Intelligent Bio Solutions Inc. Financial Report Analysis: Insights and Recommendations

Key Insights Snapshot

• Net Loss (Q4 2024): $(2,249,470) vs. $(1,969,641) (Q4 2023) - A 14.2% increase in loss.
• Total Revenue (Q4 2024): $607,494 vs. $764,063 (Q4 2023) - A decline of 20.5%.
• Working Capital Deficit: $(341,243).
• Shareholders' Equity: $4,203,388 as of December 31, 2024.
• Market Offering: Raised approximately $676,619 from the sale of 438,367 shares.
• Recommendation: Hold - The company is facing significant challenges, but potential for recovery exists with strategic management.

Detailed Financial Analysis

Revenue Performance

Intelligent Bio Solutions Inc. reported a total revenue of $607,494 for Q4 2024, a significant decrease of 20.5% compared to $764,063 in the same quarter last year. For the six months ending December 31, 2024, the total revenue was $1,479,781, down from $1,560,157 in 2023.

Breakdown of Revenue Sources:

• Sales of Goods - Cartridges: Increased from $330,949 (Q4 2023) to $388,297 (Q4 2024), marking a 17.3% growth.
• Sales of Goods - Readers: Decreased sharply from $285,889 to $120,787, a decline of 57.8%.
• Other Sales: Fell from $147,225 to $98,410, a 33.1% decrease.

This revenue decline, particularly in the readers segment, indicates potential issues with product demand or market saturation.

Profitability and Losses

The company recorded a net loss of $2,249,470 for Q4 2024, up from $1,969,641 in Q4 2023. Although the net loss has increased, it has shown a slight improvement year-to-date, with a total loss of $4,935,103 compared to $4,394,845 in the prior year. The increase in losses raises concerns about the company's ability to control costs and generate profitable growth.

Shareholders' Equity and Capital Structure

As of December 31, 2024, total shareholders' equity stood at $4,203,388. The company has been actively managing its equity through the exercise of warrants and the issuance of new shares. During the reporting period, 793,930 shares were issued due to warrants exercised, resulting in a capital increase. However, the ongoing issuance of shares raises concerns about potential dilution for existing shareholders.

Liquidity Concerns

Intelligent Bio Solutions has reported a working capital deficit of $341,243 and expressed substantial doubts regarding its ability to continue as a going concern. The company indicated that its current cash of approximately $2.24 million may be insufficient to fund operations for the next twelve months. This concern is compounded by the reliance on external funding to meet working capital needs.

Market and Competitive Landscape

The competitive landscape for Intelligent Bio Solutions is challenging. The decline in revenues from product categories, particularly in readers, indicates potential competitive pressure or market shifts. Moreover, the overall economic environment and rising interest rates may impede growth prospects, as investors are becoming more cautious.

Future Outlook

The company plans to continue exploring avenues for funding, including an At The Market (ATM) Offering, which allows it to sell up to $3 million in common stock. The recent raise of $676,619 from the sale of 438,367 shares is a step in this direction, providing some liquidity but also increasing the risk of shareholder dilution.

Recommendations

Given the current financial metrics and market conditions, the recommendation is to Hold. While the company is facing significant challenges with declining revenue and increasing losses, it is also actively seeking to improve its financial standing through equity raises and market offerings. Investors should monitor the company’s ability to execute its business plan, manage costs, and stabilize its revenue streams before making further investment decisions.

In conclusion, Intelligent Bio Solutions Inc. is at a critical juncture. While there are elements of potential recovery, including revenue growth in specific segments, the overall financial health and market conditions necessitate a cautious approach. Investors should keep an eye on upcoming quarterly reports and strategic initiatives that the company undertakes to navigate through this difficult financial landscape.