax incentive income as follows:

(1)

as a 43.5% refundable tax offset if aggregate turnover (which generally means an entity’s total income that it derives in the ordinary course of carrying on a business, subject to certain exclusions) of the entity is less than A$20,000,000, or

(2)

as a 38.5% non-refundable tax offset if aggregate turnover of the entity is more than A$20,000,000.

In accordance with SEC Regulation S-X Article 5-03, the Company’s research and development tax incentive income has been recognized as non-operating income as it is not indicative of the core operating activities or revenue producing goals of the Company. Management has assessed the Company’s R&D activities and expenditures to determine which activities and expenditures are likely to be eligible under the tax incentive regime described above. At each period end management estimates the refundable tax offset available to the Company based on available information at the time. This estimate is also reviewed by external tax advisors on an annual basis.

The Company has recorded research and development tax incentive income of A$363,722 and A$709,766 for the three and six months ended June 30, 2025, respectively. As at June 30, 2025 there is reasonable assurance that the aggregate turnover of the Company for the year ended December 31, 2025 will not exceed A$20,000,000.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Research and Development Expenditure

R&D expenses consist of costs incurred to further the Company’s research and product development activities and include salaries and related employee benefits, costs associated with clinical trial and preclinical development, regulatory activities, research-related overhead expenses, costs associated with the manufacture of clinical trial material, costs associated with developing a commercial manufacturing process, costs for consultants and related contract research, facility costs and depreciation. R&D costs are expensed as incurred as they fall in the scope of ASC 730 ‘Research and Development’.

Clinical Trial Expenses

Clinical trial costs are a component of R&D expenses. These expenses include fees paid to participating hospitals and other service providers, which conduct certain testing activities on behalf of the Company. Depending on the timing of payments to the service providers and the level of service provided, the Company records prepaid or accrued expenses relating to these costs.

Stock-based Compensation

We measure stock-based compensation at grant date, based on the estimated fair value of the award and recognize the cost as an expense on a straight-line basis over the vesting period of the award. We estimate the fair value of stock options using the Trinomial Lattice model.

We record deferred tax assets for awards that will result in deductions on our income tax returns, based on the amount of compensation cost recognized and our statutory tax rate in the jurisdiction in which we will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported in our income tax return are recorded in expense or in capital in excess of par value if the tax deduction exceeds the deferred tax assets or to the extent that previously recognized credits to paid-in-capital are still available if the tax deduction is less than the deferred tax asset.

Employee Benefit Costs

The Company contributes a portion of each employee’s salary to standard defined contribution superannuation funds on behalf of all eligible UBS employees in line with legislative requirements. The contribution rate was 11.0% on July 1, 2023 and increased to 11.5% on July 1, 2024 and further increased to 12.0% on July 1, 2025. Superannuation is an Australian compulsory savings program plan for retirement whereby employers are required to pay a portion of an employee’s remuneration to an approved superannuation fund that the employee is typically not able to access until they have reached the statutory retirement age. Whilst the Company has a third-party default superannuation fund, it permits UBS employees to choose an approved and registered superannuation fund into which the contributions are paid. Contributions are charged to the consolidated condensed statements of comprehensive income/(loss) as the expense is incurred.

Registered Retirement Savings Plan and Deferred Sharing Profit Plan

The Company provides eligible HRL employees with a retirement plan. The retirement plan includes a Registered Retirement Savings Plan (“RRSP”) and Deferred Profit Sharing Plan (“DPSP”). The RRSP is voluntary and the employee contributions are matched by the Company up to a maximum of 5% based on their continuous years of service and placed into the RRSP. The Company contributes 1% to 2% of the employee’s base earnings towards the DPSP. The DPSP contributions are vested immediately.

Benefit Plan

The Company provides eligible HRL employees a Benefit Plan. In general, the Benefit Plan includes extended health care, dental care, basic life insurance, basic accidental death and dismemberment and disability insurance.

401k Plan

The Company acts as a plan sponsor for a 401K plan for eligible UBS LLC employees. A 401K plan is a US-based defined-contribution pension account into which the employees can elect to have a percentage of their salary deducted and contributed to the plan. Their contributions are matched by the Company up to a maximum of 10% of their salary.

Employee Entitlements Liabilities

Employee entitlements to annual leave and long service leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the balance sheet date.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Income Taxes

We are subject to income taxes in Australia, Canada, the Netherlands and the United States. The Company applies ASC 740 - Income Taxes which establishes financial accounting and reporting standards for the effects of income taxes that result from a Company’s activities during the current and preceding years. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Where it is more likely than not that some portion or all of the deferred tax assets will not be realized, the deferred tax assets are reduced by a valuation allowance. The valuation allowance is sufficient to reduce the deferred tax assets to the amount that is more likely than not to be realized.

Pursuant to the U.S. tax reform rules, UBI is subject to regulations addressing Global Intangible Low-Taxed Income ("GILTI"). The GILTI rules are provisions of the U.S. tax code enacted as a part of tax reform legislation in the U.S. passed in December 2017. Mechanically, the GILTI rule functions as a global minimum tax for all U.S. shareholders of controlled foreign corporations (“CFCs”) and applies broadly to certain income generated by a CFC. The Company can make an accounting policy election to either: (1) treat GILTI as a period cost if and when incurred; or (2) recognize deferred taxes for basis differences that are expected to reverse as GILTI in future years. The Company has elected to treat GILTI as a period cost.

Reclassification

Certain prior year amounts have been reclassified to conform with current year presentation.

2. Cash, cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated condensed balance sheets that sum to the total of the same amounts shown in the consolidated condensed statements of cash flows.

	June 30, 2025		December 31, 2024
	A$		A$
Cash and cash equivalents		2,198,490		8,544,105
Restricted cash – current assets		35,000		35,000
Restricted cash – non-current assets		320,000		320,000
		2,553,490		8,899,105

Restricted cash maintained by the Company in the form of term deposits is as follows:

	June 30, 2025		December 31, 2024
	A$		A$
Collateral for facilities - current assets		35,000		35,000
Collateral for facilities - non-current assets		320,000		320,000
		355,000		355,000

Collateral for facilities represents a letter of credit for A$35,000 issued in favour of American Express Australia Ltd (current), bank guarantee of A$250,000 for commercial lease of UBS’ premises (non-current) and security deposit on Company’s credit cards of A$70,000 (non-current).

Interest earned on the restricted cash for the three months ended June 30, 2025 and 2024 was A$3,048 and A$3,849, respectively and A$6,793 and A$7,698 for the six months ended June 30, 2025 and 2024, respectively.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

3. Inventories

	June 30, 2025			December 31, 2024
	A$			A$
Raw materials		432,855			330,347
Work in progress		501,199			611,170
Finished goods		4,591,158			5,368,183
		5,525,212			6,309,700
Provision for stock obsolescence		(2,248,401	)		(723,834	)
		3,276,811			5,585,866

4. Receivables

	June 30, 2025			December 31, 2024
	A$			A$
Accounts receivable		852,743			1,359,936
Allowance for credit losses		(130,134	)		(403,436	)
		722,609			956,500

5. Property, Plant and Equipment

	June 30, 2025			December 31, 2024
	A$			A$
Plant and equipment		23,351,411			23,347,922
Leasehold improvements		9,342,469			9,342,752
		32,693,880			32,690,674
Accumulated depreciation		(28,535,810	)		(28,243,602	)
Property, plant & equipment - net		4,158,070			4,447,072

6. Leases

The Company’s lease portfolio consists primarily of operating leases for office space and equipment with contractual terms expiring from December 2025 to February 2032. Lease contracts may include one or more renewal options that allow the Company to extend the lease term. The exercise of lease options is generally at the discretion of the Company. None of the Company’s leases contain residual value guarantees, substantial restrictions, or covenants. The Company’s leases are substantially within Australia and Canada.

	June 30, 2025			December 31, 2024
	A$			A$
Operating lease right-of-use assets:
Non-current		2,297,898			2,468,019
Operating lease liabilities:
Current		608,620			900,402
Non-current		2,188,239			2,365,667
Weighted average remaining lease terms (in years)		6.0			6.0
Weighted average discount rate		4.7	%		4.8	%

The components of lease income/expense were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	A$		A$		A$		A$
Fixed payment operating lease expense		127,697		109,563		231,055		224,899
Short-term lease expense		3,306		2,324		4,862		3,111
Sub-lease income		42,119		36,822		80,772		73,213

The sublease income is deemed an operating lease.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

The components of the fixed payment operating and short-term lease expense as classified in the consolidated condensed statements of comprehensive income/(loss) are as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
	A$		A$			A$		A$
Cost of services		3,184		(2,596	)		5,715		12,383
Research and development		3,956		(19,828	)		7,102		15,135
Selling, general and administrative		120,557		131,987			218,238		197,381
		127,697		109,563			231,055		224,899

Supplemental cash flow information related to the Company’s leases was as follows:

	Six Months Ended June 30,
	2025		2024
	A$		A$
Operating cash outflows from operating leases		568,836		499,584

Supplemental non-cash information related to the Company’s leases was as follows:

	Six Months Ended June 30,
	2025		2024
	A$		A$
Right-of-use assets obtained in exchange for lease liabilities		0		28,353

Future lease payments are as follows:

	June 30, 2025			December 31, 2024
	A$			A$
1 year		714,816			1,022,251
2 years		411,903			407,413
3 years		417,634			416,427
4 years		423,570			418,875
5 years		433,100			428,300
Thereafter		742,471			960,633
Total future lease payments		3,143,494			3,653,899
Less: imputed interest		(346,636	)		(387,830	)
Total operating lease liabilities		2,796,858			3,266,069
Current		608,620			900,402
Non-current		2,188,239			2,365,667

As of June 30, 2025, the Company has not entered into any operating or finance lease agreements that have not yet commenced.

7. Short-Term Loan

In December 2024 the Company entered into a short-term loan facility to finance its 2025 Insurance Premium. The total amount available and initially drawn down under the facility was A$697,284. The facility is repayable in nine monthly installments which commenced in January 2025 and has an effective annual interest rate of 1.84%. The short-term borrowing is secured by proceeds of or payable under any insurance including proceeds or refunds from the cancellation or termination of any insurance.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

8. Revenue

Disaggregation of Revenue

In the following table, revenue is disaggregated by major product and service lines and timing of revenue recognition.

	Three Months ended June 30,				Six Months ended June 30,
	2025		2024		2025		2024
	A$		A$		A$		A$
Major product/service lines
Coagulation testing products		587,745		799,736		1,156,982		1,427,728
Laboratory testing services		81,014		253,588		305,860		543,255
Wine testing products		506,565		541,683		1,199,714		1,068,371
Veterinary diabetes products		33,440		30,559		100,867		55,722
		1,208,764		1,625,566		2,763,423		3,095,076

Timing of revenue recognition
Products and services transferred at a point in time		1,208,764		1,625,566		2,763,423		3,095,076

Contract Balances

The following table provides information about receivables and contract liabilities from contracts with customers.

	June 30, 2025		December 31, 2024
	A$		A$
Receivables		722,609		956,500
Contract liabilities		10,057		4,781

The Company’s contract liabilities represent the Company’s obligation to transfer products to customers for which the Company has received consideration from customers, but the transfer has not yet been completed.

Significant changes in the contract assets and the contract liabilities balances during the period are as follows:

	June 30, 2025		December 31, 2024
	A$		A$
Contract Liabilities - current:
Opening balance		4,781		36,132
Closing balance		10,057		4,781
Net increase/(decrease)		5,276		(31,351	)

The Company expects all of the Company’s contract liabilities to be realized by December 31, 2025.

9. Other Income

Other income is recognized when there is reasonable assurance that the income will be received, and the consideration can be reliably measured.

Other income is as follows for the relevant periods:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025			2024		2025		2024
	A$			A$		A$		A$
Rental income		39,891			36,391		80,396		73,213
Sundry		(26,280	)		29,126		11,291		35,056
		13,611			65,517		91,687		108,269

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

10. Total Comprehensive Income/(Loss)

The Company follows ASC 220 – Comprehensive Income. Comprehensive income/(loss) is defined as the total change in shareholders’ equity during the period other than from transactions with shareholders and for the Company, includes net income/(loss).

The tax effect allocated to each component of other comprehensive income/(loss) is as follows:

	Before-Tax Amount			Tax (Expense)/ Benefit		Net-of-Tax Amount
	A$			A$		A$

Three Months Ended June 30, 2025
Foreign currency translation reserve		146,305			0		146,305
Other comprehensive income		146,305			0		146,305

Three Months Ended June 30, 2024
Foreign currency translation reserve		(170,062	)		0		(170,062	)
Other comprehensive loss		(170,062	)		0		(170,062	)

Six Months Ended June 30, 2025
Foreign currency translation reserve		140,574			0		140,574
Other comprehensive income		140,574			0		140,574

Six Months Ended June 30, 2024
Foreign currency translation reserve		5,475			0		5,475
Other comprehensive income		5,475			0		5,475

11. Related Party Transactions

Details of related party transactions material to the operations of the Group other than compensation arrangements, expense allowances and other similar items in the ordinary course of business, are set out below:

On July 2, 2025, the Company signed a non-binding term sheet for a senior secured loan facility of up to A$8.5 million with substantial securityholder, Viburnum Funds Pty Ltd and potentially other parties arranged by Viburnum Funds Pty Ltd (Proposed Transaction). The Proposed Transaction is subject to satisfaction of certain conditions, including obtaining securityholder approval and the negotiation of formal legally binding documentation. Given his association with Viburnum, Non-Executive Director, Mr. Craig Coleman, resigned from the Board of the Company to avoid any potential conflicts of interests as the transaction progresses.

The non-binding term sheet for the Proposed Transaction outlines the general terms pursuant to which the Company will, subject to final negotiation of the definitive terms, enter into a binding facility agreement with Viburnum (Facility Agreement). The Facility Agreement will include customary terms and conditions for a facility of this nature.

The Proposed Transaction also contemplates that the Company will undertake an equity raising, which is expected to take the form of a Security Purchase Plan, to provide existing securityholders with the opportunity to participate in the Company's potential growth.

If the Proposed Transaction proceeds, the funds provided under the Facility Agreement and the proceeds raised under the associated equity raising will be used for general working capital purposes.

The key terms of the non-binding term sheet are summarised below:

●

Facility Limit: Up to A$8.5 million comprising:

○

First Draw: A$3.5 million available upon securityholder approval of the Proposed Transaction being obtained (see below); and

○

Second Draw: Up to A$5 million available in the period of 60 days to 120 days after the First Draw, subject to the approval of Viburnum.

●

Security: First ranking general security over the assets of the Company.

●

Term: 18 months from the First Draw.

●

Interest Rate: 15% per annum, capitalised and payable in two instalments at 12 months and 18 months from the First Draw.

●

Royalty: A perpetual royalty of 10% on gross revenue from the Company's water and wine testing strips, with the royalty increasing to 15% where the Second Draw is utilised by the Company.

●

Arrangement Fee: 5% of the Facility Limit, payable in options over UBI ordinary securities issued to Viburnum, with an exercise price of A$0.05 and a three-year term. The number of options will be calculated by reference to a customary option value calculation and will be issued as soon as practicable following securityholder approval.

●

Conditions: Completion of the Facility Agreement will be conditional upon certain matters being satisfied, including:

○

securityholder approval being obtained for several features of the Proposed Transaction, which will be sought at a General Meeting of the Company expected to be held on or about Friday, 29 August 2025;

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

○

recommendation by the Independent Non-Executive Directors of the Company that securityholders vote in favour of the Proposed Transaction;

○

the Company progresses initiatives to divest its healthcare and HRL assets prior to entry into the Facility Agreement (an advisor has been appointed by the Company in this regard);

○

cap of A$250,000 on legal and other advisory fees associated with the facility;

○

Viburnum being granted the right to appoint an observer at all Board meetings of the Company;

○

the Company using its best endeavours to launch an ordinary equity offer under a Security Purchase Plan prior to any request by the Company under the Second Draw; and

○

completion of due diligence investigations on the Company to the satisfaction of Viburnum.

The non-binding term sheet is subject to negotiation and agreement of formal binding documentation. There is no certainty that such agreement will be reached and whether the final terms of the agreement will be consistent with those set out above.

On May 8, 2024, the Company announced that a fully underwritten non-renounceable rights issue of new CHESS depositary interests over fully paid ordinary shares in UBI (“New CDIs”) raised A$10 million (“Entitlement Offer”) at a ratio of 1 New CDI for approximately every 3.47 existing CDIs held at the record date, being April 16, 2024. In addition, participants in the Entitlement Offer received one attaching option to acquire CDIs for each New CDI acquired under the Entitlement Offer at an exercise price of A$0.20 (“Options”). The Options vested upon issue, expire 3 years from the date of issue, are exercisable in multiple tranches and each entitle the option holder to 1 CDI upon exercise (subject to any adjustments for reconstructions or bonus issues in accordance with the Listing Rules).

In connection with the Entitlement Offer, the Company received a binding commitment from the Underwriter, Viburnum Funds Pty Ltd (“Viburnum”) to fully underwrite the Entitlement Offer. Following the close of the Entitlement Offer, 29,289,424 New CDIs and Options were issued to Viburnum.

Mr. Craig Coleman is a Non-Executive Director of the Company and an Executive Chairman and associate of the Underwriter. Viburnum, as investment manager for its associated funds and entities currently holds voting power over approximately 29% of the Company’s shares.

The Company, after receiving the approval of the stockholders of the Company at a special meeting of stockholders held on April 10, 2024 (the “Meeting”), issued Viburnum 13,849,567 options, as its underwriting fee ("Underwriter Options"), equal in value to 5.0% of the underwritten amount of A$10 million. The Underwriter Options were issued on the same terms as the Options issued to investors under the Entitlement Offer.

The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States or to, or for the account of, a U.S. Person (within the meaning of Regulation S under the Securities Act), absent registration or an applicable exemption from the registration requirements. Hedging transactions involving these securities may not be conducted unless in compliance with the Securities Act.

In addition, the Company received stockholder approval at the Meeting to amend its certificate of incorporation to increase the number of authorized shares of common stock available for issuance.

On May 27, 2022, Viburnum acquired from Mr. Sharman, our previous Managing Director, unlisted options to purchase up to 1,000,000 ordinary shares at A$0.57 per option. The options fully vested on March 25, 2020, had an exercise price of A$0.20 and have an expiry date of March 24, 2024. These options were exercised on March 22, 2024. In March 2024, Mr. Sharman and his associates exercised 1,364,666 options at an exercise price of A$0.20 per option.

There were no material related party transactions or balances as at June 30, 2025 other than as disclosed above.

12. Commitments and Contingencies

Liabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. These were nil as at June 30, 2025 and December 31, 2024. Purchase commitments are entered into with various parties to purchase products and services such as equipment, technology and consumables used in R&D and commercial activities. Purchase commitments contracted for as at June 30, 2025 and December 31, 2024 were A$3,091,203 and A$3,858,779, respectively, and these are fixed and determinable. The amounts purchased under the purchase obligations for each period generally resemble the purchase commitments as of the balance sheet date.

13. Segment Information

Universal Biosensors, Inc. has one reportable segment: specialist biosensors company. The biosensors segment consists of the development, manufacture and commercialization of a range of point of use devices for measuring different analytes across different industries and the provision of testing services. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer & Managing Director.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

The accounting policies of the biosensors segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the biosensors segment based on net loss, which is reported on the income statement as net loss. The measure of segment assets is reported on the balance sheet as total assets.

To date, the Company has not generated significant revenue. The Company expects to continue to incur significant expenses and operating losses as our products mature in their various markets.

As such, the CODM uses revenue growth and cash forecast models in deciding how to invest into the biosensors segment. Such models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation, along with revenue growth and cash forecast models.

The table below summarizes the significant expense categories regularly reviewed by the CODM for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	A$			A$			A$			A$
Revenue from products & services		1,208,764			1,625,566			2,763,423			3,095,076
Cost of goods sold & services		2,415,458			455,251			3,126,773			1,046,895
Gross profit/(loss)		(1,206,694	)		1,170,315			(363,350	)		2,048,181

Operating expenses & income
Accounting, tax and audit		193,563			160,194			400,478			360,505
Depreciation & amortisation		174,767			222,609			325,410			475,707
Distribution, sales & marketing		114,301			58,713			251,141			513,716
Employee compensation		3,134,176			3,014,916			6,107,308			5,764,511
HRL operating expenses		431,334			416,175			697,458			794,360
Insurance		165,748			210,985			329,675			422,887
IT costs		233,231			146,106			412,274			273,487
Legal fees & consultancy		215,196			68,788			318,536			91,911
Occupancy expenses		132,970			98,003			276,218			219,866
Office administration		160,637			44,132			331,563			125,015
Other R&D expenses		283,444			3,525			579,661			257,742
Product registration & compliance		166,026			190,795			201,579			351,925
Sundry costs		270,993			902,137			520,461			316,588
Travel & conferences		120,877			209,985			212,070			297,694
Interest expense		507			6,660			2,743			13,347
Interest income		(16,458	)		(126,905	)		(79,849	)		(195,561	)
Research and development tax incentive income		(363,722	)		(580,026	)		(709,766	)		(694,374	)
Sundry income		(13,611	)		(82,412	)		(91,687	)		(108,269	)
Total operating expenses & income		5,403,979			4,964,379			10,085,273			9,281,056
Consolidated net loss		(6,610,674	)		(3,794,064	)		(10,448,624	)		(7,232,875	)

	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
	A$		A$			A$		A$
Research and development expenses
Consumables		24,485		474,101			277,549		31,454
Development costs		255,808		(15,052	)		279,329		7,739
Employee compensation		1,191,651		730,293			1,499,636		1,257,034
Insurance		52,658		73,845			139,894		131,612
IT costs		37,952		14,199			52,111		26,195
Office administration		441,830		165,160			503,353		225,713
Travel & conference		365		220			19,454		1,479
Other		14,418		277,349			43,344		293,106
		2,019,167		1,720,116			2,814,670		1,974,333

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	A$			A$			A$			A$
Selling, general & administrative expenses
Accounting, tax and audit		94,137			159,483			301,052			357,139
Consultancy		42,759			78,061			86,092			121,090
Cost of sales		336,394			123,961			442,693			264,052
Doubtful debts		77,345			32,556			99,177			32,556
Insurance		25,364			148,763			189,291			322,991
IT		205,556			155,452			384,599			268,773
Legal		144,028			53,986			247,369			90,415
Manufacturing costs		(123,119	)		(158,182	)		(87,565	)		(58,318	)
Occupancy		92,701			196,554			235,949			365,521
Regulatory		30,722			52,606			134,063			192,436
Sales & Marketing		171,388			249,355			334,737			395,164
Employee compensation		2,251,631			2,506,227			4,916,779			4,888,308
Travel		102,711			182,498			193,904			304,122
Other		(147,683	)		(65,349	)		190,768			197,104
		3,303,934			3,715,972			7,668,908			7,741,354

Our operations are in Australia, US, Europe and Canada. The chief operating decision maker of the Company is the Chief Executive Officer and the Managing Director.

The Company’s material long-lived assets are predominantly based in Australia and Canada.

14. Subsequent Events

If the Proposed Transaction proceeds, the funds provided under the Facility Agreement and the proceeds raised under the associated equity raising will be used for general working capital purposes.

The key terms of the non-binding term sheet are summarised below:

●

Facility Limit: Up to A$8.5 million comprising:

○

First Draw: A$3.5 million available upon securityholder approval of the Proposed Transaction being obtained (see below); and

○

Second Draw: Up to A$5 million available in the period of 60 days to 120 days after the First Draw, subject to the approval of Viburnum.

●

Security: First ranking general security over the assets of the Company.

●

Term: 18 months from the First Draw.

●

Interest Rate: 15% per annum, capitalised and payable in two instalments at 12 months and 18 months from the First Draw.

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

●

Royalty: A perpetual royalty of 10% on gross revenue from the Company's water and wine testing strips, with the royalty increasing to 15% where the Second Draw is utilised by the Company.

●

Conditions: Completion of the Facility Agreement will be conditional upon certain matters being satisfied, including:

○

recommendation by the Independent Non-Executive Directors of the Company that securityholders vote in favour of the Proposed Transaction;

○

the Company progresses initiatives to divest its healthcare and HRL assets prior to entry into the Facility Agreement (an advisor has been appointed by the Company in this regard);

○

cap of A$250,000 on legal and other advisory fees associated with the facility;

○

Viburnum being granted the right to appoint an observer at all Board meetings of the Company;

○

the Company using its best endeavours to launch an ordinary equity offer under a Security Purchase Plan prior to any request by the Company under the Second Draw; and

○

completion of due diligence investigations on the Company to the satisfaction of Viburnum.

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operations and financial condition. You should read this analysis in conjunction with our audited consolidated financial statements and related footnotes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our most recent Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”). This Form 10-Q contains, including this discussion and analysis, certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which are intended to be covered by the safe harbors created by such acts. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements, including statements relating to future events and our future financial performance. Those statements in this Form 10-Q containing the words “anticipates”, “assumes”, “believes”, “can”, “could”, “estimates”, “expects”, “future”, “illustration”, “intends”, “may”, “plans”, “predicts”, “will”, “would” and similar expressions constitute forward-looking statements, although not all forward-looking statements contain such identifying words.

The forward-looking statements contained in this Form 10-Q are based on our current expectations, assumptions, estimates and projections about the Company and its businesses. All such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from those results expressed or implied by these forward-looking statements, including those set forth in this Quarterly Report on Form 10-Q. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Our Business

Universal Biosensors Inc (UBI) is a global biosensor company and a world leader in electrochemical cell technology. Utilising its patented biosensor technology, UBI has developed a diverse range of biosensor test strips used in our hand-held portable analyzers; for cost effective, effortless, and accurate detection of analytes of interest. Currently providing solutions for human health and wine production, UBI is primed to commercialise an environmental solution to test heavy metals in water.

Key developments include:

●

Developing a handheld water testing platform, AQUASCOUT, which can detect and monitor heavy water metals in water samples. AQUASCOUT is expected to be launched during the second half of 2025. The initial application of AQUASCOUT will be the testing of lead and copper in drinking water to enable cost-effective identification and removal of lead service line infrastructure by utilities

●

Total revenue decreased 26% and 11%, respectively for the three and six months ended June 30, 2025 when compared to the same period in the previous financial year

●

Operating costs decreased by 3% and increased by 6%, respectively for the three and six months ended June 30, 2025 when compared to the same period in the previous financial year

●

Net loss after tax increased 74% and 44%, respectively for the three and six months ended June 30, 2025 when compared to the same period in the previous financial year

Results of Operations

Analysis of Consolidated Revenue

The financial results of the products and services we generated revenues from during the three and six months ended June 30, 2025 and 2024 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	A$			A$			A$			A$
Revenue from products & services		1,208,764			1,625,566			2,763,423			3,095,076
Cost of goods sold and services		(2,415,458	)		(455,251	)		(3,126,773	)		(1,046,895	)
Gross profit/(loss)		(1,206,694	)		1,170,315			(363,350	)		2,048,181

Revenue from products and services decreased by 26% and 11% during the three and six months ended June 30, 2025 when compared to the same period in the previous financial year as the sales of medical devices products continues to be sluggish. This decline in revenue has impacted our gross loss and margins. The gross loss for the three and six months ended June 30, 2025 has also been impacted by provision of stock obsolescence of A$1,647,286 recorded during the current period.

Revenue from Products

The financial results of the coagulation, wine testing and veterinary diabetes products we sold during the respective periods are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	A$			A$			A$			A$
Xprecia		587,745			799,736			1,156,982			1,427,728
Sentia		506,565			541,683			1,199,714			1,068,371
Petrackr		33,440			30,559			100,867			55,722
		1,127,750			1,371,978			2,457,563			2,551,821
Cost of goods sold		(2,446,909	)		(343,949	)		(3,072,783	)		(825,416	)
Gross profit/(loss)		(1,319,159	)		1,028,029			(615,220	)		1,726,405

Our total revenue from products decreased by 18% during the three months ended June 30, 2025, compared to the same period in the previous financial year and remained largely flat for the six-month period. Stock provision of A$1,647,286 recorded during the current period has impacted our gross loss. Additionally, increased promotions by way of product discounts during the current financial year impacted our margins and gross profit.

Revenue from Xprecia decreased by 27% and 19% during the three and six months ended June 30, 2025, compared to the same period in the previous financial year as we lost a major customer towards the end of 2024. Sentia strip sales increased by 12% during the six months ended June 30, 2025, compared to the same period in the previous financial year due to increased promotions. Sentia sales remained largely flat during the three months ended June 30, 2025, compared to the same period in the previous financial year . Revenue from Petrackr for the respective periods has increased due to increased sales and marketing initiatives.

Revenue from Services

The financial results of the laboratory testing services we provided during the respective periods are as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025			2024
	A$		A$			A$			A$
Laboratory testing services		81,014		253,588			305,860			543,255
Cost of services		31,451		(111,302	)		(53,990	)		(221,479	)
Gross profit		112,465		142,286			251,870			321,776

Revenue from laboratory testing services decreased by 68% and 44% during the three and six months ended June 30, 2025, compared to the same period in the previous financial year as a result of decline in Xprecia sales. This decline in revenue has impacted the gross profit and margin during these periods.

Depreciation and Amortization Expenses

	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
	A$		A$			A$		A$
Depreciation		118,553		187,986			212,915		398,784
Amortization		43,647		44,517			87,294		88,339
Depreciation allocated to cost of goods sold & services		12,567		(9,894	)		25,201		(11,416	)
		174,767		222,609			325,410		475,707

Depreciation of fixed assets is calculated on a straight-line basis over the useful life of property, plant and equipment. Decrease in depreciation over the respective periods is as a result of certain assets fully depreciated.

Amortization expense represents the Company’s software.

Research and Development Expenses

Three Months Ended June 30,

Six Months Ended June 30,

2025

2024

2025

2024

Research and development expenses

2,019,167

1,720,116

2,814,670

1,974,333

Our research and development (“R&D”) expenditure increased by 17% and 43% during the three and six months ended June 30, 2025, compared to the same period in the previous financial year. The primary focus of the R&D activities during the six months ended June 30, 2025 were:

	●	further enhancement of certain Sentia tests that have already been launched
	●	developing a device to detect heavy metals and other impurities in water (“AQUASCOUT” project)
	●	developing the Company’s Oncology platform biosensors used for the detection, staging and monitoring of cancer
	●	developing the Company’s Aptamer based sensing platform

Research is focused on demonstrating technical feasibility of new technology applications and generally does not incur a large amount of expenses. Development activity is focused on turning these technology platforms into commercial-ready products and represents the majority of the Company’s research and development expenses. Increase in R&D is largely attributed to the AQUASCOUT project which is in the development phase and expected to be launched during H2 2025.

The timing and cost of any development program is dependent upon a number of factors including achieving technical objectives, which are inherently uncertain and subsequent regulatory approvals. We have project plans in place for all our development programs which we use to plan, manage and assess our projects. As part of this procedure, we also undertake commercial assessments of such projects to optimize outcomes and decision making.

R&D expenses consist of costs associated with research activities, as well as costs associated with our product development efforts, including pilot manufacturing costs. R&D expenses include:

●	consultant and employee related expenses, which include consulting fees, salaries and benefits;

●	materials and consumables acquired for the research and development activities;

●	verification and validation work on the various R&D projects including clinical trials;

●	external research and development expenses incurred under agreements with third party organizations and universities; and

●	facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment and laboratory and other supplies.

Selling, General and Administrative Expenses

Three Months Ended June 30,

Six Months Ended June 30,

2025

2024

2025

2024

Selling, general and administrative

3,303,934

3,715,972

7,668,908

7,741,354

Selling, general and administrative expenses consist principally of salaries and related costs, including stock-based compensation expense for certain personnel. Other selling, general and administrative expenses include sales and marketing costs to support our products in the market, shipping and handling costs incurred when fulfilling customer orders, repairs and maintenance, insurance, facility costs not otherwise included in R&D expenses, consultancy fees and professional fees including legal services and maintenance fees incurred for patent applications, audit and taxation services.

Selling, general and administrative expenses decreased by 11% and 1% during the three and six months ended June 30, 2025, compared to the same period in the previous financial year as management is taking steps to reduce costs.

Interest Income

Interest income decreased by 87% and 59% during the three and six months ended June 30, 2025, compared to the same period in the previous financial year. The decrease in interest income is attributable to the overall lower amount of funds available for investment.

Interest Expense

Interest expense relates to interest being charged on the secured short-term borrowing initiated by the Company for the 2025 financial year and the interest expense on finance lease liabilities.

Financing Costs

Disclosed in this account is accretion expense which is associated with the Company’s asset retirement obligations (“ARO”).

Research and Development Tax Incentive Income

As at June 30, 2025 there is reasonable likelihood that the aggregate turnover of the Company for the year ending December 31, 2025 will be less than A$20,000,000 and accordingly an estimated A$709,766 has been recorded as research and development tax incentive income for the six months ended June 30, 2025. The increase period on period is driven by the increase in eligible research and development expenditure incurred in the three and six months ended June 30, 2025 as compared to the same period in 2024.

Research and development tax incentive receivable for the 2023 financial year was received in June 2024.

Exchange Gain/(Loss)

Foreign exchange gains and losses arise from the settlement of foreign currency transactions that are translated into the functional currency using the exchange rates prevailing at the dates of the transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies.

Other Income

Other income is as follows for the relevant periods:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025			2024		2025		2024
	A$			A$		A$		A$
Rental income		39,891			36,391		80,396		73,213
Sundry		(26,280	)		29,126		11,291		35,056
		13,611			65,517		91,687		108,269

Critical Accounting Estimates and Judgments

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Significant items subject to such estimates and assumptions include provision for expected credit losses research and development tax incentive income, stock-based compensation expenses, asset retirement obligations and provision for stock obsolescence:

Provision for Expected Credit Losses

The Company evaluates the collectability of accounts receivable and records a provision for expected credit losses based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience.

Research and Development Tax Incentive Income

The refundable tax offset is one of the key elements of the Australian Government’s support for Australia’s innovation system and if eligible, provides the recipient with cash based upon its eligible research and development activities and expenditures. The calculation of the refundable tax offset requires judgement as to what is eligible research and development activity and expenditure and the outcome will change if different assumptions were used.

Stock-based Compensation Expenses

Probability of attaining vesting conditions and the fair value of the stock-based compensation is highly subjective and requires judgement, and results could change materially if different estimates and assumptions were used. The probability assumptions are critically examined by management each reporting period and reviewed by the board of directors for reasonableness.

Asset Retirement Obligations

ARO are legal obligations associated with the retirement and removal of long-lived assets. ARO reflects estimates of future costs directly attributable to remediating the liability, inflation, assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting future cash outflows. Changes in these factors can result in a change to the ARO recognized by the Company.

Provision for Stock Obsolescence

The Company has established a provision for stock obsolescence to reflect the estimated loss of inventory that is considered obsolete or slow-moving. The provision is calculated based on a specific identification method, where items are assessed for obsolescence based on age, usage, and potential for future sale.

Note 1, “Summary of Significant Accounting Policies” in Item 1 of this Form 10-Q and Note 1, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Condensed Financial Statements in Part II, Item 8 of the 2024 Form 10-K describes in further detail the significant accounting policies and methods used in the preparation of the Company’s consolidated condensed financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recognition of revenue and expenses. Actual results may differ from these estimates.

Financial Condition, Liquidity and Capital Resources

Net Cash/(Debt)

The accompanying consolidated condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the continuity of operations, realization of assets and the satisfaction of obligations in the normal course of business. The Company has experienced recurring losses since its inception and has not generated any significant revenues. The Company incurred a net loss of A$6,610,674 and A$10,448,624, respectively for the three and six month period ended June 30, 2025, and used A$3,719,264 and A$5,846,788, respectively during the three and six month period ended June 30, 2025 in cash to fund operations and had an accumulated deficit of A$113,660,090 and A$99,407,192, respectively as of June 30, 2025 and December 31, 2024. The Company expects to continue to generate operating losses for the foreseeable future. As of June 30, 2025, the Company had cash and cash equivalents of A$2,198,490 (December 31, 2024: A$8,544,105). The Company has not generated significant revenues resulting in the net cash outflows and accumulated losses to date and is forecasting to incur further cash outflows while growing the business over the coming period. The Company believes that its current cash and cash equivalents are only sufficient to fund its operations into Q3 2025 and this raises substantial doubt about the ability of the Company to continue as a going concern within one year from the date of the issuance of these consolidated condensed financial statements. The consolidated condensed financial statements do not include any adjustments that might result from the outcome of this going concern position. In view of these matters, continuation as a going concern is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and the success of its future operations. Management plan to fund the operations of the Company by growing revenue, pursuing joint venture or partnerships for its product portfolio, sale of its assets and raising cash through debt funding or the issuance of new equity, until such a time as the Company’s operations generate positive cash flows or other profitable investments may be achieved. Although the Company has commenced a process to raise additional capital, there are currently no binding written agreements in place for such funding or issuance of securities and there can be no assurance that such funding sources will be available at terms acceptable to the Company, or at all in the future. However, the Company has successfully raised new equity capital in the past. Management continues to explore options for the Company to continue as a going concern. The inability to obtain funding, as and when needed, would have a negative impact on the Company’s financial condition and ability to pursue its business strategies. If the Company has insufficient funding to meet its working capital needs, it could be required to limit or cease operations.

Our net cash position is shown below:

	June 30, 2025			December 31, 2024
	A$			A$
Cash and cash equivalents
Cash and cash equivalents		2,198,490			8,544,105
Debt
Short term debt/ loan		(207,880	)		(697,284	)
Net cash		1,990,610			7,846,821

Since inception, we have financed our business primarily through the issuance of equity securities, funding from strategic partners, government grants and rebates (including the research and development tax incentive income), cash flows generated from operations and a loan.

The Group has experienced net cash outflows over recent periods, predominantly in conducting research & development activities, product approval and registrations, launch of our products and support of the same in the marketplace. We continue to reduce research & development expenditure and other operating expenditure in the foreseeable future and focus on increasing our commercialization efforts. We are closely monitoring the success of our commercialization efforts in relation to the newly launched product portfolio and their impact on our cash position. Given the natural uncertainty that arises with the launch of new products, if we were to experience delays or encounter issues in these commercialization efforts, we would need and expect to adjust our operating expenditure accordingly, to ensure sufficient cash remains available to fund our operations for at least the next twelve months from the date of issuance. We do not have any external long-term debt obligations and are not subject to any covenant obligations.

Liquidity risk is the risk that the Company may encounter difficulty meeting obligations associated with financial liabilities. The Company manages liquidity risk through the management of its capital structure. The purpose of liquidity management is to ensure that there is sufficient cash to meet all the financial commitments and obligations of the Company as they come due. In managing the Company’s capital, management estimates future cash requirements by preparing a budget and if required, a multi-year plan for review and approval by the Board of Directors (“the Board”). The budget is reviewed and updated periodically and establishes the approved activities for the next twelve months and estimates the costs associated with those activities. The multi-year plan estimates future activity along with the potential cash requirements and is based upon management’s assessment of current progress along with the expected results from the coming years’ activity. Budget to actual variances is prepared and reviewed by management and are presented on a regular basis to the Board.

The carrying value of the cash and cash equivalents and the accounts receivables approximates fair value because of their short-term nature.

We regularly review all our financial assets for impairment. A financial asset is a non-physical asset whose value is derived from a contractual claim and in our case includes cash and cash equivalents, accounts receivables, fixed assets and equity shares. There were no impairments recognized on our financial assets as at June 30, 2025 or for the year ended December 31, 2024.

Measures of Liquidity and Capital Resources

The following table provides certain relevant measures of liquidity and capital resources:

	June 30, 2025		December 31, 2024
	A$		A$
Cash and cash equivalents		2,198,490		8,544,105
Working capital		3,805,811		13,811,809
Ratio of current assets to current liabilities		1.90		3.96
Shareholders’ equity per common share		0.02		0.06

The movement in cash and cash equivalents and working capital (calculated as current assets less current liabilities) during the above periods was primarily the result of ongoing investment in our R&D activities and the general operations of the Company. The Company also raised A$2.50 million via an institutional placement at an issue price of A$0.15 per New CDI in March 2024 and A$10.00 million pursuant to a fully underwritten entitlement offer in May 2024, at an issue price of $0.15 per New CDI. There were certain options exercised in March 2024 which raised A$0.47 million. The Company also received A$2.20 million of the research and development tax incentive receivable for the 2024 financial year in June 2025 and A$3.79 million of the research and development tax incentive receivable for the 2023 financial year in June 2024.

In relation to receivables, the Company performs ongoing credit evaluations of our customers. A provision for expected credit losses of A$130,134 has been determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends.

Summary of Cash Flows

	June 30, 2025			June 30, 2024
	A$			A$
Cash provided by/(used in):
Operating activities		(5,846,788	)		(5,174,257	)
Investing activities		(39,118	)		(111,687	)
Financing activities		(491,713	)		11,797,227
Net decrease in cash, cash equivalents and restricted cash		(6,377,619	)		6,511,283

Our net cash used in operating activities for all periods represents receipts offset by payments for our R&D projects including efforts involved in establishing and maintaining our manufacturing operations and selling, general and administrative expenditure. Cash outflows from operating activities primarily represent the ongoing investment in our efforts to promote brand awareness of our products, R&D activities and the general operations of the Company. As our products capture increases market share, we expect our inflows from the receipt from our customers to eventually exceed the cash outflows from operating activities.

Our net cash used in investing activities for all periods is primarily for the purchase of various equipment and for the various continuous improvement programs we are undertaking.

Our net cash used in financing activities for thew six month period ended June 30, 2025 was primarily for the repayment of the short-term loan. Our net cash increase in financing activities for the year ended December 31, 2024 is primarily the result of A$2.50 million raised via an institutional placement in March 2024 and A$10.00 million raised pursuant to a fully underwritten entitlement offer in May 2024. There were certain options exercised in March 2024 which raised A$0.47 million. The balance primarily represents proceeds received in the form of a short-term loan to finance our insurance program and repayment of the same.

Off-Balance Sheet Arrangement

As of June 30, 2025 and December 31, 2024, we did not have any off-balance sheet arrangements, as such term is defined under Item 303 of Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Segment Operating Performance

We operate in one segment. We are a specialist biosensors Company focused on the development, manufacture and commercialization of a range of point of use devices for measuring different analytes across different industries.

Our operations are in Australia, US, Europe and Canada.

The Company’s material long-lived assets are predominantly based in Australia and Canada.

Item 3

Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information called for by this Item.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures.

At the end of the period covered by this report, the Company and management evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e)). The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Peter Mullin, our Principal Executive Officer and Principal Financial Officer, reviewed and participated in this evaluation. Based on this evaluation, Peter Mullin concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting.

During the fiscal quarter ended June 30, 2025, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

Item

Legal Proceedings

None.

Item

Risk Factors

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the 2024 Form 10-K under the heading “Risk Factors,” any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price. There have been no material changes to the Company’s risk factors since the 2024 Form 10-K.

Item

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item

Defaults Upon Senior Securities

None.

Item

Mine Safety Disclosures

Not applicable.

Item

Other Information

None.

Item

Exhibits

Exhibit No	Description	Location
31.1	Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer)	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer)	Filed herewith
32	Section 1350 Certificate	Furnished herewith
101	The following materials from the Universal Biosensors, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 formatted in Inline Extensible Business Reporting Language (XBRL): (i) the Consolidated Condensed Balance Sheets, (ii) the Consolidated Condensed Statements of Comprehensive Income/(Loss), (iii) the Consolidated Condensed Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss), (iv) the Consolidated Condensed Statements of Cash Flows and (v) the Notes to Consolidated Condensed Financial Statements	As provided in Rule 406T of Regulation S-T, this information is furnished herewith and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
104	Cover page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.