Universal Biosensors (UVBIF) 10-Q 2022 Q1 Quarterly report

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 March 31, 2022

or

☐ 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: 177,988,504 shares of Common Stock, U.S.$0.0001 par value, outstanding as of April 22, 2022.

UNIVERSAL BIOSENSORS, INC.

TABLE OF CONTENTS

			Page
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)
	1)	Consolidated condensed balance sheets at March 31, 2022 and December 31, 2021	1
	2)	Consolidated condensed statements of comprehensive income/(loss) for the three months ended March 31, 2022 and 2021	2
	3)	Consolidated condensed statements of changes in stockholders’ equity and comprehensive income/(loss) for the three months ended March 31, 2022 and 2021	3
	4)	Consolidated condensed statements of cash flows for the three months ended March 31, 2022 and 2021	4
	5)	Notes to consolidated condensed financial statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3	Quantitative and Qualitative Disclosures About Market Risk		26
Item 4	Controls and Procedures		26
PART II	OTHER INFORMATION
Item 1	Legal Proceedings		27
Item 1A	Risk Factors		27
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3	Defaults Upon Senior Securities		27
Item 4	Mine Safety Disclosures		27
Item 5	Other Information		27
Item 6	Exhibits		27
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32
	Exhibit 101
	Exhibit 104
SIGNATURES			28

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)

	March 31, 2022			December 31, 2021
	A$			A$
ASSETS
Current assets:
Cash and cash equivalents		10,784,327			15,318,201
Inventories		2,407,897			2,143,504
Accounts receivable		1,259,957			476,164
Prepayments		1,083,715			399,290
Restricted cash		1,909,344			1,968,814
Other current assets		5,750,731			4,544,273
Total current assets		23,195,971			24,850,246
Non-current assets:
Property, plant and equipment		29,627,244			29,622,945
Less accumulated depreciation		(25,651,630	)		(25,523,265	)
Property, plant and equipment - net		3,975,614			4,099,680
Intangible assets		16,371,996			16,371,996
Less amortization of intangible assets		(4,124,380	)		(3,720,908	)
Intangible assets - net		12,247,616			12,651,088
Right-of-use asset - operating leases		4,893,907			2,050,336
Right-of-use asset - finance leases		65,432			0
Restricted cash		320,000			812,204
Other non-current assets		75,841			38,421
Total non-current assets		21,578,410			19,651,729
Total assets		44,774,381			44,501,975
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		346,572			436,763
Accrued expenses		4,168,491			2,800,815
Contingent consideration		2,004,812			2,067,255
Other liabilities		2,738,041			2,823,322
Contract liabilities		29,402			38,431
Lease liability - operating leases		693,713			500,284
Lease liability - finance leases		8,510			0
Employee entitlements liabilities		641,375			670,295
Short-term loan - secured		556,891			0
Short-term loan - unsecured		64,055			64,900
Total current liabilities		11,251,862			9,402,065
Non-current liabilities:
Asset retirement obligations		2,753,166			2,721,260
Employee entitlements liabilities		33,692			29,268
Deferred income tax liability		3,050,837			3,050,837
Lease liability - operating leases		4,435,322			1,690,716
Lease liability - finance leases		62,282			0
Total non-current liabilities		10,335,299			7,492,081
Total liabilities		21,587,161			16,894,146
Commitments and contingencies		0			0
Stockholders’ equity:
Preferred stock, US$0.01 par value. Authorized 1,000,000 shares; issued and outstanding nil at March 31, 2022 (nil at December 31, 2021)
Common stock, US$0.0001 par value. Authorized 300,000,000 shares; issued and outstanding 177,988,504 shares at March 31, 2022 (177,828,504 at December 31, 2021)		17,784			17,783
Additional paid-in capital		93,816,103			93,737,565
Accumulated deficit		(65,824,231	)		(55,317,296	)
Current year loss		(4,530,557	)		(10,506,935	)
Accumulated other comprehensive loss		(291,879	)		(323,288	)
Total stockholders’ equity		23,187,220			27,607,829
Total liabilities and stockholders’ equity		44,774,381			44,501,975

See accompanying Notes to Consolidated Condensed Financial Statements.

1

Universal Biosensors, Inc.

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

	Three Months Ended March 31,
	2022			2021
	A$			A$
Revenue
Revenue from products		1,280,325			1,163,690
Revenue from services		442,888			385,919
Total revenue		1,723,213			1,549,609
Operating costs and expenses
Cost of goods sold		663,861			542,037
Cost of services		640,505			297,069
Total cost of goods sold and services		1,304,366			839,106
Gross profit		418,847			710,503
Other operating costs and expenses
Product support		11,144			1,925
Depreciation and amortization		543,700			527,681
Research and development		3,557,115			1,407,507
Selling, general and administrative		1,919,427			1,189,817
Total other operating costs and expenses		6,031,386			3,126,930
Loss from operations		(5,612,539	)		(2,416,427	)
Other income/(expense)
Interest income		4,603			17,360
Interest expense		(7,462	)		0
Financing costs		(31,907	)		(32,492	)
Research and development tax incentive income		1,117,192			612,266
Exchange gain/(loss)		(36,186	)		123,767
Other income		35,742			265,217
Total other income		1,081,982			986,118
Net loss before tax		(4,530,557	)		(1,430,309	)
Income tax benefit/(expense)		0			0
Net loss		(4,530,557	)		(1,430,309	)
Loss per share
Net loss per share - basic and diluted		(0.03	)		(0.01	)
Average weighted number of shares - basic and diluted		177,893,726			177,621,854
Other comprehensive gain/(loss), net of tax:
Foreign currency translation reserve		31,409			(12,303	)
Other comprehensive income/(loss)		31,409			(12,303	)
Comprehensive loss		(4,499,148	)		(1,442,612	)

See accompanying Notes to Consolidated Condensed Financial Statements.

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Universal Biosensors, Inc.

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

Three Months Ended March 31, 2021

	Ordinary shares				Additional Paid-in Capital		Accumulated Deficit			Other comprehensive Loss			Total Stockholders’ Equity
	Shares		Amount
			A$		A$		A$			A$			A$
Balances at January 1, 2021		177,611,854		17,761		93,570,030		(55,317,296	)		(293,071	)		37,977,424
Net loss		0		0		0		(1,430,309	)		0			(1,430,309	)
Other comprehensive loss		0		0		0		0			(12,303	)		(12,303	)
Exercise of stock options issued to employees		10,000		1		2,299		0			0			2,300
Stock-based compensation expense		0		0		6,382		0			0			6,382
Balances at March 31, 2021		177,621,854		17,762		93,578,711		(56,747,605	)		(305,374	)		36,543,494

Three Months Ended March 31, 2022

	Ordinary shares				Additional Paid-in Capital		Accumulated Deficit			Other comprehensive Income/(Loss)			Total Stockholders’ Equity
	Shares		Amount
			A$		A$		A$			A$			A$
Balances at January 1, 2022		177,828,504		17,783		93,737,565		(65,824,231	)		(323,288	)		27,607,829
Net loss		0		0		0		(4,530,557	)		0			(4,530,557	)
Other comprehensive income		0		0		0		0			31,409			31,409
Exercise of stock options issued to employees		160,000		1		3,899		0			0			3,900
Stock-based compensation expense		0		0		74,639		0			0			74,639
Balances at March 31, 2022		177,988,504		17,784		93,816,103		(70,354,788	)		(291,879	)		23,187,220

See accompanying Notes to Consolidated Condensed Financial Statements.

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Universal Biosensors, Inc.

Consolidated Condensed Statements of Cash Flows (Unaudited)

	Three Months Ended March 31,
	2022			2021
	A$			A$
Cash flows from operating activities:
Net loss		(4,530,557	)		(1,430,309	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		651,580			587,894
Stock-based compensation expense		74,639			6,382
Non-cash lease expense		98,337			49,024
Unrealized foreign exchange (gains)/losses		83,089			(62,325	)
Change in assets and liabilities:
Inventories		(264,393	)		182,013
Accounts receivable		(783,793	)		(566,695	)
Prepayments and other assets		(1,890,505	)		(1,086,215	)
Other non-current assets		(37,421	)		0
Contract liabilities		(9,028	)		(773,682	)
Employee entitlements		(24,495	)		42,981
Accounts payable and accrued expenses		1,376,213			(178,975	)
Net cash used in operating activities		(5,256,334	)		(3,229,907	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(273,259	)		(150,573	)
Net cash used in investing activities		(273,259	)		(150,573	)
Cash flows from financing activities:
Proceeds from borrowings		1,002,404			20,245
Repayment of borrowings		(445,513	)		0
Proceeds from exercise of stock options issued to employees		3,900			2,300
Net cash provided by financing activities		560,791			22,545
Net decrease in cash, cash equivalents and restricted cash		(4,968,802	)		(3,357,935	)
Cash, cash equivalents and restricted cash at beginning of period		18,099,219			28,055,120
Effect of exchange rate fluctuations on the balances of cash held in foreign currencies		(116,746	)		90,208
Cash, cash equivalents and restricted cash at end of period		13,013,671			24,787,393

See accompanying Notes to Consolidated Condensed Financial Statements.

4

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

1. Our Business

We are a specialist biosensors company focused on commercializing a range of biosensors in oenology (wine industry), human health including oncology, coagulation, COVID-19, women’s health and fertility, non-human and environmental testing using our patented platform technology and hand-held point of use devices.

Key achievements during the first quarter of 2022 include:

● 15% sales growth from services revenue;

● 10% sales growth from products revenue;

● The global launch of Sentia’s Malic Acid product;

● The finalization of the development of Sentia’s Glucose product;

● Entering into Distribution Agreements with Vivelys USA and Vivelys Chile for the sale of Sentia’s wine testing platform device. Vivelys is part of the Oeneo Group (a major player in the wine sector with more than 10,000 customers);

● The commencement of a Sentia direct sales force in the USA;

● Further development of Sentia wine testing products;

● The establishment of a distribution centre in the USA to support the global expansion of the Company’s wine testing product sales. This is in addition to the distribution centres we have in Australia and Europe;

● Regulatory approval to sell Xprecia Prime in 32 countries in Europe;

● The commencement of an Xprecia Prime direct sales force in Europe;

● The continuing successful development and use of aptamer sensing technology on our hand-held platform device;

● The progression of clinical studies across 4 sites in the USA for Xprecia Prime;

● The progression of an Investigational Clinical Study (300 patient/+) for our Tn Antigen biosensor used for the detection, staging and monitoring of cancer;

● The continued development of our diabetes detection and monitoring biosensor product in animals; and

● The company invested A$3,557,115 in R&D which was an increase of A$2,149,608 compared to prior period. A$1,696,040 was invested into the development of the veterinarian blood glucose product and A$175,306 was spent on our FDA clinical trial for Xprecia Prime (both non-recurring expenditures once completed). Other R&D increases relate to our investment in our oncology, fertility and COVID biosensors.

2. Certain Uncertainties

Depending on the duration of the COVID-19 crisis and continued negative impacts on economic activity, the Company may experience negative impacts in 2022 which cannot be predicted.

3. 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 months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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, 2021 (the “2021 Form 10-K” or “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 24, 2022. The year-end consolidated condensed balance sheets data as at December 31, 2021 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

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 deferred income taxes, research and development tax incentive income and stock-based compensation expenses. Actual results could differ from those estimates.

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Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Recent Accounting Pronouncements           

The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on the Company's 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, 2021. There were no new material accounting standards issued in the fiscal first quarter of 2022 that impacted the Company.         

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).

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Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

● 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. The Company has not identified any collectability issues with respect to receivables.

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 performance guarantee issued in favor of a customer, tenant security deposits and credit card security deposits.

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 under the average cost method which approximates cost. 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 allowance is determined based on a review of individual accounts for collectability, generally focusing on those accounts that are past due. The expense to adjust the allowance for 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 is primarily represented by the estimated receivable in relation to the research and development tax incentive income.

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 capital assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. In performing the review, the Company estimates undiscounted cash flows from products under development that are covered by these patents and licenses. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying amount of the asset. If the evaluation indicates that the carrying value of an asset is not recoverable from its undiscounted cash flows, an impairment loss is measured by comparing the carrying value of the asset to its fair value, based on discounted cash flows.

7

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Intangible Assets

The intangible assets, having finite useful lives, are amortized over their estimated useful lives. Finite life intangible assets are amortized over the shorter of their contractual or useful economic lives. The intangible assets comprise of distribution rights and are amortized on a straight-line basis over ten years.

Impairment of Intangible Assets

Intangible assets with an indefinite life are tested for impairment at least annually and when there is an indication of impairment.

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.

Leases

On January 1, 2020, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”), using the modified retrospective method and used the effective date as the date of initial application. As a result of this adoption, the following accounting policies were implemented or changed.

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 are incurred.

8

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

As part of the adoption of ASU No. 2016-02, the Company elected the following practical expedients:

1) lease vs. non-lease components relating to the real estate asset class;

2) the short-term lease exemption; and

3) the package of practical expedients, which permits the Company to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. In addition, the Company elected not to adopt the practical expedient related to hindsight.

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 coagulation and wine testing devices and the provision of coagulation 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:

a) Identifying the contract with a customer;

b) Identifying the performance obligations within the customer contract;

c) Determining the transaction price;

d) Allocating the transaction price to the performance obligation; and

e) Recognizing revenue when/as performance obligations are satisfied.

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	Our point-of-care coagulation testing products use electrochemical cell 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 fixed.
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. Standard payment terms are generally 30-60 days upon invoice date. The transaction price is fixed.
Wine testing products	Our Sentia wine analyzer is used to measure free SO₂ and Malic Acid 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 fixed.

See Note 11 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.

9

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

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 legislative 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 which is an R&D entity involved in eligible 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$1,117,192 and A$612,266 for the three months ended March 31, 2022 and 2021, respectively. In the three months ended March 31, 2022 there is reasonable assurance that the aggregate turnover of the Company for the year ended December 31, 2022 will be less than A$20,000,000.

Federal and State Government Subsidies

In response to the COVID-19 pandemic, governments in the countries in which we operate implemented government assistance measures to assist in mitigating some of the impact of the pandemic on our results and liquidity. To the extent appropriate, we applied for such government grants in Australia and Canada and recognize the grants at their fair value as other income when there is reasonable assurance that we have complied with all conditions attached to them.

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.

10

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Employee Benefit Costs

For periods ending on or before June 30, 2021, the Company contributed 9.50% of each employee’s salary to standard defined contribution superannuation funds on behalf of all eligible UBS employees. For period commencing July 1, 2021, in line with legislative updates, the rate increased to 10%. 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 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. 

Income Taxes

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.  

We are subject to income taxes in Australia, Canada, the Netherlands and the United States. Tax returns up to and including the 2020 financial years have been filed in Australia, Canada and the United States for UBI (Australian consolidated group), HRL and UBI (US parent entity). Tax returns for the 2021 financial year will be filed for UBI, HRL, UBS, UBS LLC and UBS BV in 2022.

11

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

4. 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 such amounts shown in the consolidated condensed statements of cash flows.

	March 31, 2022		December 31, 2021
	A$		A$
Cash and cash equivalents		10,784,327		15,318,201
Restricted cash – current assets		1,909,344		1,968,814
Restricted cash – non-current assets		320,000		812,204
		13,013,671		18,099,219

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

	March 31, 2022		December 31, 2021
	A$		A$
Performance guarantee (a) - current assets		1,909,344		1,968,814
Collateral for facilities (b) - non-current assets		320,000		320,000
Performance guarantee (a) - non-current assets		0		492,204
		2,229,344		2,781,018

(a) Performance guarantee represents letter of credit issued in favour of Siemens pursuant to the 2019 Siemens Agreements. The performance guarantee was initially issued for US$5,000,000 and the same reduces in equal quarterly amounts over the 42 months with effect from September 18, 2019.

(b) Collateral for facilities represents bank guarantee of A$250,000 for commercial lease of UBS’ premises and security deposit on Company’s credit cards of A$70,000.

Interest earned on the restricted cash for the three months ended March 31, 2022 and 2021 was A$1,710 and A$5,444 respectively.

5. Inventories

	March 31, 2022		December 31, 2021
	A$		A$
Raw materials		908,190		1,207,077
Work in progress		633,384		410,731
Finished goods		866,323		525,696
		2,407,897		2,143,504

6. Receivables

	March 31, 2022		December 31, 2021
	A$		A$
Accounts receivable		1,259,957		476,164
Allowance for credit losses		0		0
		1,259,957		476,164

7. Leases

The Company’s lease portfolio consists primarily of operating leases for office space and equipment with contractual terms expiring from December 2022 to February 2032. Lease contracts may include one or more renewal options that allow the Company to extend the lease. 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.

(a) Operating Leases

On January 1, 2021, the lease for 1 Corporate Avenue was terminated and a new lease entered into simultaneously. The lease expires on December 31, 2025 with an option to renew the lease for two further terms of five years each. The renewal option periods have not been included in the lease term as the Company is not reasonably certain that they will be exercised.

12

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

On June 28, 2021, HRL entered into a premises lease, which commenced in January 2022, with a ten-year contractual period. The lease does not include an option to renew the lease for a further term.

	March 31, 2022			December 31, 2021
	A$			A$
Operating lease right-of-use assets:
Non-current		4,893,907			2,050,336
Operating lease liabilities:
Current		693,713			500,284
Non-current		4,435,322			1,690,716
Weighted average remaining lease terms (in years)		7.4			4.0
Weighted average discount rate		5.0	%		5.0	%

The components of lease income/expense were as follows:

	Three Months ended March 31,
	2022		2021
	A$		A$
Fixed payment operating lease expense		241,394		180,439
Short-term lease expense		3,574		0
Sub-lease income		35,561		45,600

The sub-lease income is deemed an operating lease.

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 March 31,
	2022		2021
	A$		A$
Cost of goods sold		24,594		23,078
Cost of services		96,204		24,753
Research and development		64,930		79,723
Selling, general and administrative		59,240		52,885
		244,968		180,349

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

	Three Months ended March 31
	2022		2021
	A$		A$
Operating cash outflows from operating leases		146,218		131,415

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

	Three Months ended March 31,
	2022		2021
	A$		A$
Right of use assets obtained in exchange for lease liabilities		3,035,194		0
Right of use asset modifications		0		(1,392,953	)

13

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Future lease payments are as follows:

	As at March 31, 2022
	A$
1 year		925,814
2 years		960,761
3 years		983,871
4 years		847,727
5 years		388,536
Thereafter		2,041,018
Total future lease payments		6,147,727
Less: imputed interest		(1,018,692	)
Total operating lease liabilities		5,129,035
Current		693,713
Non-current		4,435,322

(b) Finance Leases

On October 22, 2021, UBS entered into a lease arrangement to install solar panels and inverters ("panels"). The lease commenced in January 2022 upon installation of the panels. The lease has a term of seven years and an option to acquire at the end of the term.

	March 31, 2022			December 31, 2021
	A$			A$
Finance lease right-of-use assets:
Non-current		65,432			0
Finance lease liabilities:
Current		8,510			0
Non-current		62,282			0
Weighted average remaining lease terms (in years)		6.9			-
Weighted average discount rate		4.7	%		-

The components of lease income/expense were as follows:

	Three Months ended March 31,
	2022		2021
	A$		A$
Fixed payment finance lease expense – Amortization		2,337		0
Fixed payment finance lease expense – Interest expense		824		0
		3,161		0

The components of the fixed payment finance lease expense as classified in the consolidated condensed statements of comprehensive income/(loss) are as follows:

	Three Months ended March 31,
	2022		2021
	A$		A$
Selling, general and administrative		2,337		0
Interest expense		824		0
		3,161		0

There were 0 finance lease payments made in the first quarter of 2022 for the Company’s finance lease.

14

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

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

	Three Months ended March 31,
	2022		2021
	A$		A$
Right of use assets obtained in exchange for lease liabilities		66,990		0

Future lease payments are as follows:

	As at March 31, 2022
	A$
1 year		11,649
2 years		11,649
3 years		11,649
4 years		11,649
5 years		11,649
Thereafter		25,239
Total future lease payments		83,484
Less: imputed interest		(12,692	)
Total operating lease liabilities		70,792
Current		8,510
Non-current		62,282

As of March 31, 2022, the Company has not entered into any operating or finance lease agreements that have not yet commenced.

8. Contingent Consideration

Pursuant to the Siemens Acquisition and the agreement dated September 2019, the Company has agreed to pay US$1,500,000 to Siemens within five days of Siemens achieving a pre-defined milestone. The Company has the discretion of advising Siemens when the milestone is to be achieved but from the date notification is sent by the Company, Siemens has 90 days to fulfill this milestone. Notification has not yet been issued to Siemens. Once the milestone is achieved, it will enable the Company to use Siemens proprietary reagent which will allow the Company to access markets in certain jurisdictions.

9. Other Liabilities

Other liabilities represents a marketing support payment due to one of our partners and is payable in US dollars. The balance will be paid once supporting documentation has been provided to the Company.

10. Borrowings

The unsecured loan is a government guaranteed loan called Canada Emergency Business Account (CEBA) of CAD$60,000 to help eligible businesses with operating costs. CAD$40,000 was received by the Company in 2020 and CAD$20,000 in 2021. This is among the business support measures introduced in the Canadian Federal Government’s COVID-19 Economic Response Plan, with the following terms:

● the loan is interest-free and no principal repayment is required before December 31, 2022;

● if the Company chooses to repay at least CAD$40,000 of the loan by December 31, 2022, the remaining balance will be forgiven;

● if the loan is not repaid by the above mentioned date, it will be converted into a 3-year term loan and will be charged an interest rate of 5% per annum. Interest-only payments are required each month; and

● at the end of the 3-year term, the entire balance of the loan is due for repayment by December 31, 2025.

The secured loan is a short-term loan facility the Company entered into to finance its 2022 insurance premium. The total amount financed was A$1,002,404 and has the following terms:

● the facility is repayable in 9 monthly instalments which commenced in January 2022;

● interest is being charged at an effective annual interest rate of 1.49%; and

● 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.

15

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

11. 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 March 31
	2022		2021
	A$		A$
Major product/service lines
Coagulation testing products		964,589		827,905
Laboratory testing services		442,888		385,919
Wine testing products		315,736		335,785
		1,723,213		1,549,609
Timing of revenue recognition
Products and services transferred at a point in time		1,723,213		1,549,609
		1,723,213		1,549,609

Contract Balances

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

	March 31,
	2022		2021
	A$		A$
Receivables		1,259,957		639,768
Contract liabilities		29,402		854,744

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:

	Three Months ended March 31,
	2022			2021
	A$			A$
Contract Liabilities - Current
Opening balance		38,431			1,628,426
Closing balance		29,402			854,744
Net increase/(decrease)		(9,029	)		(773,682	)

The Company expects all of the Company’s contract liabilities to be realized by December 31, 2022.

12. Other Income

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

16

 

Universal Biosensors, Inc.

Notes to Consolidated Condensed Financial Statements (Unaudited)

Other income is as follows for the relevant periods:

	Three Months Ended March 31
	2022		2021
	A$		A$
Insurance recovery		0		1,175
Federal and state government subsidies		0		82,992
Rental income		35,561		45,600
Other income		181		135,450
		35,742		265,217

Federal and state government subsidies primarily includes the Canadian Emergency Wage Subsidy which represents assistance provided by government authorities as a stimulus during COVID-19.

13. 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 March 31, 2022
Foreign currency translation reserve		31,409			0		31,409
Reclassification for gains realized in net income/(loss)		0			0		0
Other comprehensive income		0			0		0
Other comprehensive income		31,409			0		31,409
Three Months Ended March 31, 2021
Foreign currency translation reserve		(12,303	)		0		(12,303	)
Reclassification for gains realized in net income/(loss)		0			0		0
Other comprehensive loss		0			0		0
Other comprehensive loss		(12,303	)		0		(12,303	)

14. 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:

Mr. Coleman is a Non-Executive Chairman of the Company and Executive Chairman of Viburnum Funds Pty Ltd. Viburnum Funds Pty Ltd, as an investment manager for its associated funds, holds a beneficial interest and voting power over approximately 16% of our shares.

Subsequent to year end on April 20, 2022, the Company announced a fully underwritten non-renounceable rights issue of new CHESS depositary interests over fully paid ordinary shares in UBI (“New CDIs”) to raise approximately A$20 million (“Entitlement Offer”) at a ratio of 1 New CDI for every 6.85 existing CDIs held at the record date, being April 27, 2022. The Entitlement Offer is fully underwritten by Viburnum Funds Pty Ltd (“Viburnum”). Refer to Note 17 for further details of the Company’s subsequent event.

There were no material related party transactions or balances as at March 31, 2022 other than as disclosed above.

15. 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 March 31, 2022 and December 31, 2021. Purchase commitments contracted for as at March 31, 2022 and December 31, 2021 were A$1,008,840 and A$881,134 respectively.

Refer to note 8 for details of the Company’s Contingent Consideration.

17

 

16. Segment Information

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. 

We operate predominantly in one geographical area, being Australia.  

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

17. Subsequent Events

Institutional Placement

On April 20, 2022 ( April 21, 2022, in Australia), the Company agreed to issue 7,792,208 CHESS Depositary Interests (“CDIs”) over its ordinary shares of common stock, $0.0001 par value per share (“ordinary shares”), at A$0.77 per CDI, to certain institutional investors based in Australia and New Zealand (“Placement”), and raised an aggregate of A$6 million in gross proceeds. Petra Capital Pty Limited (“Petra”) acted as sole lead manager and sole bookrunner for the Placement. The Company paid Petra a management fee of A$180,000 and a placement fee of A$120,000 in connection with the Placement. The Company raised A$5.7 million net of management and placement fees paid to Petra in the Placement. 

Entitlement Offer 

On April 20, 2022, the Company announced a fully underwritten pro rata non-renounceable entitlement offer of CDIs to raise approximately A$20 million (“Entitlement Offer”) at a ratio of 1 New CDI for every 6.85 existing CDIs held as of April 27, 2022 by eligible holders of CDIs at A$0.77 per CDI (the “Offer Price”). Securityholders eligible for Entitlement Offer who take up their full entitlement, may also participate in a top-up facility by applying for additional CDIs in excess of their entitlement at the Offer Price, up to a maximum of 100% of their Entitlement.

In connection with the Entitlement Offer, on April 19, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Viburnum Funds Pty Ltd (the “Underwriter”). The Non-Executive Chairman of the Company, Mr. Craig Coleman, holds 33% of the issued shares in the Underwriter and is also an Executive Chairman and associate of the Underwriter.

Pursuant to the terms of the Underwriting Agreement, the Underwriter agreed to take up its full entitlement under the Entitlement Offer and fully underwrite the Entitlement Offer, which means that the Underwriter has agreed to subscribe for or procure others to subscribe for all securities (if any) not subscribed for by the Company’s eligible securityholders under the Entitlement Offer.

The Company also agreed, subject to the approval of the stockholders of the Company, to issue to the Underwriter (or its nominee) unlisted options to purchase up to 3,840,000 ordinary shares, in two tranches, as its underwriting fee (the “Underwriter Options”) in lieu of cash compensation. The Underwriter Options will vest upon issue, and have an expiry date of 3 years from their date of issue. The exercise price in respect of half of the Underwriter Options will be an amount equal to 120% of the Offer Price, or A$0.92. The second half of the Underwriter Options will have an exercise price equal to 130% of the Offer Price, or A$1.00. The value of the Underwriter Options (calculated based on the Black-Scholes model) is 3.4% of the underwritten amount of the Entitlement Offer of A$20 million, or A$0.68 million. If the stockholders of the Company do not approve the issuance of the Underwriter Options, or the Company otherwise fails to issue the Underwriter Options by June 30, 2022, the Company will be obligated to pay the Underwriter a cash underwriting fee of 4.5% of the underwritten amount of A$20 million, or A$0.9 million.

Not an Offer or Sale; Ineligible Securityholders

This Quarterly Report on Form 10-Q does not constitute an offer to sell or a solicitation of an offer to buy the CDIs offered pursuant to the Entitlement Offer or the Placement, nor shall there be any offer or sale of the CDIs in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

No securityholders of the Company with a registered address outside of Australia or New Zealand, or who are, or who are acting for the benefit of, U.S. Persons are invited, or will be permitted, to participate in the Entitlement Offer or purchase securities sold in the Entitlement Offer. The Company has instituted procedures to prevent any person who is not a resident of Australia or New Zealand, or any person who is, or who is acting for the benefit of, a U.S. Person, from purchasing securities offered or sold in the Entitlement Offer.

None of the CDI’s offered or sold in the Entitlement Offer or the Placement, and none of the ordinary shares evidenced thereby, have been or will 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.

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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.

Results of Operations

Analysis of Consolidated Revenue

Our total revenue increased by 11% during the three months ended March 31, 2022, compared to the same period in the previous financial year.

Revenue from Products

The financial results of the laboratory testing products and wine testing products we sold during the respective periods are as follows:

	Three Months Ended March 31,
	2022			2021
	A$			A$
Revenue from products		1,280,325			1,163,690
Cost of goods sold		(663,861	)		(542,037	)
Gross profit		616,464			621,653

The 10% increase in revenue from products during the three months ended March 31, 2022, compared to the same period in the previous financial year was driven by growth in sales of coagulation testing products as demand increased. During the three months ended March 31, 2021 the Company made its first sales of Sentia products to a distributor in Australia which was primarily a “stock” order. Sales during the 2022 quarter represent more recurring consumable use of Sentia products compared to the prior period.

Revenue from Services

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

	Three Months Ended March 31,
	2022			2021
	A$			A$
Laboratory testing services		442,888			385,919
Cost of services		(640,505	)		(297,069	)
Gross profit/(loss)		(197,617	)		88,850

Revenue from laboratory testing increased by 15% during the three months ended March 31, 2022, compared to the same period in the previous financial year because of new contracts won and an expanded customer base. This growth is despite HRL losing revenue hours due to relocation to their new facility.

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Adjusted EBITDA

We use Adjusted EBITDA to evaluate our financial performance. Adjusted EBITDA are financial measures that are not presented in accordance with U.S. GAAP. Adjusted EBITDA is net loss before interest, taxes, depreciation, amortization, accretion of asset retirement obligations and stock-based compensation expense. Management believes the presentation of Adjusted EBITDA provides useful information to investors to make informed investment decisions, including our ability to generate earnings sufficient to service our debt and enhances understanding of our financial performance and operational trends. These measures are not in accordance with, or an alternative for, U.S. GAAP. The most comparable U.S. GAAP measure is net loss. Consolidated Adjusted EBITDA should not be considered in isolation or as a substitution for analysis of our results as reported under U.S. GAAP. Additionally, they may not be comparable to other similarly titled measures of other companies.

Adjusted EBITDA for the respective periods and a reconciliation of net loss to Adjusted EBITDA is as follows:

	Three Months Ended March 31,
	2022			2021
	A$			A$
Net loss		(4,530,557	)		(1,430,309	)
Interest income		(4,603	)		(17,360	)
Interest expense		7,462			0
Depreciation and amortization		651,580			587,894
Accretion expense		31,907			32,492
Stock-based compensation expense		74,639			6,382
Adjusted EBITDA		(3,769,572	)		(820,901	)

The decline in Adjusted EBITDA during the three months ended March 31, 2022, compared to the same period in the previous financial year is primarily a result of increased investment in R&D. The company invested an additional A$2,149,608 (compared to prior period) of which A$1,696,040 was invested into the development of the veterinarian blood glucose product and A$175,306 was spent on our FDA clinical trial for Xprecia Prime (both non-recurring expenditures once completed). Other R&D increases relate to our investment in our oncology, fertility and covid biosensors. Selling, general and administrative expenditure increased A$729,610 as a result of increased sales activity (including sales staff) for Sentia and Coagulation products and insurance costs.

Product Support

Product support relates to post-market technical support provided by us for the Xprecia Stride and Wine testing devices.

Depreciation and Amortization Expenses

	Three Months Ended March 31,
	2022		2021
	A$		A$
Depreciation:
Charged to cost of goods sold and services		107,155		60,213
Charged to other operating costs and expenses		138,616		124,209
		245,771		184,422
Amortization:
Charged to other operating costs and expenses		405,809		403,472
Total depreciation and amortization		651,580		587,894

Depreciation of fixed assets is calculated on a straight-line basis over the useful life of property, plant and equipment. Depreciation is allocated to cost of goods sold and R&D based on output. The increase in depreciation charged to cost of goods sold and services during the three months ended March 31, 2022, compared to the same period in the previous financial year is due to an increase in a full quarter of depreciation charges allocated to the wine testing product which was previously only launched part way through the first quarter in 2021 and an investment in property, plant and equipment being used for commercial production. Overall, depreciation has increased as a result of the Company’s investment in property, plant and equipment during the twelve months ended March 31, 2022, primarily being used for R&D activities in addition to commercial production.

Amortization expense predominantly represents intangible assets amortized over their estimated useful lives. These intangible assets were acquired in September 2019 pursuant to the Siemens Acquisition and are being amortized on a straight-line basis over ten years. Amortization expense also includes the amortization expense calculated on the Company’s finance lease liabilities.

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Research and Development Expenses

R&D expenditure principally reflects the effort required in product development of the tests we are developing.

The primary focus of the R&D activities during the three months ended March 31, 2022 were developing the Company's:

● additional tests on our wine testing platform;

● next generation PT-INR Coagulation platform including FDA clinical trial programs;

● Tn Antigen biosensor used for the detection, staging and monitoring of cancer;

● biosensor strip and meter to be used for the detection and monitoring of diabetes in non-humans; and

● aptamer based sensing platform including a COVID-19 test.

R&D expenditure increased by 153% during the three months ended March 31, 2022, compared to the same period in the previous financial year because of the increased development activities noted above.

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.

Additionally, R&D expenses are related to the development of new technologies and products based on the electrochemical cell platform.

The Company conducts R&D activities to build an expanding portfolio of product-based revenues and cash flows and increase the value of the Company’s core technology assets. Research is focused on demonstrating technical feasibility of new technology applications. Development activity is focused on turning these technology platforms into commercial-ready products and represents the majority of the Company’s R&D expenses.

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

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 accounting services.

General and administrative expenses increased by 61% during the three months ended March 31, 2022, compared to the same period in the previous financial year primarily due to an investment in the Company’s sales and marketing strategy. The Company’s direct sales force in the USA and Europe for our wine and coagulation testing products commenced in the first quarter of 2022.

Interest Income

Interest income decreased by 73% during the three months ended March 31, 2022, compared to the same period in the previous financial year. The decrease in interest income is attributable to the lower amount of funds available for investment and lower interest rates.

Financing Costs

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

Interest Expense

Interest expense relates to interest being charged on the secured short-term borrowing initiated by the Company for the 2022 financial year and the interest expense on finance lease liabilities.

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Research and Development Tax Incentive Income

As at March 31, 2022 there is reasonable assurance that the aggregate turnover of the Company for the year ending December 31, 2022 will be less than A$20,000,000 and accordingly an estimated A$1,117,192 has been recorded as research and development tax incentive income for the three months ended March 31, 2022. The increase year on year is driven by the increase in eligible research and development expenditure incurred in the three months ended March 31, 2022 as compared to the same period in 2021.

Research and development tax incentive income for the 2021 financial year has not yet been received and as such is recorded in “Other current assets” in the consolidated condensed balance sheet.

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 March 31
	2022		2021
	A$		A$
Insurance recovery		0		1,175
Federal and state government subsidies		0		82,992
Rental income		35,561		45,600
Other income		181		135,450
		35,742		265,217

Federal and state government subsidies primarily includes the Canadian Emergency Wage Subsidy which represents assistance provided by government authorities as a stimulus during COVID-19.

Certain Uncertainties

Depending on the duration of the COVID-19 crisis and continued negative impacts on economic activity, the Company may experience negative impacts in 2022 which cannot be predicted.

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 deferred income taxes, research and development tax incentive income and stock-based compensation expenses:

Deferred Income Taxes

We compute our deferred income taxes based on the statutory tax rates, future forecasts and tax planning opportunities. Judgement is required in determining our future forecasts and evaluating our tax positions.

Our estimates are made based on the best available information at the time we prepare our consolidated condensed financial statements. In making our estimates, we consider the impact of legislative and judicial developments. As these developments evolve, we update our estimates, which, in turn, may result in adjustments to our effective tax rate.

We anticipate realization of a significant portion of our deferred tax assets through the reversal of existing deferred tax liabilities. Although realization is not assured, management believes it is more likely than not that our deferred tax assets, net of valuation allowances, will be realized.

Uncertain tax positions taken or expected to be taken in a tax return are recognized (or derecognized) in the financial statements when it is more likely than not that the position would be sustained on its technical merits upon examination by tax authorities, taking into account available administrative remedies and litigation. Assessment of uncertain tax positions requires significant judgments relating to the amounts, timing and likelihood of resolution.

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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.

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 are used.

Note 3, “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 Financial Statements in Part II, Item 8 of the 2021 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. There have been no material changes to the Company’s critical accounting policies and estimates since the 2021 Form 10-K. 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 Financial Assets

Our net financial assets position is shown below:

	March 31, 2022		December 31, 2021
	A$		A$
Financial assets
Cash and cash equivalents		10,784,327		15,318,201
Accounts receivable		1,259,957		476,164
Total financial assets		12,044,284		15,794,365
Debt
Short-term debt/ loan		620,946		64,900
Total debt		620,946		64,900
Net financial assets		11,423,338		15,729,465

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 decline in our net financial assets position is primarily a result of ongoing investment in our R&D activities and the general operations of the Company.

We believe we have sufficient cash and cash equivalents to fund our operations for at least the next twelve months from the date of issuance. 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 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 are 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. There were no impairments recognized as at March 31, 2022 or for the year ended December 31, 2021.

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The Company is continuing to monitor the potential impact of COVID-19, if any, on the Company’s business and financial position.

Derivative Instruments and Hedging Activities

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider our own and counterparty credit risk.  For the three months ended March 31, 2022 and for the year ended December 31, 2021, we did not have any assets or liabilities that utilize Level 3 inputs.  

We had no derivatives or outstanding contracts in place through the period ended March 31, 2022 and for the year ended December 31, 2021.

Measures of Liquidity and Capital Resources

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

	March 31, 2022		December 31, 2021
	A$		A$
Cash and cash equivalents		10,784,327		15,318,201
Working capital		11,944,109		15,448,181
Ratio of current assets to current liabilities		2.06		2.64
Shareholders’ equity per common share		0.13		0.16

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.

We have not identified any collection issues with respect to receivables.

Summary of Cash Flows

	Three Months ended March 31, 2022			Year Ended December 31, 2021
	A$			A$
Cash provided by/ (used in):
Operating activities		(5,256,334	)		(9,896,620	)
Investing activities		(273,259	)		(664,584	)
Financing activities		560,791			95,621
Net decrease in cash, cash equivalents and restricted cash		(4,968,802	)		(10,465,583	)

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 R&D activities and the general operations of the Company.

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 decrease in financing activities for the three months ended March 31, 2022 represents repayments of the Company’s short-term loan facility. This was offset by funds received in relation to the exercise of stock options issued to employees. Our net cash increase in financing activities for the year ended December 31, 2021 represents CAD$20,000 received in the form of a long-term unsecured government guaranteed loan which was introduced in the Canadian Federal Government’s COVID-19 Economic Response Plan and funds received in relation to the exercise of stock options issued to employees.

Off-Balance Sheet Arrangement

As of March 31, 2022 and December 31, 2021, 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.

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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. 

We operate predominantly in one geographical area, being Australia.     

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

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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. 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. John Sharman, Principal Executive Officer and Salesh Balak, Principal Financial Officer, reviewed and participated in this evaluation. Based on this evaluation, Messrs. Sharman and Balak 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 March 31, 2022, there were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation referred to above in this Item 4 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

Item 1           Legal Proceedings

None.

Item 1A         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 2021 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 2021 Form 10-K.

Item 2           Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3            Defaults Upon Senior Securities

None.

Item 4            Mine Safety Disclosures

Not applicable.

Item 5           Other Information

None.

Item 6           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 March 31, 2022 formatted in Inline Extensible Business Reporting Language (Inline 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)

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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.

	UNIVERSAL BIOSENSORS, INC. (Registrant)
	By:	/s/ John Sharman
Date: April 29, 2022		John Sharman
		Principal Executive Officer

	By:	/s/ Salesh Balak
Date: April 29, 2022		Salesh Balak
		Principal Financial Officer

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