| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of presentation The
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”)
as of June 30, 2023 and 2022. The consolidated financial statements and notes thereto give retrospective effect to the Reverse Stock Split for
all periods presented. All common stock, options exercisable for common stock, restricted stock units, warrants and per share amounts
contained in the consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods
presented. Principles
of consolidation These
consolidated financial statements include the accounts of the Company, all wholly owned and majority-owned subsidiaries in which the
Company has a controlling voting interest and, when applicable, variable interest entities in which the Company has a controlling financial
interest or is the primary beneficiary. Investments in affiliates where the Company does not exert a controlling financial interest are
not consolidated. All
significant intercompany transactions and balances have been eliminated upon consolidation. Equity
offering costs The
Company complies with the requirements of Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs Use
of estimates The
preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from
those estimates. Change
in accounting principle During the quarter ended June 30, 2023, the
Company performed an analysis on the useful life of its technology asset which resulted in increasing the useful life from 5 7 As the result of change in useful life, the
amortization expenses for the year ended June 30, 2023 decreased by $ 84,374 0.07 10.58 337,496 485,150 759,366 189,841 Business
combinations The
results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the
date of the acquisition. The Company uses the acquisition method of accounting and allocates the purchase price to the identifiable assets
and liabilities of the relevant acquired business at their acquisition date fair values. Any excess consideration over the fair value
of assets acquired and liabilities assumed is recognized as goodwill. The allocation of the purchase price in a business combination
requires the Company to perform valuations with significant judgment and estimates, including the selection of valuation methodologies,
estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages the assistance
of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities
assumed in a business combination. As a result, during the measurement period, which may be up to one year from the acquisition date,
the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion
of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any
subsequent adjustments are recorded to the consolidated statements of operations. Transaction costs associated with business combinations
are expensed as incurred and are included in selling, general and administrative expense in the consolidated statements of operations. Revenue
recognition Revenue
is accounted for under ASC 606 Revenue from Contracts with Customers
● Identify
the contract with a customer;
● Identify
the performance obligations in the contract;
● Determine
the transaction price;
● Allocate
the transaction price to performance obligations in the contract; and
● Recognize
revenue when or as the Company satisfies a performance obligation. The Company recognized revenue from contracts
with customers it satisfies its performance obligations by delivering the promised goods or
service deliverables to the customers. A good or service deliverable is transferred to a customer when, or as, the customer obtains
control of that good or service deliverable. Financial
information presented on a consolidated basis accompanied by disaggregated information about revenue and other income by product types
for the purpose of allocating resources and evaluating financial performance. Currently, the Company has two products offerings. Accordingly,
the Company has determined the following reporting segments (refer to Note 4, Segment Information):
1) Commercially
available Intelligent Fingerprinting Products (IFPG)
2) Development
Stage Saliva Glucose Biosensor Platform (SGBP) Revenues
are used to evaluate the performance of the Company’s segments, the progress of major initiatives and the allocation of resources.
All of the Company’s revenues are attributable to the IFPG segment during the year ended June 30, 2023. There were no Revenue
from the IFPG segment relates to the sale of readers, cartridges and accessories and is summarized as follows: SCHEDULE OF REVENUE SALES OF READERS CARTRIDGES AND ACCESSORIES
2023 2022
Year Ended June 30,
2023 2022
Sales of goods - cartridges $ 724,304 $ —
Sales of goods - readers 335,863 —
Other sales 196,705 —
Total revenue $ 1,256,872 $ — Other
income The
other income is mainly comprised of grant income and R&D tax refunds. a)
Grant income On
June 30, 2021, the Company executed a definitive grant agreement with the Australian Government to assist with building a manufacturing
facility. The grant has a total value of up to $ 4.7 Accounting
for the grant does not fall under ASC 606, Revenue from Contracts with Customers Accounting for Government Grants and Disclosure
of Government Assistance The
Australian Government grant proceeds, which will be used to reimburse construction costs incurred, meet the definition of grants related
to assets as the primary purpose for the payments is to fund the construction of a capital asset. Under IAS 20, government grants related
to assets are presented in the statement of financial position either by setting up the grant as deferred income that is recognized in
the statement of operation on a systematic basis over the useful life of the asset or by deducting the grant in arriving at the carrying
amount of the asset. Either of these two methods of presentation of grants related to assets in financial statements are regarded as
acceptable alternatives under IAS 20. The Company has elected to record the grants received initially as deferred income and deducting
the grant proceeds received from the gross costs of the assets or construction in progress (“CIP”) and the deferred grant
income liability. 646,116 391,408 Under
IAS 20, government grants are initially recognized when there is reasonable assurance the conditions of the grant will be met, and the
grant will be received. As of June 30, 2021, management concluded that there was reasonable assurance the grant conditions will be met,
and all milestone payment received. The total grant value of $ 4.7 1.4 2.1 After
initial recognition, under IAS 20, government grants are recognized in earnings on a systematic basis in a manner that mirrors the manner
in which the Company recognizes the underlying costs for which the grant is intended to compensate. Further, IAS 20 permits for recognition
in earnings either separately under a general heading such as other income, or as a reduction of the cost of the asset. The Company has
elected to recognize government grant income separately within other income for operating expenditures. Similarly, for capital expenditures,
the carrying amount of assets purchased or constructed out of the grant funds are presented net by deducting the grant proceeds received
from the gross costs of the assets or CIP and deferred grant income liability. A total of $ 127,944 51,258 b)
R&D tax refund The
Company measures the R&D grant income and receivable by considering the time spent by employees on eligible R&D activities and
R&D costs incurred to external service providers. The R&D tax refund receivable is recognized as the Company believes that it
is probable that the amount will be recovered in full through a future claim. A total of $ 609,684 385,888 Development
and regulatory approval costs Expenditures
relating to R&D are expensed as incurred and recorded in development and regulatory approval in the Consolidated Statements of Operations
and Other Comprehensive Loss. R&D expenses include external expenses incurred under arrangements with third parties; salaries and
personnel-related costs; license fees to acquire in-process technology and other expenses. The Company recognizes the benefit of refundable
R&D tax refunds as a R&D tax refund income when there is reasonable assurance that the amount claimed will be recovered (refer
to the R&D tax refund discussion below). Intellectual
property acquired for a particular research and development project and that have no alternative future uses (in other research and development
projects or otherwise) are expensed in research and development costs at the time the costs are incurred. In
certain circumstances, the Company may be required to make advance payments to vendors for goods or services that will be received in
the future for use in R&D activities. In such circumstances, the non-refundable advance payments are deferred and capitalized, even
when there is no alternative future use for the R&D, until the related goods or services are provided. In circumstances where amounts
have been paid in excess of costs incurred, the Company records a prepaid expense. Foreign
currency translation Assets
and liabilities of foreign subsidiaries are translated from local (functional) currency to reporting currency (U.S. dollar) at the
rate of exchange in effect on the consolidated balance sheets date; income and expenses are translated at the average rate of
exchange prevailing during the year. The functional currency of the Company is the United States dollar. Foreign currency movements
are recognized in other comprehensive loss on the consolidated statement of operations and other comprehensive income (loss) and
resulted in a gain of $ 212,639 126,875 Income
taxes In
accordance with the provisions of Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes As
of June 30, 2023, and 2022, the Company had no uncertain tax positions that qualified for either recognition or disclosure in the consolidated
financial statements. Additionally, the Company had no interest and penalties related to income taxes. The
Company accounts for current and deferred income taxes and, when appropriate, deferred tax assets and liabilities are recorded with respect
to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based
on the weight of all available evidence, it is more likely than not that some amount of the recorded deferred tax assets will not be
realized, a valuation allowance is established for that amount that, in management’s judgment, is sufficient to reduce the deferred
tax asset to an amount that is more likely than not to be realized. Cash and Cash equivalent The Company considers all highly liquid
investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. The carrying values of cash and cash
equivalents approximate their fair values due to the short-term nature of these instruments. As of June 30, 2023 and 2022, there
were no cash equivalents. The Company maintains cash accounts with financial institutions. At times, balances in these accounts may
exceed federally insured limits. The amounts over these insured limits as of June 30, 2023 and 2022 was $ 1,114,687 7,816,077 Inventories Inventories
are stated at the lower of cost or net realizable value. Cost comprises direct materials and, where applicable, other costs that have
been incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price
less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. General market conditions, as
well as the Company’s research activities, can cause certain of its products to become obsolete. The Company writes down excess
and obsolete inventories based upon a regular analysis of inventory on hand compared to historical and projected demand. The determination
of projected demand requires the use of estimates and assumptions related to projected sales for each product. These write downs can
influence results from operations. Account receivable, net and other receivables Trade
receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of
recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Company, and a failure to make contractual
payments for a period of greater than 90 days past due. Based
upon the assessment of these factors, the Company did not recognize bad debt provision during the year ended June 30, 2023
and June 30, 2022. Trade receivables are recognized net of bad debt provision. Property,
Plant and Equipment (“PPE”) & Construction in Progress (“CIP”) In
accordance with the ASC 360, Property, Plant, and Equipment, the Company’s PPE, is stated at cost net of accumulated
depreciation and impairment losses, if any. Costs incurred to acquire, construct,
or install PPE, before the assets is ready for use, are capitalized in CIP at historical cost. The carrying amount of assets purchased
or constructed out of the grant funds are presented net by deducting the grant proceeds received from the gross costs of the assets or
CIP. CIP is not depreciated until such time when the asset is substantially completed and ready for its intended use. Expenditures for
maintenance and repairs are charged to operations in the period in which the expense is incurred. Depreciation is calculated on a straight-line
basis over the estimated useful life of the asset using the following terms:
● Other equipment – 3
● Production equipment – 2 4
● Leasehold
improvements – shorter of asset’s estimated useful life and the remaining term of the lease The
assets’ residual values, useful lives and methods of depreciation are reviewed periodically and adjusted prospectively, if appropriate.
Equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising upon
de-recognition of the asset (calculated as the difference between the net disposal proceeds, if any, and the carrying value of the asset)
is included in gain or loss on sale of assets in the consolidated statements of operations in the period the asset is derecognized. Impairment
of Long-lived Assets and Goodwill Long-lived
assets consist of property and equipment, right-of-use assets and other intangible assets. We assess impairment of assets groups, including
intangible assets at least annually or more frequently if there are any indicators for impairment. Goodwill
represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination. We perform
an annual impairment test on goodwill in the fourth quarter of each fiscal year or when events occur or circumstances change that would,
more likely than not, reduce the fair value of a reporting unit below its carrying value. We may first assess qualitative factors, such
as general economic conditions, market capitalization, the Company’s outlook, market performance and forecasted financial performance
to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we determine
it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, an impairment test is not necessary.
If an impairment test is necessary, we estimate the fair value of a related reporting unit. If the carrying value of a reporting unit
exceeds its fair value, the goodwill of that reporting unit is determined to be impaired, and we will record an impairment charge equal
to the excess of the carrying value over the related fair value of the reporting unit. If we determine it is more likely than not that
goodwill is not impaired, a quantitative test is not necessary. During the year ended June 30, 2023, the Company’s market capitalization significantly declined and recurring
cash burn of the reporting unit and continuous cash support from the parent entity Intangible
assets Intangible assets are considered long-lived assets and are recorded at cost, less accumulated amortization and impairment
losses, if any. The definite lived intangible assets are amortized over their estimated useful lives, which do not exceed any contractual
periods. Certain of our intangible assets have been assigned an indefinite life as we currently anticipate
that these trade names and trademarks will contribute cash flows to the Company indefinitely. Indefinite-lived intangible assets are not
amortized, but are evaluated at least annually to determine whether the indefinite useful life is appropriate. Leases The
Company determines if an arrangement is a lease at its inception. Lease arrangements are comprised primarily of real estate for which
the right-of-use (“ROU”) assets and the corresponding lease liabilities are presented separately on the consolidated balance
sheet. ROU
assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease
payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated
present value of lease payments over the lease term. The lease term includes options to extend the lease when it is reasonably certain
that the option will be exercised. Leases with a term of 12 months or less are not recorded on the consolidated balance sheet. The
Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the
lease, which is derived from information available at the lease commencement date, considering publicly available data for instruments
with similar characteristics. The Company accounts for the lease and non-lease components as a single lease component. Employee benefits The costs of short-term employee benefits are recognized as a
liability and an expense, unless those costs are required to be recognized as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognized in the period in which the employee’s services are received.
Termination benefits are recognized immediately as an expense when the company is demonstrably committed to terminate the employment
of an employee or to provide termination benefits. Net
loss per share attributable to common shareholders (“EPS”) The
Company calculates earnings per share attributable to common shareholders in accordance with ASC Topic 260, Earning Per Share Potentially
dilutive common shares shall be calculated in accordance with the treasury share method, which assumes that proceeds from the exercise
of all warrants are used to repurchase common share at market value. The number of shares remaining after the proceeds are exhausted
represents the potentially dilutive effect of the securities. As
the Company has incurred net losses in all periods, certain potentially dilutive securities, including convertible preferred stock, warrants
to acquire common stock, and convertible notes payable have been excluded in the computation of diluted loss per share as the effects
are antidilutive. Recent
accounting pronouncements As
the Company is an emerging growth company, we have elected to defer the adoption of new accounting pronouncements until they would apply
to private companies. Latest
announcement: In
July 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-03,
Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities
from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718) (“ASU 2023-13”). This
update requires to disclose and present income or loss related to common stock transactions on the face of the income statement, (2)
to modify the existing classification and measurement of redeemable preferred shares and redeemable equity-classified shares (3) and
modify accounting treatment for stock-based compensation. The FASB has not set an effective date on ASU 2023-03 and adoption is permitted.
The Company is currently evaluating the impact of the provisions of ASU 2023-03 on its consolidated financial statement disclosures. Adopted: In
November 2021, the FASB issued ASU No. 2021-10, Government Assistance (“ASU 2021-10”). This update requires annual disclosures
about transaction with a government that are accounted for by applying a grant or contribution accounting model by analogy. Required
disclosures include (1) information about the nature of the transactions and the related accounting policy used to account for the transactions,
(2) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each
financial statement line item, and (3) significant terms and conditions of the transactions, including commitments and contingencies.
ASU 2021-10 is applicable for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted the
provisions of this amendment effective July 1, 2022. There was no significant impact to the consolidated financial statements. Refer
to disclosures within grant income in Note 3. In
August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options In
February 2016, the FASB issued ASU No. 2016-02, Leases Pending
adoption: In
October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers In
June 2016, the FASB issued ASU No. 2016-13 (Topic 326), Financial Instruments – Credit Losses Concentration
of credit risk The
Company places its cash and cash equivalents, which may at times be in excess of the Australia Financial Claims Scheme or the United
States’ Federal Deposit Insurance Corporation insurance limits, with high credit quality financial institutions and attempts to
limit the amount of credit exposure with any one institution. Fair
value of financial instruments The
accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major
asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price,
representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants
would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier
fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level
1 - Level
2- Level
3- Assets
and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the
fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its
entirety requires management to make judgments and consider factors specific to the asset or liability. The
carrying amounts of cash equivalents, prepaid and other assets, accounts payable and accrued liabilities are representative of their
respective fair values because of the short-term nature of those instruments. Fair
value option (“FVO”) for convertible notes The
Company elected the FVO for recognition of its convertible notes payable upon issuance as permitted under ASC 825, Financial
Instruments |
