Annual Report
For the year ended December 31, 2023
Contents
1 Letter from the Chairman and CEO
2 Form 10-K
83 ASX Additional Information
85 Corporate Directory
Letter from the
Chairman and the CEO
Dear Shareholders,
During 2023, UBI launched and recorded first sales for 6 new products being:
Graham McLean
Chairman
John Sharman
CEO
• Sentia Acetic Acid;
• Sentia Titratable Acidity;
• Sentia Fructose;
• Xprecia Prime;
• Xprecia 4U; and
• Petrackr.
UBI also completed the new three electrode manufacturing facility and progressed work on several new biomarkers.
We recorded 47% sales growth year on year and 100% growth in gross margin. UBI recorded 55% sales growth
half year on half year and all products returned sales growth.
In March 2024, we received FDA approval for our next generation Xprecia Prime product 510(k) and CLIA Waiver
and we are excited by the opportunity to sell Xprecia in the USA.
We recently announced a $10m fully underwritten capital raising via an entitlement offer together with the
placement of shares for $2.5m to institutional investors. The funds will be used primarily to support our growth
strategies, including entry into the USA market for Xprecia.
We look forward to reporting on our growth and achievements in 2024 and beyond.
2021
2022
2023
2024
Q1
Q2 Q3 Q4
Q1
Q2
Q3 Q4
Q1
Q2 Q3 Q4
Q1
Q2 Q3 Q4
T
O
D
A
Y
PRODUCT LAUNCH
FIRST SALES
PROJECT
Sentia FSO2
Sentia Malic Acid
Sentia Glucose
Sentia Fructose
Sentia Acetic Acid
Sentia Titratable Acidity
Xprecia Prime HCP
PETRACKR
Xprecia Prime PST
Xprecia Prime USA
Yours faithfully,
Graham McLean
Chairman
John Sharman
CEO
Universal Biosensors, Inc. 1
FORM 10-K
2 Universal Biosensors, Inc.
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For 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 ororganization) (I.R.S. Employer Identification No.) Universal Biosensors, Inc.1 Corporate Avenue,Rowville, 3178, VictoriaAustralia 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 Securities registered pursuant to Section 12(g) of the Act: Shares of Common Stock, par value US$0.0001 per share(Title of each class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 duringthe 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 requirementsfor 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 ofRegulation 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 or a smaller reporting company or anemerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act: Large accelerated filer ☐Accelerated filer ☐ Non-accelerated filer ☒Smaller reporting company ☒ Emerging growth company ☒ 1 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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controlover financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued itsaudit report. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filingreflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received byany of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The approximate aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was A$39,940,224 (equivalent toUS$26,480,368) as of June 30, 2023. There were 212,369,435 shares of the registrant’s common stock, par value US$0.0001 per share, outstanding as of February 20, 2024. Documents incorporated by reference:Certain information contained in the registrant’s definitive Proxy Statement for the 2024 annual meeting of stockholders, to be filed with the SEC not later than120 days after the end of the fiscal year covered by this report, is incorporated by reference into Part III hereof. Information contained on pages F-2 through F-30 of our Annual Report to Stockholders for the fiscal year ended December 31, 2023 (our “2023 Annual Report”)is incorporated by reference in our response to Items 7, 7A, 8 and 9A of Part II. The 2023 Annual Report is filed as Exhibit 13 to this Annual Report on Form 10-K. 2 UNIVERSAL BIOSENSORS, INC. TABLE OF CONTENTS PagePart I Item 1.Business5 Item 1A.Risk Factors10 Item 1B.Unresolved Staff Comments21 Item 1C.Cybersecurity22 Item 2.Properties23 Item 3.Legal Proceedings24 Item 4.Mine Safety Disclosures25 Part II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities26 Item 6.[Reserved]28 Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations29 Item 7A.Quantitative and Qualitative Disclosures About Market Risk30 Item 8.Financial Statements and Supplementary Data31 Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure32 Item 9A.Controls and Procedures33 Item 9B.Other Information36 Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections37 Part III Item 10.Directors, Executive Officers and Corporate Governance38 Item 11.Executive Compensation39 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters40 Item 13.Certain Relationships and Related Transactions, and Director Independence41 Item 14.Principal Accountant Fees and Services42 Part IV Item 15.Exhibits and Financial Statement Schedules43 Item 16.Form 10-K Summary45 Signatures46 Unless otherwise noted, references in this Annual Report on Form 10-K (this “Form 10-K”) 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, UniversalBiosensors Pty Ltd (“UBS”), its wholly owned US operating subsidiary, Universal Biosensors LLC (“UBS LLC”) and UBS’ wholly owned Canadian operatingsubsidiary, Hemostasis Reference Laboratory Inc. (“HRL”) and wholly owned Dutch operating subsidiary, Universal Biosensors B.V. (“UBS BV”). Unlessotherwise noted, all references in this Form 10-K 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. 3 Cautionary Note Regarding Forward-Looking Statements This Form 10-K, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaningof Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the“Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in thePrivate Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Such forward-lookingstatements involve known and unknown risks, uncertainties and other factors that may cause our, our customers and partners’ or our industry’s actual results,levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. All statements, other thanstatements of historical facts, are forward-looking statements. Forward-looking statements include, but are not limited to, statements about: ●the impact of global economic and political developments on our business, including economic slowdowns or recessions that may result from war orother military conflict and inflationary factors such as increases in the cost of various inputs in our supply chain, each of which could harm ourcommercialization efforts for our products as well as the value of our common stock and our ability to access capital markets, if required; ●natural and manmade disasters, including pandemics such as COVID-19, and other force majeures, which could impact our operations, and those ofour partners and other participants which operates within our industry; ●our business and product development strategies; ●our expectations with respect to collaborative, strategic or distribution arrangements; ●our expectations with respect to the timing and amounts of revenues from our customers and partners; ●our expectations with respect to the services we provide to, and the development projects we undertake for, our customers and partners; ●our expectations with respect to regulatory submissions, clearances, market launches of products we develop or are involved in developing; ●our expectations with respect to sales of products we develop or are involved in developing and the quantities of such products to be manufactured byus; ●our expectations with respect to our research and development programs, the timing of product development and our associated research anddevelopment expenses; ●the ability to protect our owned or licensed intellectual property; and ●our estimates regarding our capital requirements, the sufficiency of our cash resources, our debt repayment obligations and our need for additionalfinancing. The statements in this Form 10-K 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-lookingstatements contain such identifying words. You should not place undue reliance on these forward-looking statements, which apply only as of the date of thisForm 10-K. The forward-looking statements included in this Form 10-K do not guarantee our future performance, and actual results could differ from thosecontemplated by these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in theforward-looking statements that we make. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after thedate on which the statement is made or to reflect the occurrence of unanticipated events. Factors that could cause or contribute to such differences include,but are not limited to, those discussed in cautionary statements throughout this Form 10-K, particularly those set forth in section “Item 1A - Risk Factors.”However, new factors emerge from time to time and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact ofeach factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained inany forward-looking statements. Except to the extent required by applicable law or regulation, we do not undertake to update or revise any forward-lookingstatements. 4 PART I Item 1. Business. The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this Form 10-K. Thisdiscussion and analysis contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results and thetiming of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth inthe section entitled “Item 1A - Risk Factors” and elsewhere in this Form 10-K. Business Overview We specialize in the design and development of electrochemical cells (strips) used in conjunction with point-of-use devices that are used in various industriessuch as healthcare (point-of-care), wine, food and agriculture. Our ambition is to build a multi-product stable of biosensors in large markets which generatesongoing revenue streams. UBI was incorporated as a Delaware corporation on September 14, 2001. Key developments during 2023 include: ●Revenue from the sale of products increased 67% to $5.64m ●Total revenue increased 47% to A$6.63 million ●Gross profit increased 100% to A$4.28 million ●Operating costs decreased as follows: oR&D expenses declined by 60% to A$4.97 million oTotal operating expenses declined by 43% to A$20.97 million ●Net loss after tax and impairment of intangible assets improved by A$20.11 million ●Completion of Xprecia Prime clinical trials and submission of 510K application to the US (“FDA”) ●Global launch of Sentia's Fructose, Acetic Acid and Titratable Acidity tests ●Global launch of the Petrackr blood glucose product ●First sales of next generation Xprecia Prime in Europe ●Major tender win to supply Xprecia Prime in Italy ●Received regulatory approval and first order for Xprecia Prime in India and Malaysia ●Received regulatory approval for the sale of Xprecia Prime 4U directly to patients for self-testing in Europe ●The continuing development of our Oncology platform ● Description of our business Industry background We operate in the high growth, point-of-care segment of the global in vitro diagnostics (IVD) industry, oenology (wine industry), veterinary blood glucosemonitoring and other industries where point-of-use devices are or can be used. A large proportion of testing in the IVD industry, has historically been performedeither by using expensive equipment or by trained personnel at dedicated or centralized testing sites including hospital laboratories and commerciallaboratories. Similarly, a large proportion of testing in the wine industry, has historically been performed either by using expensive equipment or by trainedpersonnel at dedicated or centralized testing sites including commercial laboratories. Significant interest has developed in techniques and technologies thatallow testing to be performed “on-the-spot” in real time. While not all tests are suited to being performed at the point-of-use, we believe our electrochemical celltechnology and other technologies could be a suitable platform for adapting a number of tests to a point-of-use format as it offers speed, ease of use,reliability, accuracy at a low cost in alternative industries. Point-of-use tests in development and partnering strategy We continue to demonstrate the broader application of our technology platform for markets with significant commercial potential and have developed productsin blood glucose, a coagulation Prothrombin Time International Normalized Ratio (“PT-INR”) test and chemical tests for the wine industry. We continue to invest an appropriate amount of resources into the development of new products and technologies across various industries includingoncology, fertility, aptamers, per-and polyfluoroalkyl substances (“PFAS”), Sentia alcohol and heavy metals. 5 We use various channels to sell our products and they include direct sales and the engagement of distributors and agents. Principal products and services We are the manufacturer and distributor of PT-INR coagulation test strips and devices (Xprecia Stride and Xprecia Prime), used to monitor the effect of theanticoagulant therapy warfarin. Xprecia Stride and Xprecia Prime are medical devices. We are the manufacturer and distributor of all the Sentia wine testing products which includes Free SO₂, Malic Acid, Glucose, Fructose, Total Acid andTitratable Acidity. Sentia is a non-medical device. We are the manufacturer and distributor of the Petrackr which is a blood glucose test used in cats and dogs. HRL provides non-diagnostic laboratory services and performs coagulation testing services. UBS continues to conduct research and development to demonstrate the broader application of its technology platform. Facilities UBS leases approximately 5,000 square meters of office, research and development and manufacturing facilities at 1 Corporate Avenue, Rowville in Melbourne,Australia. UBS has had ISO 13485 certification continuously at that site since May 2007. The lease for 1 Corporate Avenue expires on December 31, 2025 withan option to renew the lease for two further terms of five years each. On June 28, 2021, HRL entered a premises lease to occupy approximately 418 square meters of office and laboratory facilities at 44 Frid Street, Hamilton,Ontario, Canada. The lease commenced in February 2022, with a ten-year contractual period. HRL relocated to the new premises in February 2022. The leasedoes not include an option to renew the lease for a further term. HRL holds an ISO 13485:2016 certification. Raw materials Raw materials essential to our business are purchased worldwide in the ordinary course of business from numerous suppliers. In general, these materials areavailable from multiple sources. Certain of our products in development may be more reliant on sole sources of supply. The use of sole sourced materials maybe due to sourcing of proprietary and/or patented technology and processes that are intended to provide a unique market differentiation to our product. UBIcontinuously assesses its sole sourced raw materials and maintains business continuity plans with its suppliers. UBI’s continuity plans may include securingsecondary supply with alternate suppliers, qualification of alternate manufacturing facilities, maintaining contingency stock and securing a long lead time forthe supply of raw materials once notice of termination is given by the supplier. While UBI works closely with its suppliers, there may nonetheless be events thatcause supply interruption, reduction or termination that adversely impacts UBI’s ability to manufacture and sell certain products. Distribution Order back log is not material to our business in as much as orders for our products generally are received and filled on a current basis. Our worldwide revenuefor Xprecia Stride, Xprecia Prime, Petrackr and for the provision of non-diagnostic laboratory and coagulation testing services are not generally seasonal. Ourworldwide revenue for certain of our Sentia products is seasonal based on the respective grape harvest seasons in each territory. Regulatory clearances UBI’s medical device products and operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”) and various other federal and stateagencies, as well as by foreign governmental agencies. These agencies enforce laws and regulations that govern the development, testing, manufacturing,labelling, advertising, marketing and distribution, and market surveillance of UBI’s medical devices products. These products are also developed, manufacturedand sold under an international quality system standard known as ISO 13485. UBI’s Petrackr (animal device) and Sentia (non-medical) products are subject to regulation by product safety regulations by government agencies in multiplejurisdictions. These agencies enforce laws and regulations that govern the safety aspects for development, testing, manufacturing, labelling, advertising,marketing and distribution, and market surveillance of UBI’s products. These products are also developed, manufactured and sold under an international qualitysystem standard known as ISO 9001. 6 UBI actively maintains FDA/ISO Quality Systems that establish standards for its product design, manufacturing, and distribution processes. Prior to marketingor selling most of its medical products, UBI must secure approval from the FDA and counterpart non-U.S. regulatory agencies. Following the introduction of aproduct, these agencies may engage in periodic reviews of UBI’s quality systems, as well as product performance and advertising and promotional materials.These regulatory controls, as well as any changes in FDA policies, can affect the time and cost associated with the development, introduction and continuedavailability of new products. Where possible, UBI anticipates these factors in its product development and planning processes. These agencies possess theauthority to take various administrative and legal actions against UBI, such as product recalls, product seizures and other civil and criminal sanctions. UBI also is subject to various federal and state laws, and laws outside the United States, concerning healthcare fraud and abuse (including false claims lawsand anti-kickback laws), global anti-corruption, transportation, safety and health, and customs and exports. Many of the agencies enforcing these laws haveincreased their enforcement activities with respect to medical device manufacturers in recent years. UBI believes it is in compliance in all material respects with applicable law and the regulations promulgated by the applicable agencies (including, withoutlimitation, environmental laws and regulations), and that such compliance has not had, and will not have, a material adverse effect on our operations or results. The importance and duration of all our patents, trademarks and licenses We rely on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish and protect our proprietaryrights which in the aggregate we believe to be of material importance to us in the operation of our business. Our continued success depends to a large extenton our ability to protect and maintain our owned and licensed patents and patent applications, copyright, trademark and trade secrets. Our point-of-use tests in development draw upon an extensive portfolio of patents and patent applications as well as know-how either owned by UBS orlicensed to UBS. We patent the technology, inventions and improvements that we consider important to the development of our business. We rely on the owned patent applications and the patents and patent applications licensed to us in the manufacture of the point-of-use tests being developedby us and to enable us to grant rights to our customers and partners to commercialize products that we may develop. Our owned and licensed patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countrieswhere patent protection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends upon the type of patent, thescope of its coverage and the availability of legal remedies in the country. We maintain the owned and licensed patents and patent applications that weconsider most significant by virtue of their importance to our platform. We intend to continue to file and prosecute patent applications when and where appropriate to attempt to protect our rights in our proprietary technologies. Our ability to build and maintain our proprietary position for our technology and products will depend on our success in obtaining effective claims and thoseclaims being enforced once granted and, with respect to intellectual property licensed to us, the licensee’s success in obtaining effective claims and thoseclaims being enforced once granted. The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions forwhich important legal principles remain unresolved. Some countries in which we or our customers or partners may seek approval to sell point of use tests thatwe have been involved in developing, may fail to protect our owned and licensed intellectual property rights to the same extent as the protection that may beafforded in the United States or Australia. Some legal principles remain unresolved and there has not been a consistent policy regarding the breadth orinterpretation of claims allowed in patents in the United States, the United Kingdom, the European Union, Australia or elsewhere. In addition, the specificcontent of patents and patent applications that are necessary to support and interpret patent claims is highly uncertain due to the complex nature of therelevant legal, scientific and factual issues. Changes in either patent laws or in interpretations of patent laws in the United States, the United Kingdom, theEuropean Union, Australia or elsewhere may diminish the value of our intellectual property or narrow the scope of our patent protection. Trademarks We own the “SENTIA” trademark which we use to market our wine testing products and the “PETRACKR” trademark which we use to market our blood glucosetest to detect and monitor diabetes in non-humans. 7 The practices of the registrant and the industry (respective industries) relating to working capital items The nature of the Company's business requires it to maintain sufficient levels of inventory to meet contractually agreed delivery requirements of its customers.Significant amounts of inventory are not retained by the Company as it does not have to meet rapid delivery requirements. The Company provides its customerswith payment terms prevalent in the industry. The Company generally does not provide extended payment terms to its customers. Dependence on single customer Our total income as disclosed below is attributed to countries based on location of customer. Location has been determined generally based on contractualarrangements. Total income includes revenue from products and services, interest income, research and development tax incentive income and other incomeas disclosed in the Consolidated Statements of Comprehensive Income/(Loss). Year Ended December 31, 2023 2022 A$ A$ Australia (home country) 4,823,076 4,978,712 Americas 1,913,892 1,387,556 Europe 2,295,455 2,841,678 Other 2,006,822 150,082 Total income 11,039,245 9,358,028 % of total revenue from products and services derived from major customers (revenue generated by customers having sales of more than 10% has beendisclosed separately in the table below): Year Ended December 31, 2023 2022 Siemens 0% 13%Other 100% 87% Siemens rights to sell Xprecia products pursuant to the Commercial and Distribution agreement ended formally on March 31, 2023. We are not dependent on asingle customer now. We did not have any significant backlog orders as of December 31, 2023 and 2022. Competitive conditions of our business UBI operates in the increasingly challenging medical devices and non-medical devices technology marketplace. Technological advances and scientificdiscoveries have accelerated the pace of change in technology. The regulatory environment of medical devices products is becoming more complex andvigorous, and economic conditions have resulted in a challenging market. Companies of varying sizes compete in the global technology field. Some are morespecialized than UBI with respect to particular markets, and some have greater financial resources than UBI. New companies have entered the field andestablished companies have diversified their business activities into the technology area. Acquisitions and collaborations by and among companies seeking acompetitive advantage also affect the competitive environment. UBI competes in this evolving marketplace on the basis of many factors, including price, quality, innovation, service, reputation, distribution and promotion. Inorder to remain competitive in the industries in which UBI operates, it continues to make investments in research and development, quality management,quality improvement, product innovation and productivity improvement. Human capital management Through our long operating history and experience with technological innovation, we appreciate the importance of retention, growth and development of ouremployees. The Company has a talented, motivated, and dedicated team, and is committed to supporting the development of all of its team members and tocontinuously building on its strong culture. As of February 20, 2024, the Company had approximately 80 employees located in Australia, Canada, the UnitedStates and Europe. Females represent 45% of our workforce, including 25% of senior management. 98% of our workforce are permanently employed to ensurethroughput of growth and development. None of our employees are subject to a collective bargaining agreement. 8 The Company believes that success of its mission is realized by the engagement and empowerment of its employees. The CEO and Head of People Strategy &Culture regularly update the Company’s Board of Directors (“the Board of Directors”) and its committees on the status of the human capital trends andactivities within the business. Our management and cross-functional teams work closely to evaluate human capital management issues such as staffretention, workplace safety, harassment and bullying, as well as to implement measures to mitigate these risks. Workplace Practices and PoliciesThe Company is committed to providing a workplace free of harassment or discrimination based on race, color, religion, sex, sexual orientation, gender identity,national origin, disability, veteran status, caste or other legally protected characteristic. The Company is an equal opportunity employer committed to inclusionand diversity. Compensation and BenefitsThe Company recognizes its people are most likely to thrive when they have the resources to meet their needs and the time and support to succeed in theirprofessional and personal lives. In support of this, we believe the Company offers compensation in each of our locations around the globe that is competitive(including salary, incentive bonus and equity), equitable and enables employees to share in the Company’s success. Further to monetary rewards, the Companyprovides a family-friendly environment where staff can organize hybrid work arrangements where required. Growth and DevelopmentThe Company invests in tools and resources that support employees’ individual growth and development. The Company offers professional developmentopportunities including leadership training and have development programs and on-demand opportunities to cultivate talent throughout the Company. Trainingneeds are identified at the start of each year when corporate and departmental objectives are communicated. Strategic talent reviews and succession planningdiscussions takes place annually, as an extension to annual performance reviews, across all business areas. The CEO and Head of People Strategy & Culturemeet with senior management and the Board of Directors to review top enterprise talent. The Company continues to provide opportunities for employees togrow their careers with over half of the open management positions filled internally during 2023. Inclusion and DiversityThe Company is committed to hiring inclusively, providing training and development opportunities, fostering an inclusive culture, and ensuring equitable pay foremployees, and is continuing to focus on increasing diverse representation at every level of the Company. EngagementThe Company believes that open and honest communication among team members; managers and leadership foster an open, collaborative work environmentwhere everyone can participate, develop and thrive. Team members are encouraged to come to their managers with questions, feedback or concerns, and theCompany regularly conducts surveys that gauge employee sentiment in areas like career development and overall workplace satisfaction. Excluding seniormanagement, staff to manager ratio is 16.2 – this enables effective and efficient management that supports optimum employee engagement. Health and SafetyThe Company is committed to protecting its employees everywhere it operates. The Company identifies potential risks associated with workplace activities inorder to develop measures to mitigate possible hazards. The Company supports employees with general safety training and puts specific programs in place forthose working in potentially high-hazard environments, including chemical management, equipment and machinery safety, hazardous materials managementand electrical safety. The Company’s Safety Committee generally meet monthly to review any incidents, implement additional or update existing safetyprocedures across the whole operation. During the year ended December 31, 2023, zero safety incidents were achieved. Separately, the Company views mentalhealth as a fundamental part of our humanity and implemented a comprehensive Employee Assistance Program in 2021. The program offers a wide-rangingsuite of online resources, including mental health coaching and training to help managers recognize and respond to signs of mental health issues. Available Information We are required to file a Form 10-K as a result of UBI being registered under the Exchange Act. We file annual and quarterly reports, proxy statements and other information with the United States Securities and Exchange Commission (the “SEC”), copiesof which are available on ASX. Our public filings (including our Annual Report on Form 10-K and proxy statement) are also available at the website maintainedby us at http://universalbiosensors.com and the SEC at http://www.sec.gov. We provide without charge to each person solicited by the Proxy Statement a copy of our Annual Report on Form 10-K, including our financial statements butexcluding the exhibits to Form 10-K other than Exhibit 13. The Annual Report includes a list of the exhibits that were filed with the Form 10-K, and we will furnisha copy of any such exhibit to any person who requests it upon the payment of our reasonable expenses in providing the requested exhibit. For furtherinformation, please contact our Company Secretary at companysecretary@universalbiosensors.com or 1 Corporate Avenue, Rowville VIC 3178 Australia. Our Corporate Governance Statement issued in accordance with ASX Listing Rule 4.10.3 reporting compliance against the ASX Corporate GovernancePrinciples and Recommendations is available at https://www.universalbiosensors.com/investor-centre/corporate-governance. 9 Item 1A. Risk Factors. Investing in our shares or CDIs involves a high degree of risk. Before you invest in our shares or CDIs, you should understand the high degree of risk involved. Youshould carefully consider the following risks and other information in this Form 10-K, including our financial statements and related notes appearing elsewherein this Form 10-K, before you decide to invest in our shares or CDIs. If any of the events described below actually occurs, our business, financial condition andoperating results could be harmed. In such an event, the market price of our CDIs would likely decline and you could lose part or all of your investment. Key Business Risks We may face challenges in marketing and selling our products, and training new customers on the use of our products which could impact our revenues. Our financial condition and operating results are and will continue to be highly dependent on our ability to adequately promote, market and sell our products, andour ability to train new customers on the use of our products. If our sales and marketing representatives fail to achieve their objectives, our sales coulddecrease or may not increase at levels that are in line with our forecasts. We believe a majority of our sales will be to independent distributors for the foreseeable future who may also sell the products of our competitors. If we areunable to maintain or expand our network of independent distributors, our revenues may be negatively impacted. If any of our key independent distributors were to cease to distribute our products or reduce their promotion of our products as compared to the products of ourcompetitors, our sales could be adversely affected. In that case, we may need to seek alternative independent distributors or increase our reliance on our otherindependent distributors, or we may engage direct sales representatives, which may not prevent our revenues from being adversely affected. Additionally, tothe extent we enter into additional arrangements with independent distributors to perform sales, marketing or distribution services, the terms of thearrangements could result in our product margins being lower than if we directly marketed and sold our products. Our products may not be successful in the marketplace. Our success and the success of the products that we develop, manufacture and distribute is ultimately dependent on the level of continued marketacceptance and sales of such products. Continued market acceptance will depend on, amongst other things, the ability to provide and maintain evidence ofsafety, efficacy and cost effectiveness of our products, the advantages and profile over competing products, the level of support from the industry experts, therelative convenience and ease of use, cost-effectiveness compared to other products, the availability of reimbursement from national health authorities, thetiming of regulatory clearances and market introduction and the success of marketing and sales efforts by our customers and partners. Additionally, it isdifficult to determine the market opportunity for new technologies and our estimates may not accurately reflect the actual demand in the target markets or newcompetitive product introductions may disrupt current market conditions and decrease our commercial opportunities and impact on our revenue. Our commercial opportunities will be reduced or eliminated if the size of the market opportunity is less than we expect or if our competitors develop andcommercialize products that are safer, more effective, more convenient, less expensive, or reach markets sooner or are marketed better than the products thatwe develop, manufacture and distribute or are currently being marketed by our partners. We cannot be sure that any other products that we develop, manufacture and distribute will be successful in the marketplace or will secure and maintainadequate market share. Our ability to be or maintain profitability in the future will be adversely affected if any of the products that we develop, manufacture and distribute fail to achieveor maintain market acceptance or compete effectively in the market place. It may render prior development efforts unproductive and worthless and wouldreduce or eliminate our revenues from product sales and/or manufacturing and may have a material adverse effect on our business and financial position. We may enter into collaborations, licensing arrangements, strategic alliances or partnerships with third parties that may not result in the development ofcommercially viable products or the generation of significant future revenues or our business would be severely harmed if our key contracts are terminated,or if counterparties to our key contracts do not meet their performance obligations under those contracts. In the ordinary course of our business, we may enter into collaborations, licensing arrangements, strategic alliances or partnerships to develop proposedproducts or technologies, pursue new markets, or protect our intellectual property assets. We may also elect to amend or modify similar agreements that wealready have in place. Proposing, negotiating and implementing collaborations, licensing arrangements, strategic alliances or partnerships may be a lengthyand complex process, and may subject us to business risks. For example, other companies, including those with substantially greater financial, marketing,sales, technology or other business resources, may compete with us for these opportunities, or may be the counterparty in any such arrangements. We maynot be able to identify or complete any such collaboration in a timely manner, on a cost-effective basis, on acceptable terms or at all. In addition, we may notrealize the anticipated benefits of any such collaborations that we do identify and complete. In particular, these collaborations may not result in thedevelopment of products or technologies that achieve commercial success or result in positive financial results, or may otherwise fail to have the intendedimpact on our business. 10 Additionally, we may not be in a position to exercise sole decision-making authority regarding a collaboration, licensing or other similar arrangement, whichcould create the potential risk of creating impasses on decisions. Further, our collaborators and business partners may have economic or business interests orgoals that are, or that may become, inconsistent with our business interests or goals. It is possible that conflicts may arise with our collaborators and otherbusiness partners, such as conflicts concerning the achievement of performance milestones, or the interpretation of significant terms under any agreement,such as those related to financial obligations, termination rights or the ownership or control of intellectual property developed during the collaboration. If anyconflicts arise with our current or future collaborators, they may act in their self-interest, which may be adverse to our best interest, and they may breach theirobligations to us. In addition, we have limited control over the amount and timing of resources that our current collaborators or any future collaborators devoteto our arrangement with them or our future products. Disputes between us and our current, future or potential collaborators may result in litigation or arbitrationwhich would increase our expenses and divert the attention of our management. Further, these transactions and arrangements are contractual in nature andmay be terminated or dissolved under the terms of the applicable agreements and, in such event, we may not continue to have rights to the products relating tosuch transaction or arrangement or may need to purchase such rights at a premium. For example, we entered into a license agreement with LifeScan Global Corporation, which provide us exclusive license to develop a test strip and meter to beused for the detection and monitoring of diabetes in non-humans. Under certain circumstances, the agreement may be terminated by LifeScan GlobalCorporation including if we don’t launch the product within a specified period of time, if the product is not launched in certain key territories within a specifiedperiod of time and if rolling twelve months sales falls below a certain level after a specified period of time. The termination of our existing license agreementwith LifeScan Global Corporation would disrupt our ability to commercialize the product which could have a material adverse impact on our financial conditionand results of operations, negatively impact our ability to compete and cause our stock price to decline. Furthermore, the License Agreement with LifeScan imposes material obligations on us. LifeScan may terminate the License Agreement if we fail to usecommercially reasonable efforts to commercialise and fail to provide evidence of our compliance within 90 days of written notice, are liquidated or wound up,or are in persistent and material breach of our obligations and fail to remedy the breach within 90 days of written notice requiring us to do so. If we were tobreach the License Agreement and LifeScan were to validly terminate the agreement in response, it would severely and adversely affect our financial results,business and business prospects and the future of our research and development activities. Amongst other things, it would seriously restrict or eliminate ourability to develop and commercialize our own tests and our ability to grant further sublicenses, which would restrict or eliminate our commercializationopportunities. If the License Agreement was terminated, any sublicense under the License Agreement previously granted by us to a third party that is in effectimmediately prior to such termination would survive termination as a direct license from LifeScan to such sublicensee, provided certain conditions are met,including that the sublicensee is not in material breach of any provision of the License Agreement and agrees to be bound to the terms of the LicenseAgreement with respect to the applicable sublicense field. Deviations from expected results of operations and/or expected cash requirements could adversely affect our financial condition and results of operations. Our principal current sources of liquidity are the earnings generated from our products and services, along with cash flows from operations and existing cashand cash equivalents. These are sufficient to fund our operating needs and capital requirements for at least the next twelve months, based on currentassumptions regarding the amount and timing of such expenditures and anticipated cash flows. Any significant deviation in actual results from our expectedresults of operations, any significant deviation in the amounts or timing of material expenditures from current estimates, or other significant unanticipatedexpenses could have a material adverse effect on our financial condition and/or may result in the need for debt or equity financing. Reduced margins would have a material adverse effect on our business and financial position. Our revenues may decline and/or our costs may increase, either of which could result in reduced margins, which would have a material adverse effect on ourbusiness and financial position. The primary factors that pose this risk include selling prices, increased manufacturing costs and currency fluctuations. Increases in our costs to manufacturing products or conducting development work may decrease our margins or cause us to suffer a loss on themanufactured products. Additionally, we may suffer decreased margins due to the global reach of our business exposing us to market risk from changes inforeign currency exchange rates. The majority of our cash receipts are in US dollars and Euros and expenses are in Australian dollars and US dollars, and weare exposed to foreign exchange exposure particularly when we have to convert our US dollar and Euro cash receipts into Australian dollars to fund ouroperations. 11 The success of our business is heavily dependent upon market factors such as growth of the point-of-use testing market and our ability to competeeffectively within the highly competitive market. Our business success relies on the growth of both the existing and emerging point-of-use testing market. We cannot be sure that this market will grow as weanticipate. Such growth will require continued support and demand from users, payers, patients and healthcare professionals and the endorsement byprofessional bodies that influence point-of-use tests. Research and clinical data may not sufficiently support point-of-use testing, nor may the economicbenefits sufficiently support point-of-use testing as an alternative to current practice. Even if the data is compelling, significant resources may be required toeducate users and change in practice may be slower and more costly than we anticipate. If point-of-use testing fails to be adopted at the rate we expect, thesector may remain unattractive to the size of partner we seek to attract and as a consequence, we may need to change our business model. This may requireus to incur more cost and/or our anticipated growth will be adversely affected and our results will suffer. We may face intense competition in development, marketing and selling point-of-use tests. The market for in vitro diagnostics and point-of-use testing in food and drink and agriculture is intensely competitive, price sensitive and subject to rapidchange. We and our customers and partners may be unable to accurately anticipate changes in the markets and the direction of technological innovation andthe demands of end users, competitors may develop improved technologies and the marketplace may conclude that our products are obsolete. Our largercompetitors enjoy several competitive advantages including significantly greater financial resources, greater brand recognition, greater expertise in conductingclinical trials, obtaining regulatory clearances and managing manufacturing operations, and greater experience in product sales and marketing. Early-stagecompanies may also prove to be significant competitors. Competition will be faced from existing products as well as products in development. Point-of-use tests are likely to experience significant and continuingcompetition from traditional pathology laboratory-based testing as well as other point-of-use tests. Our and our customers’ and partners’ commercialopportunity will be reduced or eliminated if competitors develop and commercialize safer, more effective, more convenient, or cheaper products, or reach themarket sooner than we do. Any such developments adversely affecting the market for products developed by us may force us and our partners to reduceproduction or discontinue manufacturing which would cause our operating results to suffer. There can be no assurances given with respect to our or anypartner’s ability to compete effectively in the competitive markets in which we operate. The loss of a key employee or the inability to recruit and retain high caliber staff to manage future anticipated growth could have a material adverse effect onour business. As with most growth companies, our future success is substantially dependent on our key personnel. Certain key personnel would be difficult to replace, andthe loss of any such key personnel may adversely impact the achievement of our objectives. Our ability to operate successfully and manage the businessdepends significantly on attracting and retaining additional highly qualified personnel. The loss of any key personnel may be disruptive or have a materialadverse effect on the future of our business. Effective succession planning is important for our long-term success and failure to ensure effective transfers ofknowledge and smooth transitions involving key employees could hinder our strategic planning and execution. The competition for qualified employees inscientific research and medical diagnostic and laboratory industries is particularly intense and there are a limited number of persons with the necessary skillsand experience. Operational Risks New product design and development and clinical/validation testing is costly, labor intensive and the outcomes uncertain. The design and development of different tests on our platform takes a number of years to complete, is costly and the outcomes are uncertain. Althoughdevelopment risk generally reduces the further a test is developed, the tests we develop have a significant degree of technical risk, and irrespective of thestage of development, design and development work and product validation, the development of the test may be unsuccessful or not warrant productcommercialization. If development activities are unsuccessful, we may need to delay, reduce the scope of or eliminate some or all of our developmentprograms and significant monies and management time invested may be rendered unproductive and worthless. Diagnostic devices must be tested for safety and performance in laboratory and clinical trials before regulatory clearance for marketing is achieved. Suchstudies are costly, time consuming and unpredictable. Clinical trials may not be successful and marketing authorization may not be granted which may result inus not being profitable, or trigger dissolution of partnerships or collaborative relationships. The outcome of early clinical trials may not be predictive of thesuccess of later clinical trials. Failed clinical trials may result in considerable investments of time and money being rendered unproductive and worthless. 12 Additionally, unanticipated clinical trial costs or delays could cause substantial additional expenditure and we may have to delay or modify our planssignificantly. This may harm our business, time to market, financial condition and results of operations. We are dependent on our suppliers. Similar to most major manufacturers in our industry, we are dependent upon our suppliers for certain raw materials and components. We have preferredsuppliers, making us vulnerable to supply disruption, which could harm our business and delay manufacturing operations. We seek to enter into long termcontractual arrangements with certain of our suppliers, however we may not always be able to do so on acceptable terms. If our manufacturing requirementschange, such long-term contractual arrangements may cause us to have excess or obsolete inventory. We may not be able to guarantee the supply of certainof our materials which may in turn affect our ability to supply product to our customers. We may have difficulty locating alternative suppliers in a timely manneror on commercially acceptable terms, and switching components may require product redesign and further regulatory clearance which could significantly delayproduction. Likewise, our customers and partners are subject to supply risks which may delay their ability to supply customers with product which wouldimpact our revenue and have a consequential adverse effect on our business and results of operations. Supply disruption may also impact on our research anddevelopment programs. Further, if our contract manufacturers fail to achieve and maintain required production yields or manufacturing standards, it could result in product withdrawals,delays, recalls, product liability claims and other problems that could seriously harm our business. Any meter shortages or sub-components thereof ormanufacturing delays could result in delays or reduction in our revenues, with consequential adverse effect on our business and results of operations. We face risks manufacturing product or providing services. Our business strategy depends on our ability to manufacture our current and proposed products in sufficient quantities and on a timely basis so as to meetconsumer demand, while adhering to product quality standards, complying with regulatory requirements and managing manufacturing costs. We are subject tonumerous risks related to our manufacturing capabilities, including: ●quality or reliability defects in product components that we source from third-party suppliers; ●our inability to secure product components in a timely manner, in sufficient quantities and on commercially reasonable terms; ●difficulty identifying and qualifying alternative suppliers for components in a timely manner; ●implementing and maintaining acceptable quality systems while experiencing rapid growth; ●our failure to increase production of products to meet demand; ●our inability to modify production lines and expand manufacturing facilities to enable us to efficiently produce future products or implement changes incurrent products in response to consumer demand or regulatory requirements; ●our inability to manufacture multiple products simultaneously while utilizing common manufacturing equipment; and ●potential damage to or destruction of our manufacturing equipment or manufacturing facilities. As demand for our products increases, and as the number of our commercial products expands, we will have to invest additional resources to purchasecomponents, hire and train employees, and enhance our manufacturing processes and quality systems. We may also increase our utilization of third parties toperform contracted manufacturing services for us, and we may need to acquire additional custom designed equipment to support the expansion of ourmanufacturing capacity. In addition, although we expect some of our products under development to share product features and components with our currentproducts, manufacturing of these products may require modification of our production lines, hiring of specialized employees, identification of new suppliers forspecific components, qualifying and implementing additional equipment and procedures, obtaining new regulatory approvals, or developing new manufacturingtechnologies. Ultimately, it may not be possible for us to manufacture these products at a cost or in quantities sufficient to make these products commerciallyviable. If we fail to increase our production capacity to meet consumer demand while also maintaining product quality standards, obtaining and maintaining regulatoryapprovals, and efficiently managing costs, our revenues and operating margins could be negatively impacted, which would have an adverse impact on ourfinancial condition and operating results. There are technical challenges to establishing and maintaining commercial manufacturing for products, including maintaining the consistency of our incomingraw materials, equipment design and automation, material procurement, production yields and quality control and assurance. We may fail to achieve andmaintain required production yields or manufacturing standards which could result in financial loss, patient injury or death, product recalls or withdrawals,product shortages, delays or failures in product testing or delivery, breach of our agreements with any partner and other problems that could seriously harm ourbusiness. 13 Our operations may not be profitable, particularly in the near term. We have largely funded our operations and capital expenditures from capital raising, our existing cash reserves and the sale of our products and provision ofservices and government grants and rebates including the research and development tax incentive income. The revenue from the sale of our products andprovision of services has funded a relatively small portion of our operating expenses. For the 2024 financial year, we expect to generate revenues from the saleof our Xprecia Stride and Xprecia Prime products, Sentia and Petrackr products and through the provision of services undertaken by HRL. If our revenues arenot significant, we will continue to incur operating losses on an annual basis. To implement our business strategy and achieve consistent profitability, we need to, among other things, increase sales of our products and the gross profitassociated with those sales, maintain an appropriate customer service and support infrastructure, fund ongoing research and development activities, createadditional efficiencies in our manufacturing processes while adding to our capacity, and obtain regulatory clearance or approval to commercialize our productscurrently under development. We expect our expenses will continue to increase as we pursue these objectives and make investments in our business.Additional increases in our expenses without commensurate increases in sales could significantly increase our operating losses. The extent of our future operating losses and the timing of our profitability are highly uncertain in light of a number of factors, including the timing of the launchof new products and product features by us and our competitors, market acceptance of our products and competitive products and the timing of regulatoryapproval of our products and the products of our competitors. Any additional operating losses will have an adverse effect on our stockholders’ equity, and wecannot assure you that we will be able to sustain profitability. We may also require additional capital to fund our business operations, which may not be available on acceptable commercial terms, or at all. Our primary development, testing and manufacturing operations are conducted at a single location. Any disruption at our facility could adversely affect ouroperations and increase our expenses. Our primary operations are conducted at our Corporate Avenue facility in Melbourne, Australia. HRL also provides us with calibration services from its facilitiesin Hamilton, Canada. We take precautions to safeguard our facilities, including security, health and safety protocols and maintain applicable insurance.However, we may be impacted by cybersecurity risks, industrial action or operating equipment and facilities may not operate as intended or be unavailable as aresult of unanticipated failures or other events outside of our control such as a natural disaster, fire, flood or earthquake or catastrophic breakdowns ordeliberate acts of destruction. The occurrence of any of these events may restrict our ability to supply product or our ability to provide coagulation testing andcalibration services, could cause substantial delays in our operations, damage or destroy our manufacturing and laboratory equipment or inventory, and causeus to incur additional expenses. The insurance we maintain against fires, floods, earthquakes and other natural disasters may not be adequate to cover ourlosses in any particular case. Our success is reliant on the accuracy, reliability and proper use of sophisticated information processing systems and management information technologyand the interruption in these systems could have a material adverse effect on our business, financial condition and results of operations. Our success is reliant on the accuracy, reliability and proper use of sophisticated information processing systems and management information technology.Our information technology systems are designed and selected in order to facilitate the entering of order entry, customer billing, to maintain customer records,to provide product traceability, to accurately track purchases, to manage accounting, finance, administration and manufacturing, generate reports and providecustomer service and technical support. Any interruption in these systems could have a material adverse effect on our business, financial condition and resultsof operations. The failure of our information systems to function as intended or their penetration by outside parties with the intent to corrupt them or our failure to complywith privacy laws and regulations could result in business disruption, litigation and regulatory action, and loss of revenue, assets or personal or otherconfidential data. We use information systems to help manage business processes, collect and interpret data and communicate internally and externally with employees,suppliers, consumers, customers and others. Some of these information systems are managed by third-party service providers. We have backup systems andbusiness continuity plans in place, and we take care to protect our systems and data from unauthorized access. Nevertheless, failure of our systems tofunction as intended, or penetration of our systems by outside parties intent on extracting or corrupting information or otherwise disrupting businessprocesses, could place us at a competitive disadvantage, result in a loss of revenue, assets or personal or other sensitive data, litigation and regulatory action,cause damage to our reputation and that of our brands and result in significant remediation and other costs. Failure to protect personal data, respect the rightsof data subjects, and adhere to strict cybersecurity protocols could subject us to substantial fines and other legal challenges under regulations such as the EUGeneral Data Protection Regulation. As we are increasingly relying on digital platforms in our business, the magnitude of these risks is likely to increase. 14 The effects of global climate change or other unexpected events, including global health crises, may disrupt our operations and have a negative impact on ourbusiness. The effects of global climate change, such as extreme weather conditions and natural disasters occurring more frequently or with more intense effects, or theoccurrence of unexpected events including wildfires, hurricanes, earthquakes, floods, tsunamis and other severe hazards or global health crises, such as theoutbreak of Ebola or the global COVID-19 pandemic, or other actual or threatened epidemic, pandemic, outbreak and spread of a communicable disease orvirus, in the countries where we operate or sell products and provide services, could adversely affect our operations and financial performance. Extremeweather, natural disasters, power outages, global health crises or other unexpected events could disrupt our operations by impacting the availability and cost ofmaterials needed for manufacturing, causing physical damage and partial or complete closure of our manufacturing sites or distribution centers, loss ofhuman capital, temporary or long-term disruption in the manufacturing and supply of products and services and disruption in our ability to deliver products andservices to customers. These events and disruptions could also adversely affect our customers’ and suppliers’ financial condition or ability to operate,resulting in reduced customer demand, delays in payments received or supply chain disruptions. Further, these events and disruptions could increaseinsurance and other operating costs, including impacting our decisions regarding construction of new facilities to select areas less prone to climate changerisks and natural disasters, which could result in indirect financial risks passed through the supply chain or other price modifications to our products andservices. Legal and Regulatory Risks If we cannot maintain our intellectual property rights, our ability to make or develop point-of-use tests would be restricted or eliminated, and the value of ourtechnology and diagnostic tests may be adversely affected. Our ability to obtain proprietary rights, maintain trade secret protection and operate without infringing the proprietary rights of third parties is an integral part ofour business. A number of companies, universities and research institutions have or may be granted patents that cover technologies that we need to complete developmentof a particular product. We may choose or be required to seek licenses under third party patents which would be costly, may not be available on commerciallyacceptable terms, or at all. Further, we may be unaware of other third-party patents or proprietary rights that are infringed by our point of use tests. Much of our platform intellectual property rights are licensed to us from LifeScan. If we were to breach the license agreement and LifeScan were to validlyterminate the agreement in response, it would seriously restrict or eliminate our ability to develop and commercialize our existing and future tests which wouldhave a material adverse effect on us as it would restrict r eliminate our existing commercialization opportunities. We also license other intellectual propertyfrom third parties as part of our other development efforts. LifeScan and our other licensors have a considerable degree of control over the manner that the intellectual property licensed to us is maintained and protectedand, as a result, we have reduced control with respect to the maintenance and protection of our licensed patent portfolio. LifeScan is responsible for theprosecution and maintenance of the intellectual property it licenses to us and we are largely dependent on them to defend proceedings or prosecute infringers.The same applies to our other licensors. Our business would be harmed if the licensed patents were infringed or misappropriated. Prosecuting third parties anddefending ourselves against third-party claims would be costly, time-consuming and divert management’s attention from our business, potentially leading todelays in our development or commercialization efforts. Additionally, if third parties made successful claims, we may be liable for substantial damages orlicense fees, be required to stop marketing the infringing product or take other actions that are adverse to our business. Allegedly defective design or the manufacture of allegedly defective products could potentially expose us to substantial costs, write-offs, regulatory actionsand reputational damage. Allegedly defective designs or manufacture of allegedly defective products exposes us to the risk of product liability claims and product recalls. Any suchclaims have the potential to result in substantial costs, write-offs and potential delays in our shipment of product to customers, decreased demand forproducts and services, loss of revenue and cash flow, reputational damage, costs of related litigation, increases in our insurance premiums and increasedscrutiny by regulatory agencies, claims by our customers and may trigger the dissolution of partnerships or collaborative relationships. The occurrence of someof these events may trigger action by government regulatory agencies including for example, warning, recalls and fines or penalties. While we will seek tomitigate our loss by obtaining appropriate insurances and appropriate contractual protections, if we are unable to maintain our insurance at an acceptable costor on acceptable terms with adequate coverage, or negotiate appropriate contractual protections or otherwise protect against potential product liability claims,we will be exposed to significant liabilities. Recalls would harm our business and compromise the performance of our obligations to our customers and wouldhave a material adverse effect on our business and financial results and may result in claims by our customers or partners and may trigger the dissolution ofpartnerships or collaborative relationships. Any claim for damages by our customers or other claim against us could be substantial. 15 There are many elements to manufacturing products that can cause variability beyond acceptable limits. We may be required to discard defective productsafter we have incurred significant material and labor costs, resulting in manufacturing delays and delayed shipment to customers. Further, if our suppliers areunable to provide materials in conformance with specifications, we may be required to discard materials, which may also cause delays in the manufacture andshipment of products. Risks associated with regulatory clearance and changes to regulation. The devices products we are involved in developing are subject to extensive regulation in all major markets. The Company submitted its full response to theFDA’s “Request for Additional Information” in November 2023 for the Xprecia Prime product. Assuming there are no further queries, an FDA decision for theapproval of Xprecia Prime for sale in United States is expected during Q1 2024. The process of obtaining regulatory clearance is costly and time consumingand there can be no assurance that the required regulatory clearances will be obtained. Products cannot be commercially sold without regulatory clearance. Weand our customers and partners may be unable to obtain the necessary clearances to sell or if the clearances are delayed, revoked or subject to unacceptableconditions, the product may not be able to be commercialized which would have a material adverse effect on us. If we were required and able to change suppliers and third party contract manufacturers, applicable regulatory bodies may require new testing and complianceinspections and require that we demonstrate structural and functional comparability between the same products manufactured by different organizations,resulting in additional costs and potential delays in time to market which could be detrimental to our business. Furthermore, regulation is ongoing and manufacturers and marketers of products are subject to continuous review and periodic inspections. Potentially costlyresponses may be required to be given by us and our customers including product modification, or post-marketing clinical trials as a condition of approval tofurther substantiate safety and efficacy or investigate issues of interest. If we or our customers fail to comply with applicable regulatory requirements it mayresult in fines, delays, suspensions of clearances, seizures, recalls of products, operating restrictions or criminal prosecutions and could have a materialadverse effect on our operations. Additionally, changes in existing regulations or the adoption of new regulations could make regulatory compliance by us moredifficult in future and could hamper our ability to produce our products when we require. Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or our user data could result in the loss or misuse ofsuch data, which could harm our business and reputation and diminish our competitive position. Awareness and sensitivity to personal data breaches and cyber security threats is at an all-time high. Our computer systems and those of our contractors andconsultants are vulnerable to damage from unauthorized access, computer viruses, telecommunications and electrical failures, and natural disasters. If suchan event were to occur and cause interruptions in our operations, it could result in a material disruption to our operations. As part of our business model, we collect, retain, and transmit confidential information over public networks. We may be vulnerable to targeted or randompersonal data or security breaches, acts of vandalism, computer malware, misplaced or lost data, programming and/or human errors, or other similar events.Any misappropriation of our internal confidential or personal information gathered, stored or used by us, be it intentional or accidental, could have a materialimpact on the operation of our business, including severely damaging our reputation and our relationships with licensees, employees and investors. We mayincur further significant costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply withcurrent and new international, federal, and state laws governing the unauthorized disclosure of confidential and personal information which are continuouslybeing enacted. We could also experience loss of revenues resulting from unauthorized use of proprietary information including our intellectual property. Wecould also face sizable fines, significant breach containment and notification costs to supervisory authorities and the affected data subjects, and increasedlitigation as a result of cyber security or personal data breaches. The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks by making cyberattacks more difficult todetect, contain or mitigate. We believe we will continue to see, widespread vulnerabilities that could affect our or other third parties’ data or systems. Mitigationand remediation recommendations continue to evolve, and addressing this and other critical vulnerabilities pertaining to widely used systems, platforms andinfrastructure is a priority for us. Internal access management failures could result in the compromise or unauthorized exposure of confidential data. Moreover,hardware, software or applications we use may have inherent vulnerabilities or defects of design, manufacture or operations or could be inadvertently orintentionally implemented or used in a manner that could compromise information security. There can be no assurance that we or our vendors and other thirdparties will not be subject to additional cybersecurity threats and incidents that bypass our or their security measures, impact the integrity, availability or privacyof personal health information or other data subject to privacy laws or disrupt our or their information systems, devices or business. In such an event, we mayincur substantial costs, including but not limited to, costs associated with remediating the effects of the cybersecurity incident, costs for security measures toguard against similar future incidents and costs to recover data. Further, consumer confidence in the integrity and security of personal information and criticaloperations data in the life sciences industry generally could be shaken to the extent there are successful cyberattacks at other companies, which could have amaterial, adverse effect on our business, financial position or results of operations. 16 If we are found to have violated laws concerning the privacy and security of patient health information or other personal information, we could be subject tocivil or criminal penalties, which could increase our liabilities and harm our reputation or our business. There are a number of domestic and international laws protecting the privacy and security of personal information. These laws place limits on how we maycollect, use, share and store medical information and other personal information, and they impose obligations to protect that information against unauthorizedaccess, use, loss, and disclosure. If we, or any of our service providers who have access to the personal data for which we are responsible, are found to be in violation of the privacy or securityrequirements, we could be subject to civil or criminal penalties, which could increase our liabilities, harm our reputation and have a material adverse effect onour business, financial condition and operating results. Although we utilize a variety of measures to secure the data that we control, even compliant entities canexperience security breaches or have inadvertent failures despite employing reasonable practices and safeguards. We may also face new risks relating to data privacy and security as the United States, individual U.S. states, E.U. member states, and other internationaljurisdictions adopt or implement new data privacy and security laws and regulations as we continue to commercialize our products worldwide. For example, theCalifornia Consumer Privacy Act, which took effect on January 1, 2020, may impose additional requirements on us and increase our regulatory and litigationrisk. As we continue to expand, our business will need to adapt to meet these and other similar legal requirements. We may be involved in litigation. There has been substantial litigation and other proceedings in the medical diagnostic industries. Defending against litigation and other third-party claims wouldbe costly and time-consuming and would divert management’s attention from our business, which could lead to delays in our development orcommercialization efforts. If third parties are successful in their claims, we might have to pay substantial damages or take other actions that are adverse toour business. Changes in laws may adversely affect our business. Our business and the business of our customers and partners are subject to the laws and regulations in a number of jurisdictions. Unforeseen changes in lawsand government policy both in Australia, the EU, the US and elsewhere, could materially impact our operations, assets, contracts and profitability. We are exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act. Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 (“Sarbanes-OxleyAct”) and related regulations implemented by the SEC, have substantially increased legal and financial compliance costs. We expect that our ongoingcompliance with applicable laws and regulations, including the Exchange Act and the Sarbanes-Oxley Act, will involve significant and potentially increasingcosts. In particular, we must annually evaluate our internal controls systems to allow management to report on our internal controls. We must perform thesystem and process evaluation and testing (and any necessary remediation) required to comply with the management certification and, when applicable,auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. If we are not able to continue to satisfy the requirements of Section 404 adequately,we may be subject to sanctions or investigation by regulatory authorities, including the SEC. Any action of this type could adversely affect our financial results,investors’ confidence in our company and our ability to access capital markets, and could cause our stock price to decline. Tax Risks Our ability to carry forward our Australian tax losses and certain other tax attributes may be impacted. As of December 31, 2023, we had A$30,582,036 of accumulated tax losses available for carry forward against future earnings, which under Australian tax lawsdo not expire but may not be available under certain circumstances. The Company also has A$ 3,374,776 of non-refundable R&D tax offset as at December 31,2023. The R&D Tax offset is a non-refundable tax offset, which assists to reduce a company’s tax liability. Once the liability has been reduced to zero, anyexcess offset may be carried forward into future income years. 17 To continue to offset our accumulated tax losses and the non-refundable R&D tax offset against future earnings, we have to meet the requirements of theContinuity of Ownership Test (“COT”) and failing that the Same Business Test (“SBT”). A taxpayer generally satisfies the COT where the company candemonstrate at all times that the same persons (i.e. ultimate individual owners) beneficially held more than 50% of the voting power in the company; and therights to more than 50% of the company’s dividends; and the rights to more than 50% of the company’s capital distributions, for the period commencing at thebeginning of the loss year (i.e. the year that the relevant tax loss was incurred) to the end of the income year in which the company seeks to utilize the loss. Inperforming a SBT analysis, UBI would need to show that the activities undertaken by the business immediately prior to the COT breach is either the same orsimilar to the business activities undertaken in the loss recoupment year. Our share ownership may change overtime and we may not be able to satisfy COT and we may venture into other businesses which are not similar to ourexisting activities hence we may not be able to utilize our losses for offset against future earnings which will negatively impact our cash flows. We benefit from government grants and rebates. Our principal sources of liquidity are cash flows from operations (revenue from services and product sales). We have also financed our business operationsthrough government grants and rebates, including the refundable tax offset (“tax incentive income”). The refundable tax offset is one of the key elements ofthe Australian Government’s support for Australia’s innovation system and if eligible, provides the recipient with cash based upon our eligible research anddevelopment activities and expenditures. For the year ended December 31, 2022, our aggregate turnover was less than A$20,000,000 and we received a taxincentive income of A$4,495,137. Additionally, we will be eligible to make this claim for the year ended December 31, 2023, as our revenues are less thanA$20,000,000. We anticipate receiving a refundable tax offset of A$3,774,343 in 2024 following the lodgment of our 2023 Australian company tax return. Despite these, there can be no assurance that we will qualify and be eligible for such incentives or that the Australian Government will continue to provideincentives, offsets, grants and rebates on similar terms or at all. Investors may be subject to Australian and/or US taxation. The receipt of dividends by Australian tax resident security holders and any subsequent disposal of our securities by any such Australian tax resident may haveboth United States and Australian tax consequences depending upon their individual circumstances. This may result in a security holder being subject to tax inboth jurisdictions and a tax credit may or may not be available in one jurisdiction to offset the tax paid in the other jurisdiction depending upon the securityholder’s individual circumstances. Risks Related to the Ownership of Our Shares The price of our shares is highly volatile and could decline significantly. Our shares of common stock in the form of CDIs were quoted on the ASX and began trading on December 13, 2006. The price of our shares is highly volatileand could decline significantly. The market price of our shares historically has been, and we expect will continue to be, subject to significant fluctuations overshort periods of time. Some of the factors that may cause the market price of our common stock to fluctuate include: ●the entry into, or termination of, key agreements, including collaboration and supply agreements and licensing agreements with key strategic partners; ●any inability to obtain additional financing on favorable terms to fund our operations and pursue our business plan if additional financing becomesnecessary; ●future sales of our common stock or debt or convertible debt securities or other capital-raising activities, and the terms of those issuances ofsecurities; ●time to market and future revenue streams from product sales, if any, by our collaborative partners, and the extent of demand for, and sales of, ourproducts; ●the initiation of material developments in, or conclusion of disputes or litigation with our customers or partners or to enforce or defend any of ourintellectual property rights or otherwise; ●our results of operations and financial condition, including our cash reserves, cash burn and cost level; ●general and industry-specific economic and regulatory conditions that may affect our ability to successfully develop and commercialize products; ●the loss of key employees; ●the introduction of technological innovations or other products by our competitors; ●sales of a substantial number of CDIs by our large stockholders; ●changes in estimates or recommendations by securities analysts, if any, who cover our common stock; ●issuance of shares or CDIs by us, and sales in the public market of the shares or CDIs issued, upon exercise of our outstanding warrants; and ●period-to-period fluctuations in our financial results. We may experience a material decline in the market price of our CDIs, regardless of our operating performance and therefore, a holder of our shares may notbe able to sell those shares at or above the price paid by such holder for such shares. Sales by our larger shareholders may create volatility, price pressure orimpact how the value of our shares is perceived. 18 Class action litigation has been brought in the past against companies which have experienced volatility in the market price of their securities. We may becomeinvolved in this type of litigation in the future. Litigation of this type is often extremely expensive and diverts management’s attention and our resources. Our securities are not currently traded on any United States public markets and there are currently restrictions on the ability of United States persons toacquire our securities on the ASX. There is no public market for our shares in the United States or in any other jurisdiction other than Australia. We have not determined whether we will seek thequotation of our shares on any United States public trading market. Even if our shares are in the future listed on a United States public market, the liquidity ofour shares may not improve, and the United States market price may not accurately reflect the price or prices at which purchasers or sellers would be willing topurchase or sell our common stock. In addition, our securities are “restricted securities” as that term is defined in Rule 144 under the Securities Act. Restricted securities may be resold to U.S.persons as defined in Regulation S only if registered for resale or pursuant to an exemption from registration under the Securities Act. We have not agreed toregister any of our shares of common stock for resale by security holders. A significant amount of our shares are controlled by individuals or voting blocks, and the interests of such individuals or voting blocks could conflict withthose of the other stockholders. Single stockholders with significant holdings or relatively small groups of stockholders have the power to influence matters requiring the approval ofstockholders. Viburnum Funds Pty Ltd (“Viburnum”), as investment manager for its associated funds and entities holds a beneficial interest and voting powerover approximately 26% of our shares. For details of our substantial stockholders and the interests of our directors, refer to “Part III, Item 12 — SecurityOwnership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Provisions in our charter documents and under Delaware law could make the possibility of our acquisition, which may be beneficial for our stockholders, moredifficult and may prevent attempts by our stockholders to replace or remove current management. Provisions in our certificate of incorporation and our bylaws may delay or prevent an acquisition of us or a change in our management and frustrate or preventattempts by our stockholders to replace or remove our current management by making it more difficult to remove our current directors. Such provisions include: ●the division of our board of directors into classes whose terms expire at staggered intervals over a three-year period and advance notice requirementsfor nominations to our board of directors and proposing matters that can be acted upon at shareholder meetings; ●our stockholders do not have the power to call special meetings of our stockholders; and ●our stockholders are prohibited from taking action by written consent, and all stockholder action is required to take place at a meeting of ourstockholders. These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation,we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, or DGCL, which prevents interestedstockholders, such as certain stockholders holding more than 15% of our outstanding common stock, from engaging in certain business combinations unless(i) prior to the time such stockholder became an interested stockholder, our board of directors approved the transaction that resulted in such stockholderbecoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, theinterested stockholder owned at least 85% of our common stock, or (iii) following board approval, such business combination receives the approval of theholders of at least two-thirds of our outstanding common stock not held by such interested stockholder at an annual or special meeting of stockholders. Any provision of our certificate of incorporation, bylaws, or Delaware law that has the effect of delaying, preventing, or deterring a change in control could limitthe opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willingto pay for our common stock. Other Risks We may not be able to raise capital or secure credit if and when required. We may not be able to raise capital or secure further credit if and when required. If we are unable to raise capital or secure further credit when required, we mayhave to delay, reduce the scope of or eliminate some or all of our development programs or commercialization efforts or liquidate some or all of our assets. 19 General Risk Factors Adverse economic conditions may harm our business. Market and economic conditions have been volatile. Market and economic concerns include fluctuations in foreign exchange rates, inflation, interest rates,rate of economic growth, taxation laws, consumer spending, unemployment rates, government fiscal, monetary and regulatory policies and consumer andbusiness sentiment. Any of these factors have the potential to cause costs to increase or revenues to decline. Turbulence in international markets andeconomies may adversely affect our ability to enter into collaborative arrangements, the behavior and financial condition of our current and any futurecustomers and partners and the spending patterns of users of the products we are developing. This may adversely impact demand for our services and forproducts developed by us. In addition, economic conditions could also impact our suppliers, which may impact on their ability to provide us with materials andcomponents which in turn may negatively impact our business. 20 Item 1B. Unresolved Staff Comments. None. 21 Item 1C. Cybersecurity. The Company’s Board of Directors takes seriously both the responsibility to guard against cybersecurity threats and its compliance with the SEC Cybersecurityregulations adopted on July 26, 2023. Our Board of Directors has standing agenda to review and discuss on cybersecurity matters with management duringeach meeting. Management is updated on cybersecurity matters by the IT Senior Systems Administrator (“ITSSA”). Our cybersecurity risk management program leverages a combination of processes, technologies and personnel with expertise in cybersecurity to comply withapplicable regulations and detect and respond to cyber-attacks, data breaches, security incidents, and compromises of personal information, as well as toregularly and promptly inform management and our Board of Directors of any significant cybersecurity risks and developments. Our ITSSA, who has significant experience in managing cybersecurity risks is directly responsible for establishing cybersecurity strategies and structures andmanaging ongoing cybersecurity risk management activities, reports relevant information regarding cybersecurity threats and risks to management.Management can then further elevate matters to the full Board of Directors, as necessary or required. The Company and the Board of Directors are committed to remaining updated on evolving cybersecurity regulations and best practices, as well as thedevelopment and amendment of processes to meet these changing demands. The Company did not experience any cyber security incident during 2023. 22 Item 2. Properties. The Company leases approximately 5,000 square meters of office, research and development and manufacturing facilities at 1 Corporate Avenue, Rowville inMelbourne, Australia. The lease for 1 Corporate Avenue will expire on December 31, 2025 with an option to renew the lease for two further terms of five yearseach. We manufacture our test strips using custom manufacturing equipment. Depending on the number of strips required to be manufactured, it may become necessary in the future for us to acquire additional large-scale equipment tosatisfy manufacturing demand. If our existing facilities and equipment are fully utilized for the manufacture of test strips for one of our customers or our ownproducts, we will need to secure additional or alternative facilities and establish additional large-scale equipment sufficient to meet future manufacturingrequirements. On June 28, 2021, HRL entered a premises lease to occupy approximately 418 square meters of office and laboratory facilities at 44 Frid Street, Hamilton,Ontario, Canada. The lease commenced in February 2022, with a ten-year contractual period. HRL relocated to the new premises in February 2022. The leasedoes not include an option to renew the lease for a further term. 23 Item 3. Legal Proceedings. There are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject. Thereare no known contemplated material governmental proceedings pending against the Company. 24 Item 4. Mine Safety Disclosures. Not applicable. 25 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market information Our shares of common stock are not currently traded on any established United States public trading market. We do not currently intend to seek the quotationof our shares of common stock on any United States public trading market. We cannot assure you that we will never seek to be quoted on any United Statespublic trading market or that we would meet any applicable listing requirements. Our shares of common stock are traded on the ASX in the form of CHESS Depositary Interests, or CDIs, under the ASX trading code “UBI”. The Clearing HouseElectronic Subregister System, or “CHESS”, is an electronic system which manages the settlement of transactions executed on the ASX and facilitates thepaperless transfer of legal title to ASX quoted securities. CHESS cannot be used directly for the transfer of securities of U.S. domiciled companies. CDIs areused as a method of holding and transferring the legal title of these securities on the ASX which are not able to be electronically traded in CHESS. CDIs areexchangeable, at the option of the holder, into shares of our common stock at a ratio of 1:1. The main difference between holding CDIs and holding theunderlying securities (in this case our shares) is that a holder of CDIs has beneficial ownership of the equivalent number of our shares instead of legal title.Legal title is held by CHESS Depositary Nominees Pty Ltd, or “CDN”, and the shares are registered in the name of CDN and held by CDN on behalf of and for thebenefit of the holders of CDIs. CDN is a wholly owned subsidiary of ASX. Holders of CDIs who do not wish to have their trades settled in CDIs on the ASX may request that their CDIs be converted into shares, in which case legal titleto the shares of common stock are transferred to the holder of the CDIs. Likewise, stockholders who wish to be able to trade on the ASX can do so byrequesting that their shares be converted into CDIs and by lodging their applicable share certificate with our share registrar and signing a share transfer formwith respect to the relevant shares. Our share registrar will then transfer the shares from the stockholder to CDN and establish a CDI holding in the name of thestockholder (now a CDI holder). Security details As of February 20, 2024, there were 212,369,435 shares of our common stock issued and outstanding and 12,406,300 options and performance rights that areexercisable for an equivalent number of shares of common stock. All of our issued and outstanding shares of common stock are fully paid. Under applicable U.S. securities laws all of the shares of our common stock are “restricted securities” as that term is defined in Rule 144 under the SecuritiesAct. Restricted securities may be resold to U.S. persons as defined in Regulation S only if registered or pursuant to an exemption from registration under theSecurities Act. We have not agreed to register any of our shares of common stock for resale by security holders. Holders Currently, CDN holds the majority of our shares on behalf of and for the benefit of the holders of CDIs. The balance of the shares are held by certain of ouremployees generally as part of our restricted employee share scheme. Set out below is the approximate aggregate number of our registered holders of CDIsand shares at the specific date below: DateTotal Number ofRegistered HoldersNumber of RegisteredHolders that are UnitedStates ResidentsAt February 20, 20242,5908 Dividends To date, we have not declared or paid any cash dividends on our shares or CDIs. Recent Sales of Unregistered Securities None. 26 Restricted Employee Shares Issued to Employees Our Employee Share Plan was adopted in 2021 (“the Equity Incentive Plan”). The Equity Incentive Plan permits our Board to grant shares of our common stockto our employees and directors. The number of shares able to be granted is limited to the amount permitted to be granted at law, the ASX Listing Rules and bythe limits on our authorized share capital in our certificate of incorporation. We issue these shares in reliance upon exemptions from registration underRegulation S under the Securities Act on the basis that none of the recipient of such shares are “U.S. person” as such term is defined in Regulation S. There were no restricted shares issued by the Company within the past three fiscal years and the balance of the restricted shares as of December 31, 2023, isnil. There were no performance rights issued by the Company to employees during the year ended December 31, 2023. There were 1,555,000 performance rights issued by the Company to select employees during the year ended December 31, 2022, of which nil shares vestedduring the year ended December 31, 2023.The number of securities able to be granted is limited to the amount permitted to be granted at law, the ASX ListingRules and by the limits on our authorized share capital in our amended and restated certificate of incorporation. The Listing Rules of ASX generally prohibitscompanies whose securities are quoted on ASX from issuing securities exceeding 15% of issued share capital in any 12-month period, without stockholderapproval. Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no repurchases of equity securities registered under Section 12 of the Exchange Act made in the fourth quarter of the fiscal year covered by thisForm 10-K by or on behalf of the Company or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Exchange Act). 27 Item 6. [Reserved]. 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The information required by this item is incorporated by reference to our 2023 Annual Report under the caption “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” on pages F2 to F8. 29 Item 7A. 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 7A. 30 Item 8. Financial Statements and Supplementary Data. The information required by this item is incorporated by reference to our 2023 Annual Report under the following captions: ●Consolidated Balance Sheets ●Consolidated Statements of Comprehensive Income/(Loss) ●Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss) ●Consolidated Statements of Cash Flows ●Notes to Consolidated Financial Statements ●Report of Independent Registered Public Accounting Firm (PCAOB ID 1379) The items are included on pages F10 through F30 of the 2023 Annual Report. 31 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None. 32 Item 9A. Controls and Procedures. Disclosure Controls and Procedures. As of the end of the period covered by this Form 10-K, the Company and its management evaluated the effectiveness ofthe design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e)). The Company’s disclosure controls andprocedures 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 isrecorded, 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 submitsunder the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, orpersons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. John Sharman, Principal Executive Officer andSalesh Balak, Principal Financial Officer, reviewed and participated in this evaluation. Based on this evaluation, Mr. Sharman and Mr. Balak concluded that, asof the end of the period covered by this Form 10-K, the Company’s disclosure controls and procedures were effective. Changes in Internal Control over Financial Reporting. During the quarter ended December 31, 2023, there were no changes in the Company’s internal controlover financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 33 Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting (as defined in Rule 13a-15(f)and 15d – 15(f) under the Exchange Act). Our internal control over the Company’s financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles and includes those policies and procedures that: ●Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the dispositions of the assets of theCompany; ●Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations ofmanagement and the board of directors of the Company; and ●Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets thatcould have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations ofeffectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions or because of declines in thedegree of compliance with the policies or procedures. Our management, with the participation of the Principal Executive Officer and Principal Financial Officer, assessed the effectiveness of the Company’s internalcontrol over financial reporting as of December 31, 2023. In making this assessment, the Company’s management used the criteria set forth by the Committeeof Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on this evaluation, our management, with the participation of the Principal Executive Officer and Principal Financial Officer, concluded that, as ofDecember 31, 2023, our internal control over financial reporting was effective. /s/ John Sharman /s/ Salesh BalakJohn Sharman Salesh BalakPrincipal Executive Officer Principal Financial Officer February 29, 2024 34 Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting. This Annual Report does not include an attestation report of our Independent Registered Public Accounting Firm regarding internal control over financialreporting. We are an emerging growth company and are a non-accelerated filer under the SEC rules, and are exempt from the requirement to provide an auditorattestation report. 35 Item 9B. Other Information. None. 36 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 37 Part III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this Item 10 is incorporated by reference to our definitive proxy statement to be filed with the SEC within 120 days after December31, 2023, in connection with our Annual Meeting of Stockholders in 2024 (the “2024 Proxy Statement”) under the captions “Management of the Company” and,if applicable, “Delinquent Section 16(a) Reports.” 38 Item 11. Executive Compensation. The information required by this Item 11 is incorporated by reference to the 2024 Proxy Statement under the captions “Management of the Company –Compensation of Directors,” “Executive Compensation” and “Management of the Company – Board Meetings and Board Committees – CompensationCommittee Interlocks and Insider Participation.” 39 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item 12 is incorporated by reference to the 2024 Proxy Statement under the captions “Security Ownership of Certain BeneficialOwners and Management,” and “Executive Compensation – Equity Compensation Plan Information.” 40 Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item 13 is incorporated by reference to the 2024 Proxy Statement under the captions “Certain Relationships and RelatedTransactions,” and “Management of the Company.” 41 Item 14. Principal Accountant Fees and Services. The information required by this item is incorporated by reference to the 2024 Proxy Statement under the caption “Independent Public Accountants – AuditFees.” 42 Part IV Item 15. Exhibits and Financial Statement Schedules. (a)(1)Financial Statements The following financial statements are incorporated by reference from pages F-9 through F-30 of our Annual Report to Stockholders for the fiscalyear ended December 31, 2023, as provided in Item 8 hereof: Report of Independent Registered Public Accounting Firm (PCAOB ID 1379)F-9Consolidated Balance SheetsF-10Consolidated Statements of Comprehensive Income/(Loss)F-11Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss)F-12Consolidated Statements of Cash FlowsF-13Notes to Consolidated Financial Statements F-14 (a)(2)All other schedules are omitted because of the absence of the conditions under which they are required or because the required information isincluded elsewhere in the financial statements. (a)(3) and (b) Exhibits – Refer below. Exhibit Number Description Location3.1 Amended and restated certificate of incorporationdated December 5, 2006. Incorporated by reference to our General Form for Registration ofSecurities on Form 10 filed on April 30, 2007 as Exhibit 3.1.3.2 Amended and restated by-laws dated December 5,2006. Incorporated by reference to our Amendment No. 5 to Form 10 filed onApril 29, 2008 as Exhibit 3.2.4.3 Description of Securities Incorporated by reference to our Annual Report on Form 10-K filed onFebruary 24, 2021 as Exhibit 4.3.10.1 Amended and Restated License Agreement, betweenLifeScan, Inc. and Universal Biosensors Pty Ltd datedon August 29, 2011 and effective as of August 19,2011. Incorporated by reference to our Current Report on Form 8-K filed onAugust 30, 2011 as Exhibit 10.1.10.2 Amended and Restated Development and ResearchAgreement between Cilag GmbH International andUniversal Biosensors Pty Ltd dated on August 29,2011 and effective as of August 19, 2011. Incorporated by reference to our Current Report on Form 8-K filed onAugust 30, 2011 as Exhibit 10.2.10.3 Form of indemnity agreement entered into withdirectors of us, our principal financial officer andcompany secretary Incorporated by reference to our Current Report on Form 8-K filed on March7, 2022 as Exhibit 10.1.10.4# CEO Option Plan. Incorporated by reference to our Current Report on Form 8-K filed onSeptember 17, 2021 as Exhibit 10.1.10.5# Employment agreement between UniversalBiosensors Pty Ltd and Mr. Salesh Balak effectiveNovember 27, 2006. Incorporated by reference to our General Form for Registration ofSecurities on Form 10 filed on April 30, 2007 as Exhibit 10.8.10.6 Amended and Restated Master Services and SupplyAgreement (which amends and restates the MasterServices and Supply Agreement by and betweenUniversal Biosensors Pty. Ltd., Universal Biosensors,Inc., and LifeScan, Inc. dated October 29, 2007 filedon November 14, 2007 as Exhibit 10.1 to our QuarterlyReport on Form 10-Q and the First Amendment to theMaster Services and Supply Agreement filed onMarch 30, 2009 as Exhibit 10.14 to our Annual Reporton Form 10-K). Incorporated by reference to our Quarterly Report on Form 10-Q filed onAugust 7, 2009 as Exhibit 10.3. Confidentiality treatment has been grantedfor portions of this exhibit. These confidential portions have been omittedand were filed separately with the SEC. 43 10.7 Third Amendment to Amended and Restated MasterServices and Supply Agreement by and amongUniversal Biosensors, Inc., Universal Biosensors PtyLtd, and Cilag GmbH International. Incorporated by reference to our Current Report on Form 8-K filed onDecember 20, 2013 as Exhibit 10.2.10.8 Deed of Surrender and Lease between UniversalBiosensors Pty Ltd and Bowmayne Pty Ltd Incorporated by reference to our Current Report on Form 8-K filed on March18, 2021 as Exhibit 10.1.10.9 Employment agreement between UniversalBiosensors Pty Ltd and Mr. John Sharman effectiveMarch 3, 2020. Incorporated by reference to our Quarterly Report on Form 10-Q/A filed onMay 1, 2020 as Exhibit 10.110.10 Definitive Agreements between Universal BiosensorsPty Ltd and Siemens Healthcare Diagnostics, Inc.dated September 18, 2019. Incorporated by reference to our Quarterly Report on Form 10-Q filed onNovember 4, 2019 as Exhibit 10.2310.11# Employee Incentive Plan Incorporated by reference to our Current Report on Form 8-K filed onSeptember 17, 2021 as Exhibit 10.2.10.12# Award Agreement between Universal Biosensors,Inc. and Mr. Salesh Balak, dated February 28, 2021 Incorporated by reference to our Current Report on Form 8-K filed on March18, 2021 as Exhibit 10.2.10.13# Award Agreement between Universal Biosensors,Inc. and Mr. John Sharman, dated February 28, 2021 Incorporated by reference to our Current Report on Form 8-K filed on March18, 2021 as Exhibit 10.3.10.14 Underwriting Agreement between Viburnum FundsPty Ltd and Universal Biosensors, Inc. Incorporated by reference to our Quarterly Report on Form 10-Q filed onAugust 10, 2022 as Exhibit 10.18.13.0 Annual Report. Filed herewith.14.0 Code of Ethics. Incorporated by reference to our Annual Report on Form 10-K filed onMarch 28, 2008 as Exhibit 14.21.0 List of Subsidiaries. Filed herewith.24.0 Power of Attorney. Included on signature page.31.1 Certification of Principal Executive Officer pursuantto Section 302 of the Sarbanes-Oxley Act. Filed herewith.31.2 Certification of Principal Financial Officer pursuant toSection 302 of the Sarbanes-Oxley Act. Filed herewith.32.0 Certification of Principal Executive Officer andPrincipal Financial Officer pursuant to Section 906 ofthe Sarbanes-Oxley Act. As provided in Rule 406T of Regulation S-T, this information is furnishedherewith and not filed for purposes of Sections 11 and 12 of the SecuritiesAct of 1933 and Section 18 of the Securities Exchange Act of 1934.101 The following materials from the UniversalBiosensors, Inc. Annual Report on Form 10-K for thefinancial year ended December 31, 2023 formatted inExtensible Business Reporting Language (XBRL): (i)the Consolidated Balance Sheets, (ii) theConsolidated Statements of ComprehensiveIncome/(Loss), (iii) the Consolidated Statements ofChanges in Stockholder’s Equity and ComprehensiveIncome/(Loss), (iv) the Consolidated Statements ofCash Flows and (v) the Notes to ConsolidatedFinancial Statements. As provided in Rule 406T of Regulation S-T, this information is furnishedherewith and not filed for purposes of Sections 11 and 12 of the SecuritiesAct of 1933 and Section 18 of the Securities Exchange Act of 1934.104 Cover Page Interactive Data File (Formatted as InlineXBRL and contained in Exhibit 101. #Indicates a management or compensatory plan. 44 Item 16. Form 10-K Summary. None. 45 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on itsbehalf by the undersigned, thereunto duly authorized. Date: February 29, 2024 Universal Biosensors, Inc. (Registrant) By: /s/ John Sharman John SharmanPrincipal Executive Officer Power of Attorney Each person whose signature appears below hereby constitutes and appoints John Sharman and Salesh Balak and each of them, his or her attorneys-in-fact,each with the power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to thisreport on Form 10-K, and to file the same, with all exhibits thereto and all documents in connection therewith, with the SEC, granting unto said attorneys-in-factand agents, and each of them full power and authority to do and perform each and every act and all intents and purposes as he or she might or could do inperson, hereby ratifying and confirming all that such attorneys in-fact and agents or any of them or his or their substitute or substitutes, may lawfully do orcause to be done by virtue thereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following on behalf of the registrant and in thecapacities and on the dates indicated: SignatureTitleDate /s/ John SharmanChief Executive OfficerFebruary 29, 2024John Sharman(Principal Executive Officer) /s/ Salesh BalakChief Financial OfficerFebruary 29, 2024Salesh Balak(Principal Financial Officer and Principal Accounting Officer) /s/ Craig ColemanDirectorFebruary 29, 2024Craig Coleman /s/ Judith SmithDirectorFebruary 29, 2024Judith Smith /s/ David HoeyDirectorFebruary 29, 2024David Hoey /s/ Graham McLeanNon-Executive Chairman and DirectorFebruary 29, 2024Graham McLean 46 Exhibit 13.0 Universal Biosensors, Inc. 2023 Annual Report Contents Management’s Discussion and Analysis of Financial Condition and Results of OperationsF-2 Report of Independent Registered Public Accounting FirmF-9 Consolidated Balance SheetsF-10 Consolidated Statements of Comprehensive Income/(Loss)F-11 Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss)F-12 Consolidated Statements of Cash FlowsF-13 Notes to Consolidated Financial Statements F-14 Unless otherwise noted, references in this Annual Report 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 whollyowned US operating subsidiary, Universal Biosensors LLC (“UBS LLC”) and UBS’ wholly owned Canadian operating subsidiary, Hemostasis ReferenceLaboratory Inc. (“HRL”) and wholly owned Dutch operating subsidiary, Universal Biosensors B.V. (“UBS BV”). Unless otherwise noted, all references in this Form10-K to “$”, “A$” or “dollars” and dollar amounts are references to Australian dollars. References to “US$”, “CAD$” and “€” are references to United Statesdollars, Canadian dollars and Euros respectively. F-1 Universal Biosensors, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements andrelated notes that appear elsewhere in this Annual Report. In addition to historical financial information, the following discussion contains forward-lookingstatements that reflect our plans, estimates and beliefs and other forward-looking information, including the types of forward-looking statements described inour Form 10-K. Our (and our customer’s, partners’ and industry’s) actual results, levels of activity, performance or achievements may differ materially fromthose discussed in the forward-looking statements below and elsewhere in our Form 10-K. Factors that could cause or contribute to these differences includethose discussed below and elsewhere in our Form 10-K, particularly in "Risk Factors". Our Business We are a specialist biosensor technology company focused on commercializing a range of biosensors using proprietary electrochemical cells (strips) andpoint-of-use devices. Our ambition is to build a multi-product stable of biosensors in large markets which generates ongoing revenue streams. Our products aresold to human health, oneology (wine) and the vet industries. Key developments during 2023 include: ●Revenue from the sale of products increased 67% to $5.64m ●Total revenue increased 47% to A$6.63 million ●Gross profit increased 100% to A$4.28 million ●Operating costs decreased as follows: oR&D expenses declined by 60% to A$4.97 million oTotal operating expenses declined by 43% to A$20.97 million ●Net loss after tax and impairment of intangible assets improved by A$20.11 million ●Completion of Xprecia Prime clinical trials and submission of 510K application to the US (“FDA”) ●Global launch of Sentia's Fructose, Acetic Acid and Titratable Acidity tests ●Global launch of the Petrackr blood glucose product ●First sales of next generation Xprecia Prime in Europe ●Major tender win to supply Xprecia Prime in Italy ●Received regulatory approval and first order for Xprecia Prime in India and Malaysia ●Received regulatory approval for the sale of Xprecia Prime 4U directly to patients for self-testing in Europe ●The continuing development of our Oncology platform Results of Operations Analysis of Consolidated Revenue The financial results of the products and services we sold during the years ended December 31, 2023 and 2022 are as follows: Year Ended December 31, 2023 2022 A$ A$ Revenue from products & services 6,632,838 4,524,962 Cost of goods sold and services (2,347,901) (2,385,931)Gross profit 4,284,937 2,139,031 Total revenue and gross profit increased by 47% and 100%, respectively delivering a gross profit of $4,284,937 in the year ended December 31, 2023. Revenue from Products The financial results of the products we sold during the years ended December 31, 2023 and 2022 are as follows: Year Ended December 31, 2023 2022 A$ A$ Xprecia 2,607,506 2,366,331 Sentia 2,528,666 1,013,071 Petrackr 500,320 0 5,636,492 3,379,402 Cost of goods sold (2,032,452) (1,386,889)Gross profit 3,604,040 1,992,513 Our total revenue from products increased by 67% and our gross profit increased by 81%. F-2 Universal Biosensors, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations Revenue from coagulation testing products grew 10% but was negatively impacted by the “aggressive selling of stock” by Siemens as a result of its rights tosell Xprecia products ending formally on March 31, 2023. Revenue from wine testing products increased by 150%. During 2022, our revenues from wine testing products were primarily from the sale of Sentia analyzers,Free SO2 and Malic Acid test strips. During 2023, we began generating revenues from the sale of the following additional test products – Fructose, Glucose,Acetic Acid and Titratable Acidity. Petrackr, launched in May 2023, generated revenue of A$500,320. Our gross profit has increased largely as a result of increased throughput taking into account largely the fixed cost nature of our business. Revenue from Services The financial results of the coagulation testing and other services we provided during the respective periods are as follows: Year Ended December 31, 2023 2022 A$ A$ Laboratory testing services 996,346 1,145,560 Cost of services (315,449) (999,042)Gross profit 680,897 146,518 Despite this decline in revenue, HRL business accelerated during the second half of the year ended December 31, 2023, which accounted for 69% of totalrevenue HRL business generated during the year ended December 31, 2023. Product Support Product support relates to post-market technical support provided by us for our products in the market. Product support has increased by 68% compared to theprevious financial year as a result of the launch of new products. Depreciation and Amortization Expenses Year Ended December 31, 2023 2022 A$ A$ Depreciation 831,409 1,139,984 Amortization 129,504 1,645,651 Depreciation allocated to cost of goods sold & services (4,638) (135,964) 956,275 2,649,671 Depreciation of fixed assets is calculated on a straight-line basis over the useful life of property, plant and equipment. Although our property, plant andequipment has increased, the decline in depreciation during the year ended December 31, 2023, compared to the previous financial year is due to certainassets not being currently depreciated as they are not available for use (currently in work in progress) and also as a result of certain assets fully depreciatedduring the year. Amortization expense for the year ended December 31, 2023 represents the Company’s software. Amortization expense has declined during the year endedDecember 31, 2023 compared to the previous financial year as the intangible assets which were acquired in September 2019 pursuant to the Siemensacquisition were impaired as at December 31, 2022. Impairment of Definite-Lived Intangible Assets As part of a strategic review of the balance sheet UBI reviewed its intangible assets and recorded a A$11,014,785 impairment charge for the year endedDecember 31, 2022.This charge relates solely to the previously capitalized Siemens agreement which ended September 2023. Research and Development Expenses The primary focus of the R&D activities during the year ended December 31, 2023 were developing the Company's: ●Sentia wine testing platform (Fructose, Acetic Acid and Titratable Acidity tests all of which has now been launched) including further enhancement ofcertain Sentia tests; ●Xprecia Prime next generation PT-INR Coagulation platform including U.S. Food and Drug Administration (“FDA”) Clinical Trial programs. Thesubmission to the FDA was made in March 2023 and response received from the FDA in June 2023. The Company submitted its full response to theFDA in November 2023 and assuming there are no further queries, an FDA decision is expected during Q1 2024; F-3 Universal Biosensors, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations ●Petrackr biosensor strip and meter to be used for the detection and monitoring of diabetes in non-humans. The Petrackr product was launched in May2023; ●Oncology platform Tn Antigen biosensor used for the detection, staging and monitoring of cancer; and ●Aptamer based sensing platform including COVID-19 and female fertility testing. As we finalize the development of our products, obtain the necessary regulatory approval required for such products and subsequently launch the same, ourR&D activity relating to these developments is expected to reduce. During Q1 2023, we finalized the development of and launched the Sentia Fructose andAcetic Acid tests. The Titratable Acidity test was launched in April 2023. We submitted to the FDA our Xprecia Prime clinical trial results. Once approved by theFDA, we will be able to launch this product in the United States. We launched our Petrackr product in May 2023. As a result of these activities our R&Dexpenditure declined by 60% to A$4,974,437 during the year ended December 31, 2023, from A$12,291,750 during the year ended December 31, 2022. The timing and cost of any development program is dependent upon a number of factors, including achieving technical objectives, which are inherentlyuncertain and subsequent regulatory approvals. We have project plans in place for all our development programs which we use to plan, manage and assess ourprojects. As part of this procedure, we also undertake commercial assessments of such projects to optimize outcomes and decision making. R&D expenses consist of costs associated with research activities, as well as costs associated with our product development efforts, including pilotmanufacturing 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 ofleasehold 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 certainpersonnel. Other selling, general and administrative expenses include sales and marketing costs to support our products in the market, shipping and handlingcosts incurred when fulfilling customer orders, repairs and maintenance, insurance, facility costs not otherwise included in R&D expenses, consultancy feesand professional fees including legal services and maintenance fees incurred for patent applications, audit and taxation services. Selling, general and administrative expenses increased by 35% to A$14,879,937 during the year ended December 31, 2023, from A$10,984,316 during the yearended December 31, 2022 due to an investment in the Company’s sales and marketing efforts. The Company now has multiple products in the marketcompared to the same period in the previous financial year and these products are supported by various marketing campaigns and awareness including salespersonnel to support our pipeline of products, webinar series and focused direct marketing campaign. Interest Income Interest income increased by 92% during the year ended December 31, 2023, compared to the previous financial year. The increase in interest income isgenerally attributable to higher interest rates. Interest Expense Interest expense relates to interest being charged on the secured short-term borrowing initiated by the Company for the 2023 financial year and the interestexpense on finance lease liabilities. Financing Costs Disclosed in this account is accretion expense which is associated with the Company’s asset retirement obligations (“ARO”). Decrease in financing costs isas a result of change of estimate for the ARO liability. Research and Development Tax Incentive Income As of December 31, 2023 the aggregate turnover of the Company for the year ending December 31, 2023 was less than A$20,000,000 and accordingly anestimated A$3,774,343 has been recorded as research and development tax incentive income for the year then ended. Offset against this was anoverstatement of research and development tax incentive income of A$278,413 for the year ended December 31, 2022 and as a result the aggregate amountrecognized as income is A$3,495,930 for the year ended December 31, 2023. The decrease year on year is driven by the decrease in eligible research anddevelopment expenditure incurred during the year ended December 31, 2023 as compared to the previous financial year. F-4 Universal Biosensors, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations Research and development tax incentive income for the 2023 financial year has not yet been received and as such is recorded in “Research and developmenttax incentive income” in the consolidated balance sheets as current assets. Exchange Gain/(Loss) Foreign exchange gains and losses arise from the settlement of foreign currency transactions that are translated into the functional currency using theexchange rates prevailing at the dates of the transactions and from the translation at period end exchange rates of monetary assets and liabilities denominatedin foreign currencies. Other Income Other income for the years ended December 31, 2023 and 2022 is as follows: Year Ended December 31, 2023 2022 A$ A$ Federal and state government subsidies 20,000 42,713 Rental income 153,904 137,219 Other income 2,198 2,054 Sundry income 5,739,912 0 5,916,014 181,986 Sundry income represents the following: ●Previously accrued marketing support payment of A$2,896,764 derecognized. ●Previously accrued license fee payable to Siemens of A$2,214,022 derecognized ●A$629,126 as a result of change in estimates in ARO liability Income tax benefit For the year ended December 31, 2022, an income tax benefit had arisen after the deferred income tax liability was reversed as a result of the impairment ofthe definite-lived intangible assets. 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’sdiscussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimatesthat affect the amounts reported. Significant items subject to such estimates and assumptions include research and development tax incentive income, stock-based compensation expenses and asset retirement obligations: F-5 Universal Biosensors, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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 couldchange materially if different estimates and assumptions were used. The probability assumptions are critically examined by management each reportingperiod and reviewed by the board of directors for reasonableness. See note 14 to the Consolidated Financial Statements for additional information includingthe unrecognized compensation expense as of December 31, 2023. 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 therecipient with cash subject to its eligible research and development activities and expenditures. The calculation of the refundable tax offset requiresjudgement as to what is eligible research and development activity and expenditure and the outcome will change if different assumptions were used. Asset Retirement Obligations ARO are legal obligations associated with the retirement and removal of long-lived assets. ARO reflects estimates of future costs directly attributable toremediating the liability, inflation, assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discountingfuture cash outflows. Changes in these factors can result in a change to the ARO recognized by the Company. Note 1, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K describes infurther detail the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management basesits estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form thebasis for making judgments about the carrying values of assets and liabilities and the recognition of revenue and expenses. Actual results may differ fromthese estimates. Financial Condition, Liquidity and Capital Resources Net Cash/(Debt) Our net cash position for the years ended December 31, 2023 and 2022 is shown below: Year Ended December 31, 2023 2022 A$ A$ Cash and cash equivalents Cash and cash equivalents 10,240,429 25,977,703 Debt Short term debt/ loan 911,082 65,768 Net cash 9,329,347 25,911,935 Since inception, we have financed our business primarily through the issuance of equity securities, funding from strategic partners, government grants andrebates (including the research and development tax incentive income), cash flows generated from operations and a loan. The Group has experienced net cash outflows over recent periods, predominantly in conducting research & development activities, product approval andregistrations, launch of our products and support of the same in the marketplace. We continue to reduce research & development expenditure and otheroperating expenditure in the foreseeable future and focus on increasing our commercialization efforts. We are closely monitoring the success of ourcommercialization efforts in relation to the newly launched product portfolio and their impact on our cash position. Given the natural uncertainty that arises withthe launch of new products, if we were to experience delays or encounter issues in these commercialization efforts, we would need and expect to adjust ouroperating expenditure accordingly, to ensure sufficient cash remains available to fund our operations for at least the next twelve months from the date ofissuance. We do not have any external long-term debt obligations and are not subject to any covenant obligations. F-6 Universal Biosensors, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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 isthe risk that the Company may encounter difficulty meeting obligations associated with financial liabilities. The Company manages liquidity risk through themanagement of its capital structure. The purpose of liquidity management is to ensure that there is sufficient cash to meet all the financial commitments andobligations of the Company as they come due. In managing the Company’s capital, management estimates future cash requirements by preparing a budgetand a multi-year plan for review and approval by the Board of Directors (“the Board”). The budget is reviewed and updated periodically and establishes theapproved activities for the next twelve months and estimates the costs associated with those activities. The multi-year plan estimates future activity alongwith the potential cash requirements and is based upon management’s assessment of current progress along with the expected results from the comingyears’ activity. Budget to actual variances is prepared and reviewed by management and are presented on a regular basis to the Board. The carrying value of the cash and cash equivalents and the accounts receivables approximates fair value because of their short-term nature. We regularly review all our financial assets for impairment. A financial asset is a non-physical asset whose value is derived from a contractual claim and in ourcase includes cash and cash equivalents, accounts receivables, fixed deposits and equity shares. There were no impairments recognized as at December 31,2023 or for the year ended December 31, 2022. Measures of Liquidity and Capital Resources The following table provides certain relevant measures of liquidity and capital resources: Year Ended December 31, 2023 2022 A$ A$ Cash and cash equivalents 10,240,429 25,977,703 Working capital 16,053,982 23,586,600 Ratio of current assets to current liabilities 3.70 2.80 Shareholders’ equity per common share 0.09 0.12 The movement in cash and cash equivalents and working capital (calculated as current assets less current liabilities) during the years ended December 31,2023 and 2022 was primarily the result of ongoing investment in our R&D and the general operations of the Company. We have not identified any collection issues with respect to receivables. Summary of Cash Flows Year Ended December 31, 2023 2022 A$ A$ Cash provided by/(used in): Operating activities (14,619,044) (14,702,153)Investing activities (1,473,367) (1,565,144)Financing activities (82,839) 25,011,276 Net increase/(decrease) in cash, cash equivalents and restricted cash (16,175,250) 8,743,979 Our net cash used in operating activities for the years ended December 31, 2023 and 2022 represents receipts offset by payments for our R&D projectsincluding efforts involved in establishing and maintaining our manufacturing operations and selling, general and administrative expenditure. Cash outflowsfrom operating activities primarily represent the ongoing investment in our R&D activities and the general operations of the Company. As our products captureincreased market share, we expect our inflows from the receipt from our customers to eventually exceed the cash outflows from operating activities. Our net cash used in investing activities for all periods is primarily for the purchase of various equipment and for the various continuous improvement programswe are undertaking. Included in accounts payable is an amount of A$35,782 and A$289,371 for the years ended December 31, 2023 and 2022, respectively forthe acquisition of property, plant and equipment. Our net cash decrease in financing activities for the year ended December 31, 2023 primarily represents repayment of the Canada Emergency BusinessAccount unsecured loan of CAD$40,000 and transaction costs sustained during our May 2022 capital raise. Our net cash increase in financing activities for theyear ended December 31, 2022 is primarily the result of A$26 million raised pursuant to a A$20 million fully underwritten rights issue and a A$6 millionplacement which occurred in May 2022. Off-Balance Sheet Arrangement As of December 31, 2023 and December 31, 2022, we did not have any off-balance sheet arrangements, as such term is defined under Item 303 of RegulationS-K, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, resultsof operations, liquidity, capital expenditures or capital resources that is material to investors. F-7 Universal Biosensors, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations Segments We operate in one segment. We are a specialist biosensors company focused on the development, manufacture and commercialization of a range of point-of-use devices for measuring different analytes across different industries. Our operations are in Australia, US, Europe and Canada. The Company’s material long-lived assets are predominantly based in Australia. Recent Accounting Pronouncements See Note 1, Summary of Significant Accounting Policies – Recent Accounting Pronouncements. Financial Risk Management The overall objective of our financial risk management program is to seek to minimize the impact of foreign exchange rate movements and interest ratemovements on our earnings. We manage these financial exposures through operational means and by using financial instruments where we deem appropriate.These practices may change as economic conditions change. Foreign Currency Market Risk We transact business in various foreign currencies, including A$, US$, CAD$ and Euros. The Company is currently using natural hedging to limit currencyexposure, however the Company has an established foreign currency hedging program available where forward contracts are used to hedge the net projectedexposure for each currency and the anticipated sales and purchases in U.S. dollars where required. The goal of this hedging program is to economicallyguarantee or lock-in the exchange rates on our foreign exchange exposures. No forward contracts were entered by the Company for the years ended December31, 2023 and 2022. The Company does not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedgeaccounting are accounted for as trading instruments. The Company has recorded foreign currency transaction losses of A$30,177 and A$115,515 for the years ended December 31, 2023 and 2022, respectively. Interest Rate Risk The majority of our investments are in cash and cash equivalents in Australian dollars. Our interest income is not materially affected by changes in the generallevel of U.S. and Australian interest rates. The primary objective of our investment activities is to preserve principal while at the same time maximizing theincome we receive without significantly increasing risk. Our investment portfolio is subject to interest rate risk but due to the short duration of our investmentportfolio, we believe an immediate 10% change in interest rates would not be material to our financial condition or results of operations. Inflation Our business is subject to the general risks of inflation. Our results of operations depend on our ability to anticipate and react to changes in the price of rawmaterials and other related costs over which we may have little control. Our inability to anticipate and respond effectively to an adverse change in the pricecould have a significant adverse effect on our results of operations. In the face of increasing costs, the Company strives to maintain its profit margins throughcost reduction programs, productivity improvements and periodic price increases. For the two most recent fiscal years, the impact of inflation and changingprices on our net sales, revenues, income and costs from continuing operations has not been material. F-8 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Universal Biosensors, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Universal Biosensors, Inc. and its subsidiaries (the “Company”) as of December 31, 2023and 2022, and the related consolidated statements of comprehensive income/(loss), of changes in stockholders’ equity and comprehensive income/(loss),and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, theconsolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and theresults of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States ofAmerica. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicablerules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due toerror or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of ouraudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on theeffectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error orfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis forour opinion. /s/ PricewaterhouseCoopersMelbourne, AustraliaFebruary 29, 2024 We have served as the Company's auditor since 2006 F-9 Universal Biosensors, Inc. Consolidated Balance Sheets December 31, 2023 2022 A$ A$ ASSETS Current assets: Cash and cash equivalents 10,240,429 25,977,703 Inventories 4,377,933 3,142,181 Accounts receivable 2,125,500 974,323 Prepayments 1,200,188 489,800 Restricted cash 35,000 527,148 Research and development tax incentive receivable 3,774,343 4,736,106 Other current assets 249,540 824,870 Total current assets 22,002,933 36,672,131 Non-current assets: Property, plant and equipment 32,304,310 31,090,787 Less accumulated depreciation (27,456,376) (26,507,419)Property, plant and equipment - net 4,847,934 4,583,368 Intangible assets 0 16,371,996 Less amortization of intangible assets 0 (5,357,211)Less impairment of intangible assets 0 (11,014,785)Intangible assets - net 0 0 Right-of-use asset - operating leases 2,662,885 4,422,303 Right-of-use asset - finance leases 49,074 58,421 Restricted cash 320,000 320,000 Other non-current assets 90,045 88,832 Total non-current assets 7,969,938 9,472,924 Total assets 29,972,871 46,145,055 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 1,240,902 268,074 Accrued expenses 2,056,929 5,888,380 Contingent consideration 0 2,214,022 Other liabilities 0 3,023,767 Contract liabilities 36,132 29,851 Lease liability - operating leases 825,475 755,125 Lease liability - finance leases 9,236 8,814 Employee entitlements liabilities 869,195 831,730 Short-term loan 911,082 65,768 Total current liabilities 5,948,951 13,085,531 Non-current liabilities: Asset retirement obligations 1,214,255 2,920,630 Employee entitlements liabilities 76,165 48,273 Lease liability - operating leases 3,179,294 3,943,517 Lease liability - finance leases 46,397 55,633 Total non-current liabilities 4,516,111 6,968,053 Total liabilities 10,465,062 20,053,584 Commitments and contingencies 0 0 Stockholders’ equity: Preferred stock, US$0.01 par value. Authorized 1,000,000 shares; issued & outstanding nil at December 31,2023 (nil at December 31, 2022). Common stock, US$0.0001 par value. Authorized 300,000,000 shares; issued& outstanding 212,369,435 shares at December 31, 2023 (211,844,435 at December 31, 2022) 21,237 21,184 Additional paid-in capital 119,239,087 119,040,784 Accumulated deficit (92,678,783) (65,824,231)Current year loss (6,741,564) (26,854,552)Accumulated other comprehensive loss (332,168) (291,714)Total stockholders’ equity 19,507,809 26,091,471 Total liabilities and stockholders’ equity 29,972,871 46,145,055 See accompanying Notes to the Consolidated Financial Statements. F-10 Universal Biosensors, Inc. Consolidated Statements of Comprehensive Income/(Loss) Year Ended December 31, 2023 2022 A$ A$ Revenue Revenue from products 5,636,492 3,379,402 Revenue from services 996,346 1,145,560 Total revenue 6,632,838 4,524,962 Operating costs and expenses Cost of goods sold 2,032,452 1,386,889 Cost of services 315,449 999,042 Total cost of goods sold and services 2,347,901 2,385,931 Gross profit 4,284,937 2,139,031 Other operating costs and expenses Product support 154,609 92,186 Depreciation and amortization 956,275 2,649,671 Impairment of definite-lived intangible assets - 11,014,785 Research and development 4,974,437 12,291,750 Selling, general and administrative 14,879,937 10,984,316 Total operating costs and expenses 20,965,258 37,032,708 Loss from operations (16,680,321) (34,893,677)Other income/(expense) Interest income 734,375 381,597 Interest expense (20,386) (18,151)Financing costs (156,999) (199,370)Research and development tax incentive income 3,495,930 4,757,741 Exchange loss (30,177) (115,515)Other income 5,916,014 181,986 Total other income 9,938,757 4,988,288 Net loss before tax (6,741,564) (29,905,389)Income tax benefit/(expense) 0 3,050,837 Net loss after tax (6,741,564) (26,854,552) Net loss per share Net loss per share - basic and diluted (0.03) (0.14)Average weighted number of shares - basic and diluted 212,369,435 198,724,910 Other comprehensive gain/(loss), net of tax: Foreign currency translation reserve (40,454) 31,574 Other comprehensive income/(loss) (40,454) 31,574 Comprehensive income/(loss) (6,782,018) (26,822,978) See accompanying Notes to the Consolidated Financial Statements. F-11 Universal Biosensors, Inc. Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss) Year Ended December 31, 2023 Ordinary shares Additional Accumulated Othercomprehensive Total stockholders’ Shares Amount paid-in capital deficit income/ (loss) equity A$ A$ A$ A$ A$ Balances at January 1, 2023 211,844,435 21,184 119,040,784 (92,678,783) (291,714) 26,091,471 Net loss 0 0 0 (6,741,564) 0 (6,741,564)Other comprehensive loss 0 0 0 0 (40,454) (40,454)Performance awards and exercise ofstock options issued to employees 525,000 53 (53) 0 0 0 Stock-based compensation expense 0 0 198,356 0 0 198,356 Balances at December 31, 2023 212,369,435 21,237 119,239,087 (99,420,347) (332,168) 19,507,809 Year Ended December 31, 2022 Ordinary shares Additional Accumulated Othercomprehensive Total stockholders’ Shares Amount paid-in capital deficit income/ (loss) equity 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 (26,854,552) 0 (26,854,552)Issuance of common stock at A$0.77per share, net of issuance costs 33,775,931 3,377 24,728,289 0 0 24,731,666 Other comprehensive income 0 0 0 0 31,574 31,574 Performance awards and exercise ofstock options issued to employees 240,000 24 43,876 0 0 43,900 Stock-based compensation expense 0 0 319,402 0 0 319,402 Capitalized stock-basedcompensation 0 0 211,652 0 0 211,652 Balances at December 31, 2022 211,844,435 21,184 119,040,784 (92,678,783) (291,714) 26,091,471 See accompanying Notes to the Consolidated Financial Statements. F-12 Universal Biosensors, Inc.Notes to Consolidated Financial Statements Consolidated Statements of Cash Flows Year Ended December 31, 2023 2022 A$ A$ Cash flows from operating activities: Net loss (6,741,564) (26,854,552)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 969,671 2,785,635 Impairment of definite-lived intangible assets 0 11,014,785 Stock-based compensation expense 198,356 319,402 Non-cash lease expense 57,814 160,321 Unrealized foreign exchange losses 28,046 159,175 Change in assets and liabilities: Other liabilities (5,739,912) 0 Inventories (1,235,752) (998,677)Accounts receivable (1,176,493) (472,844)Prepayments and other assets 310,100 (1,107,213)Other non-current assets (1,214) (50,410)Contract liabilities 31,598 (33,895)Employee entitlements 65,357 180,440 Accounts payable and accrued expenses (1,385,051) 195,680 Net cash used in operating activities (14,619,044) (14,702,153)Cash flows from investing activities: Purchases of property, plant and equipment (1,473,367) (1,565,144)Net cash used in investing activities (1,473,367) (1,565,144)Cash flows from financing activities: Proceeds from borrowings 1,056,059 1,002,404 Repayment of borrowings (1,100,504) (1,002,404)Proceeds from issuance of common stock, net of issuance costs (29,580) 24,972,897 Other (8,814) 38,379 Net cash (used in)/provided by financing activities (82,839) 25,011,276 Net decrease in cash, cash equivalents and restricted cash (16,175,250) 8,743,979 Cash, cash equivalents and restricted cash at beginning of period 26,824,851 18,099,219 Effect of exchange rate fluctuations on the balances of cash held in foreign currencies (54,172) (18,347)Cash, cash equivalents and restricted cash at end of period 10,595,429 26,824,851 See accompanying Notes to the Consolidated Financial Statements. F-13 Universal Biosensors, Inc.Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or“GAAP”). Unless otherwise noted, references in this Annual Report 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 whollyowned US operating subsidiary, Universal Biosensors LLC (“UBS LLC”) and UBS’ wholly owned Canadian operating subsidiary, Hemostasis ReferenceLaboratory Inc. (“HRL”) and wholly owned Dutch operating subsidiary, Universal Biosensors B.V. (“UBS BV”). Unless otherwise noted, all references in this Form10-K to “$”, “A$” or “dollars” and dollar amounts are references to Australian dollars. References to “US$”, “CAD$” and “€” are references to United Statesdollars, Canadian dollars and Euros respectively. The consolidated financial statements have been prepared assuming the Company will continue as a going concern. We rely largely on our existing cash andcash equivalents balance and operating cash flow to provide for the working capital needs of our operations. We believe we have sufficient cash and cashequivalents to fund our operations for at least the next twelve months from the date of issuance. However, in the event our financing needs for the foreseeablefuture are not able to be met by our existing cash and cash equivalents balance and operating cash flow, we would seek to raise funds through public or privateequity offerings, debt financings, and through other means to meet the financing requirements or through reduction of costs. There is no assurance thatfunding would be available at acceptable terms, if at all. Unless otherwise stated, the accounting policies adopted are consistent with those of the previous year. Principles of Consolidation The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, UBS, UBS LLC, HRL and UBS BV. Allintercompany balances and transactions have been eliminated on consolidation. Use of Estimates The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating tothe reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and thereported 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, impairment of definite-lived intangible assets and stock-based compensation expenses. Actual results coulddiffer from those estimates. Recent Accounting Pronouncements The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on the Company'sfinancial 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 endedDecember 31, 2023. There were no new material accounting standards issued in 2023 that impacted the Company with the exception of the following: •In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information abouta reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors byproviding more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments in this ASU areeffective for annual periods beginning on January 1, 2025, and should be applied on a prospective basis with the option to apply the standardretrospectively. Early adoption is permitted. This ASU will have no impact on the Company's consolidated financial condition or results ofoperations. The Company is currently evaluating the impact to its income tax disclosures. •In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, which improves reportable segmentdisclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhanceinterim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide newsegment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of theamendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. For public businessentities, the amendments in this ASU are effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1,2025, and should be applied on a retrospective basis for all periods presented. For entities other than public business entities, the ASU is effectivefor annual periods beginning after December 15, 2025. This ASU will have no impact on the Company's consolidated financial condition or results ofoperations. The Company is currently evaluating the impact to its segment disclosures. 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 computedusing the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by adjusting the basic net lossper 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 whichthe entity operates (“the functional currency”). The functional currency of UBI and UBS is A$ for all years presented. The functional currencies of UBS LLC, HRLand UBS BV are US$, CAD$ and €, respectively, for all years presented. F-14 Universal Biosensors, Inc.Notes to Consolidated Financial Statements The consolidated 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 exchangegains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognized in the consolidated 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 reportingcurrency 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 ofthe 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 OtherComprehensive 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 otheramounts 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 activeor are directly or indirectly observable (Level 2 inputs). ●Unobservable inputs that reflect estimates and assumptions (Level 3 inputs). Concentration of Credit Risk and Other Risks and Uncertainties Cash, cash equivalents, restricted cash and accounts receivable consist of financial instruments that potentially subject the Company to concentration ofcredit risk to the extent of the amount recorded on the consolidated balance sheets. The Company’s cash, cash equivalents and restricted cash are primarilyinvested 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 equivalentsand restricted cash to the extent of the amount recorded on the consolidated balance sheets. The Company has not experienced any losses on its deposits ofcash, 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 cashequivalents, the carrying amount approximates fair value due to the short maturity of those instruments. The Company maintains cash and restricted cash, which includes collateral for facilities. Inventory Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less theestimated costs of completion and estimated costs necessary to dispose. Inventories are principally determined under the average cost method whichapproximates cost. Cost comprises direct materials, direct labour and an appropriate portion of variable and fixed overhead expenditure, the latter beingallocated on the basis of normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts. The Companyrecognizes inventory on the consolidated balance sheets when they have concluded that the substantial risks and rewards of ownership, as well as the controlof 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 ofprobable credit losses in the existing accounts receivable. The allowance is determined based on a review of individual accounts for collectability, generallyfocusing on those accounts that are past due. The expense to adjust the allowance for credit losses, if any, is recorded within selling, general andadministrative expenses in the consolidated statements of comprehensive income/(loss). Account balances are charged against the allowance when it isprobable the receivable will not be recovered. F-15 Universal Biosensors, Inc.Notes to Consolidated Financial Statements 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’sprepayments are primarily represented by insurance premiums paid annually in advance. Other Current Assets The Company’s other current assets are primarily represented by sundry receivables. Property, Plant and Equipment Property, plant and equipment are recorded at acquisition cost, less accumulated depreciation. Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life ofmachinery and equipment is three to ten years. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease termor 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 normalservices and do not include items of a capital nature. Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property, plant and equipment and definite-lived intangible assets for impairment whenever events orchanges in circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss is recognized when theundiscounted future cash flows expected to result from the use of the asset is less than the carrying amount of the asset. Accordingly, we recognise animpairment loss based on the excess of the carrying value amount over the fair value of the asset. Australian Goods and Services Tax, Canadian Harmonized Sales Tax, US Sales Tax and European Value Added Tax, collectively “Sales Tax” Revenues, expenses and assets are recognized net of the amount of associated Sales Tax, unless the Sales Tax incurred is not recoverable from the taxationauthority. 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 ofthe amount of Sales Tax receivable or payable. The net amount of Sales Tax recoverable from, or payable to, the taxation authority is included with othercurrent assets or accrued expenses in the consolidated balance sheets dependent on whether the balance owed to the taxation authorities is in a netreceivable or payable position. Leases At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease,the Company evaluates whether it should be classified as an operating or a finance lease. Upon modification of the contract, the Company will reassess todetermine 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 timeperiod 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 andnon-lease components of contracts. Lease components provide the Company with the right to use an identified asset, which consist of the Company’s realestate 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 borrowingrate based on the information available at the lease commencement date in determining the present value of future lease payments. For certain leases withoriginal 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 balance sheets. F-16 Universal Biosensors, Inc.Notes to Consolidated Financial Statements 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 bythe 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 balance sheets. The Company evaluates the carrying value of ROU assets if there areindicators of potential impairment and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value ofthe 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 itsconsolidated 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 liabilitycalculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred. Asset Retirement Obligations Asset retirement obligations are legal obligations associated with the retirement and removal of long-lived assets. ASC 410 – Asset Retirement andEnvironmental Obligations requires entities to record the fair value of a liability for an asset retirement obligation when it is incurred. When the liability is initiallyrecorded, the Company capitalizes the cost by increasing the carrying amounts of the related property, plant and equipment. Over time, the liability increases forthe change in its present value, while the capitalized cost depreciates over the useful life of the asset. The Company derecognizes ARO liabilities when therelated 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 thepremises. Revenue Recognition The Group recognizes revenue predominantly from the sale of analyzers and test strips and the provision of laboratory testing services based on the provisionsof 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 termsCoagulation testingproducts (“Xprecia”) Our point-of-care coagulation testing products use electrochemical cell technology to measure Prothrombin Time (PT/INR), a testused 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 theproducts to its customer. The point of transfer of control of the products is dictated by individual terms contained within a customeragreement, as are the payment terms. The transaction price is fixed. Laboratory testingservices 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 thecustomer. In some cases, the performance obligations will be satisfied as predetermined milestones have been achieved by theCompany. Wine testing products(“Sentia”) Our Sentia wine analyzer is used to measure Free SO₂, Malic Acid, Glucose, Fructose, Total Sugar, Acetic Acid and Titratable Aciditylevels in wine. The performance obligation for the sale of this product is satisfied at a point-in-time when the Company transfers control of theproducts to its customer. The point of transfer of control of the products is dictated by the individual terms contained within acustomer agreement, as are the individual payment terms. The transaction price is fixed. Veterinary diabetesproduct (“Petrackr”) Our veterinary blood glucose product, Petrackr, is a blood glucose monitoring product for dogs and cats with diabetes. The performance obligation for the sale of this product is satisfied at a point-in-time when the Company transfers control of theproducts to its customer. The point of transfer of control of the products is dictated by the individual terms contained within acustomer agreement, as are the individual payment terms. The transaction price is fixed. F-17 Universal Biosensors, Inc.Notes to Consolidated Financial Statements See Note 12 to the Consolidated 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 restrictedcash in interest-bearing accounts. Research and Development Tax Incentive Income Research and development tax incentive income is recognized when there is reasonable assurance that the income will be received, the relevant expenditurehas 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 issupported 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 anumber of conditions, an entity involved in eligible research and development (“R&D”) activities may claim research and development tax incentive income asfollows: (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 carryingon 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-operatingincome 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 taxincentive regime described above. At each period end management estimates the refundable tax offset available to the Company based on availableinformation 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$3,495,930 and A$4,757,741 for the 2023 and 2022 financial year, respectivelyas the aggregated turnover of the Company did not exceed A$20,000,000. 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 employeebenefits, costs associated with clinical trial and preclinical development, regulatory activities, research-related overhead expenses, costs associated with themanufacture of clinical trial material, costs associated with developing a commercial manufacturing process, costs for consultants and related contractresearch, 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 conductcertain testing activities on behalf of the Company. Depending on the timing of payments to the service providers and the level of service provided, theCompany 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-linebasis 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 andour statutory tax rate in the jurisdiction in which we will receive a deduction. Differences between the deferred tax assets recognized for financial reportingpurposes 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 exceedsthe 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 taxasset. F-18 Universal Biosensors, Inc.Notes to Consolidated Financial Statements Employee Benefit Costs The Company contributes a portion of each employee’s salary to standard defined contribution superannuation funds on behalf of all eligible UBS employees inline with legislative requirements. The contribution rate increased from 9.50% to 10.0% for the period commencing July 1, 2021 and increased to 10.5% on July1, 2022 and 11.0% on July 1, 2023. Superannuation is an Australian compulsory savings program plan for retirement whereby employers are required to pay aportion of an employee’s remuneration to an approved superannuation fund that the employee is typically not able to access until they have reached thestatutory retirement age. Whilst the Company has a third-party default superannuation fund, it permits UBS employees to choose an approved and registeredsuperannuation fund into which the contributions are paid. Contributions are charged to the consolidated statements of comprehensive income/(loss) as theexpense is incurred. Registered Retirement Savings Plan and Deferred Sharing Profit Plan The Company provides eligible HRL employees with a retirement plan. The retirement plan includes a Registered Retirement Savings Plan (“RRSP”) andDeferred Profit Sharing Plan (“DPSP”). The RRSP is voluntary and the employee contributions are matched by the Company up to a maximum of 5% based ontheir 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 DPSPcontributions 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 intowhich 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 toa maximum of 10% of their salary. Employee Entitlements Liabilities Employee entitlements to annual leave and long service leave are recognized when they accrue to employees. A provision is made for the estimated liability forannual leave and long-service leave as a result of services rendered by employees up to the balance sheet date. Income Taxes We are subject to income taxes in Australia, Canada, the Netherlands and the United States. The Company applies ASC 740 - Income Taxes which establishesfinancial 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 carryingamounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities aremeasured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered orsettled. 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 valuationallowance. 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 ofthe 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 minimumtax for all U.S. shareholders of controlled foreign corporations (“CFCs”) and applies broadly to certain income generated by a CFC. The Company can make anaccounting 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 expectedto reverse as GILTI in future years. The Company has elected to treat GILTI as a period cost. F-19 Universal Biosensors, Inc.Notes to Consolidated Financial Statements 2. Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to thetotal of the same such amounts shown in the consolidated statements of cash flows. December 31, 2023 2022 A$ A$ Cash and cash equivalents 10,240,429 25,977,703 Restricted cash – current assets 35,000 527,148 Restricted cash – non-current assets 320,000 320,000 10,595,429 26,824,851 Restricted cash maintained by the Company in the form of term deposits is as follows: December 31, 2023 2022 A$ A$ Performance guarantee (a) - current assets 0 527,148 Collateral for facilities (b) - current assets 35,000 0 Collateral for facilities (b) - non-current assets 320,000 320,000 355,000 847,148 (a)The performance guarantee represented letter of credit issued in favour of Siemens pursuant to the 2019 Siemens Agreements expired on March2023. (b)Collateral for facilities represents letter of credit for A$35,000 issued in favour of American Express Australia Ltd (current), bank guarantee ofA$250,000 for commercial lease of UBS’ premises (non-current) and security deposit on Company’s credit cards of A$70,000 (non-current). Interest earned on the restricted cash for years ended December 31, 2023 and 2022 was A$14,347 and A$27,534 respectively. 3. Inventories December 31, 2023 2022 A$ A$ Raw materials 261,753 1,758,073 Work in progress 273,965 646,161 Finished goods 3,842,215 737,947 4,377,933 3,142,181 4. Receivables December 31, 2023 2022 A$ A$ Accounts receivable 2,125,500 974,323 Allowance for credit losses 0 0 2,125,500 974,323 5. Property, Plant and Equipment December 31, 2023 2022 A$ A$ Plant and equipment 22,962,369 21,543,134 Leasehold improvements 9,341,941 9,341,612 Capital work in process 0 206,041 32,304,310 31,090,787 Accumulated depreciation (27,456,376) (26,507,419)Property, plant & equipment - net 4,847,934 4,583,368 F-20 Universal Biosensors, Inc.Notes to Consolidated Financial Statements 6. Leases The Company’s lease portfolio consists primarily of operating leases for office space and equipment with contractual terms expiring from December 2025 toFebruary 2032. Lease contracts may include one or more renewal options that allow the Company to extend the lease term. The exercise of lease options isgenerally at the discretion of the Company. None of the Company’s leases contain residual value guarantees, substantial restrictions, or covenants. TheCompany’s leases are substantially within Australia and Canada. December 31, 2023 2022 A$ A$ Operating lease right-of-use assets: Non-current 2,662,885 4,422,303 Operating lease liabilities: Current 825,475 755,125 Non-current 3,179,294 3,943,517 Weighted average remaining lease terms (in years) 6.3 6.9 Weighted average discount rate 4.8% 4.8% The components of lease income/expense were as follows: Year Ended December 31, 2023 2022 A$ A$ Fixed payment operating lease expense 805,481 965,224 Short-term lease expense 0 3,262 Sub-lease income 133,900 137,219 The sublease income is deemed an operating lease. The components of the fixed payment operating and short-term lease expense as classified in the consolidated statements of comprehensive income/(loss)are as follows: Year Ended December 31, 2023 2022 A$ A$ Cost of goods sold 0 107,140 Cost of services 39,601 147,558 Research and development 138,340 273,823 Selling, general and administrative 627,540 436,703 805,481 965,224 Supplemental cash flow information related to the Company’s leases was as follows: Year Ended December 31, 2023 2022 A$ A$ Operating cash outflows from operating leasses 979,387 831,685 Supplemental non-cash information related to the Company’s leases was as follows: Year Ended December 31, 2023 2022 A$ A$ Right-of-use assets obtained in exchange for lease liabilities 28,353 3,023,907 Right-of-use asset modifications 0 0 F-21 Universal Biosensors, Inc.Notes to Consolidated Financial Statements Future lease payments are as follows: December 31, 2023 A$ 1 year 488,262 2 years 998,418 3 years 1,022,251 4 years 407,413 5 years 416,427 Thereafter 1,807,808 Total future lease payments 5,140,579 Less: imputed interest (1,135,810)Total operating lease liabilities 4,004,769 Current 825,475 Non-current 3,179,294 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, 2025with 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 Companyis not reasonably certain that they will be exercised. 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 anoption to renew the lease for a further term. On October 22, 2021, UBS entered into a lease arrangement to install solar panels and inverters ("panels"). The lease commenced in January 2022 uponinstallation of the panels. The panels were installed at the Company’s 1 Corporate Avenue premises. The lease has a term of seven years and an option to buyat the end of the term. As of December 31, 2023, the Company has not entered into any operating or finance lease agreements that have not yet commenced. 7. Income Taxes Provision for Income Taxes A reconciliation of the (benefit)/provision for income taxes is as follows: Year Ended December 31, 2023 2022 A$ % A$ % Loss before income taxes (6,741,564) (29,905,389) Computed by applying income tax rate of home jurisdiction (1,685,391) 25 (7,476,347) 25 Effect of tax rates in foreign jurisdictions 300,584 (4) 200,505 (1)Research and development tax incentive 1,225,577 (18) 1,257,265 (4)Disallowed expenses/(income): Stock-based compensation 49,575 (1) 132,763 (0)Amortization 0 0 2,344,621 (8)Other 735,257 (11) 150,633 (1)Change in valuation allowance (625,602) 9 339,723 (1)Income tax expense/(benefit) 0 (0) (3,050,837) 10 The components of our loss before income taxes as either domestic or foreign is as follows: Year Ended December 31, 2023 2022 A$ A$ Foreign (4,204,348) (3,653,169)Domestic (2,537,216) (26,252,220) (6,741,564) (29,905,389) F-22 Universal Biosensors, Inc.Notes to Consolidated Financial Statements Deferred Tax Assets and Liabilities Year Ended December 31, 2023 2022 A$ A$ Deferred tax assets: Operating loss carry forwards 7,645,509 6,055,726 Depreciation and amortization 1,157,004 1,115,812 Asset retirement obligations 303,564 730,157 Employee entitlements 224,890 206,747 Accruals 268,214 2,056,550 Decline in value of patents 835,173 875,496 Unrealized exchange loss 116,259 34,875 Total deferred tax assets 10,550,613 11,075,363 Valuation allowance for deferred tax assets (10,403,122) (11,028,724)Net deferred tax asset 147,491 46,639 Deferred tax liabilities: Other 147,491 46,639 Total deferred tax liabilities 147,491 46,639 Net deferred tax liabilities 0 0 Significant components of deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting and tax purposes. A valuation allowance has been established, as realization of such assets is not more likely than not. At December 31, 2023 the Company has A$30,582,036 (A$24,222,902 as at December 31, 2022) of accumulated tax losses available for carry forward againstfuture earnings, which under Australian tax laws do not expire but may not be available under certain circumstances. The Company also has A$3,374,776(A$3,374,776 at December 31, 2022) of non-refundable R&D tax offset as at December 31, 2023. The R&D tax offset is a non-refundable tax offset, whichassists to reduce a company’s tax liability. Once the liability has been reduced to zero, any excess offset may be carried forward into future income years. A reconciliation of the valuation and qualifying accounts is as follows: Balance at Beginningof Period Additions Deductions Balance at endof Period A$ A$ A$ A$ Year ended December 31, 2023 Deferred income tax valuation allowance 11,028,724 (625,602) 0 10,403,122 Year ended December 31, 2022 Deferred income tax valuation allowance 10,689,001 339,723 0 11,028,724 8. Accrued Expenses Accrued expenses consist of the following: December 31, 2023 2022 A$ A$ Legal, tax and accounting fees 443,833 527,523 Salary and related costs 663,978 387,047 Research and development costs 319,193 3,586,251 Patent fees 47,484 421,759 Inventory purchases 102,458 345,563 Sample collection site costs 148,741 135,373 Calibration costs 51,247 3,897 Public company costs 40,204 8,416 Freight 36,977 66,405 Royalties 35,775 0 Travel 32,329 2,953 Product design costs 22,420 19,724 Consultants 19,873 38,396 Warehouse expenses 17,554 5,664 Other 74,863 339,409 2,056,929 5,888,380 F-23 Universal Biosensors, Inc.Notes to Consolidated Financial Statements 9. Contingent Consideration Pursuant to the Siemens Acquisition and the agreement dated September 2019, the Company had agreed to pay US$1,500,000 (equivalent to A$2,214,022) toSiemens within five days of Siemens achieving a pre-defined milestone. In an agreement dated June 2023 between Siemens and the Company, the Companyis no longer required to pay this amount and therefore have measured the fair value of this liability as nil. This amount has been recognized as Other Income inthe consolidated condensed statements of comprehensive income/(loss). See note 13 for further details. 10. Other Liabilities Other liabilities represent a marketing support payment due to a third party and is payable in US dollars once supporting documentation has been provided tothe Company. This amount has been long outstanding and was derecognized as at June 30, 2023 as supporting documentation has not been provided to theCompany. This amount has been recognized as Other Income in the consolidated condensed statements of comprehensive income/(loss). See note 13 forfurther details. 11. Short-Term Loan The unsecured loan was a government guaranteed loan called Canada Emergency Business Account (CEBA) of CAD$60,000 to help eligible businesses withoperating costs. CAD$40,000 was received by the Company in 2020 and CAD$20,000 in 2021. This was among the business support measures introduced inthe 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, 2023;●if the Company chooses to repay at least CAD$40,000 of the loan by December 31, 2023, the remaining balance will be forgiven;●if the loan is not repaid by the above mentioned date, it will be converted into a 2-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 2-year term, the entire balance of the loan is due for repayment by December 31, 2025. In December 2023, the Company repaid CDN$40,000 of the loan and pursuant to the terms of the loan, the remaining CDN$20,000 has been forgiven. In January 2023, UBS entered into an arrangement with BOQF Cashflow Finance Pty Ltd to fund the Group’s 2023 insurance premium. The total amountfinanced was A$1,056,059 at inception and the short-term borrowing was fully repaid in September 2023. Interest was charged at an effective annual interestrate of 1.99%. The short-term borrowing was secured by proceeds of or payable under any insurance including proceeds or refunds from the cancellation ortermination of any insurance. In December 2023 the Company entered into a short-term loan facility to finance its 2024 Insurance Premium. The total amount available and drawn downunder the facility is $911,082. The facility is repayable in nine monthly instalments which commenced in January 2024 and has an effective annual interest rateof 1.99%. The short-term borrowing is secured by proceeds of or payable under any insurance including proceeds or refunds from the cancellation ortermination of any insurance. 12. Revenue Disaggregation of Revenue In the following table, revenue is disaggregated by major product and service lines and timing of revenue recognition. Year Ended December 31, 2023 2022 A$ A$ Major product/service lines Coagulation testing products 2,607,506 2,366,331 Laboratory testing services 996,346 1,145,560 Wine testing products 2,528,666 1,013,071 Veterinary diabetes products 500,320 0 6,632,838 4,524,962 Timing of revenue recognition Products and services transferred at a point in time 6,632,838 4,524,962 Contract Balances The following table provides information about receivables and contract liabilities from contracts with customers. Year Ended December 31, 2023 2022 A$ A$ Receivables 2,125,500 974,323 Contract liabilities 36,132 29,851 The Company’s contract liabilities represent the Company’s obligation to transfer products to customers for which the Company has received considerationfrom customers, but the transfer has not yet been completed. F-24 Universal Biosensors, Inc.Notes to Consolidated Financial Statements Significant changes in the contract assets and the contract liabilities balances during the period are as follows: Year Ended December 31, 2023 2022 A$ A$ Contract Liabilities - current Opening balance 29,851 38,431 Closing balance 36,132 29,851 Net increase/(decrease) 6,281 (8,580) The Company expects all of the Company’s contract liabilities to be realized by December 31, 2024. 13. Other Income Other income is recognized when there is reasonable assurance that the income will be received and the consideration can be reliably measured. Other income is as follows for the relevant periods: Year Ended December 31, 2023 2022 A$ A$ Federal and state government subsidies 20,000 42,713 Rental income 153,904 137,219 Other income 2,198 2,054 Sundry income 5,739,912 0 5,916,014 181,986 Sundry income represents the following: ●Previously accrued marketing support payment of A$2,896,764 derecognized ●Previously accrued license fee payable to Siemens of A$2,214,022 derecognized ●A$629,126 as a result of change in estimates in ARO liability ARO reflects estimates of future costs directly attributable to remediating the liability, inflation, assumptions of risks associated with the future cash outflows,and the applicable risk-free interest rates for discounting future cash outflows. Changes in these factors can result in a change to the ARO recognized by theCompany. As a result of a change in estimates of future costs, the Company’s ARO liability decreased to A$1,182,218 as at September 1, 2023 resulting inA$629,126 recorded as Other Income in the consolidated condensed statements of comprehensive income/(loss). 14. Equity Incentive Schemes In 2004, the Company adopted an employee option plan which was subsequently replaced in 2021 by the Equity Incentive Plan (“the Equity Incentive Plan”) tocater for awards including options, performance rights, CDIs and restricted CDIs. There were no securities awarded during the 2023 financial year pursuant to the Equity Incentive Plan. During the year ended December 31, 2022, the Companyissued shares as a short-term incentive plan to select employees under the Equity Incentive Plan. All stock options and performance rights granted under theEquity Incentive Plan require eligible recipients to complete a requisite service period. During the year ended December 31, 2022, the Company issued to Viburnum Funds Pty Ltd (“Viburnum”) in connection with the Entitlement Offer, unlistedoptions to purchase 3,840,000 ordinary shares in two tranches. Refer to Note 18 for more details. At December 31, 2023, total stock compensation expense recognized in the consolidated statements of comprehensive income/(loss) was A$198,356 (2022:A$319,402). A$142,130 of the stock compensation expense as of December 31, 2023 has been recorded in selling, general and administrative expenses andthe balance in research and development expenses. (a) Stock Options Stock options (“options”) may be granted pursuant to the Equity Incentive Plan to any person considered by the board to be employed by the Group on apermanent basis (whether full time, part time or on a long-term casual basis). Each option gives the holder the right to subscribe for one share of commonstock. The total number of options that may be issued under the Equity Incentive Plan is such maximum amount permitted by law and the Listing Rules of theASX. The exercise price and any exercise conditions are determined by the board at the time of grant of the options. Any exercise conditions must be satisfiedbefore the options vest and become capable of exercise. The options lapse on such date determined by the board at the time of grant or earlier in accordancewith the Equity Incentive Plan. Options granted to date have had a term up to ten years and generally vest in tranches up to three years. F-25 Universal Biosensors, Inc.Notes to Consolidated Financial Statements An option holder is not permitted to participate in a bonus issue or new issue of securities in respect of an option held prior to the issue of shares to the optionholder pursuant to the exercise of an option. If the Company changes the number of issued shares through or as a result of any consolidation, subdivision, orsimilar reconstruction of the issued capital of the Company, the total number of options and the exercise price of the options (as applicable) will likewise beadjusted. The terms of the awards include a variety of market, performance and service conditions. The number of options granted pursuant to the Equity Incentive Plan in 2023 and 2022 were nil. The number of options granted to parties other than those granted pursuant to the Equity Incentive Plan in 2023 and 2022 were nil and 3,840,000, respectively.See Note 18 to the Consolidated Financial Statements for details on the options granted to Viburnum. Stock option activity during the current period is as follows: Number of options Weighted averageexercise price A$ Balance at December 31, 2022 12,406,300 0.49 Lapsed (756,000) 0.49 Balance at December 31, 2023 11,650,300 0.49 At December 31, 2023, the number of options vested and exercisable was 11,650,300 (2022: 12,406,300). At December 31, 2023 and 2022, total stockcompensation expense for options recognized in the consolidated statements of comprehensive income/(loss) was nil. The following table represents information relating to stock options outstanding under the plans as of December 31, 2023: Exercise price A$ Options Weighted averageremaining life in years Options exercisableshares 0.50 216,300 0 216,300 0.20 2,364,666 0 2,364,666 0.25 2,364,667 1 2,364,667 0.30 2,364,667 1 2,364,667 0.30 500,000 1 500,000 0.92 1,920,000 1 1,920,000 1.00 1,920,000 1 1,920,000 11,650,300 11,650,300 The table below sets forth the number of employee stock options exercised and the number of shares issued in the period from January 1, 2022. We issuedthese shares in reliance upon exemptions from registration under Regulation S under the Securities Act of 1933, as amended. Period ending Number of optionsexercised andcorresponding number ofshares issued Weighted averageexercise price A$ Proceeds received A$ 2023 0 0.00 0 2022 90,000 0.49 43,900 As of December 31, 2023, there was no unrecognized compensation expense (2022: nil). (b) Restricted Shares The Equity Incentive Plan permits our Board to grant shares of our common stock to our employees and directors (although our Board has determined not toissue equity to non-executive directors). The number of shares able to be granted is limited to the amount permitted to be granted at law, the ASX Listing Rulesand by the limits on our authorized share capital in our certificate of incorporation. All our employees are eligible for shares under the Employee Share Plan. TheCompany has in the past issued A$1,000 worth of restricted shares of common stock to employees of the Company, but no more frequently than annually. Therestricted shares have the same terms of issue as our existing shares of common stock but are not able to be traded until the earlier of three years from thedate on which the shares are issued or the date the relevant employee ceases to be an employee of the Company or any of its associated group of companies.There were no restricted shares issued by the Company during 2023 and 2022. (c) Equity Equity may be granted pursuant to the Equity Incentive Plan to any person considered by the board to be employed by the Group on a permanent basis (whetherfull time, part time or on a long-term casual basis). Each performance right issued gives the holder the right to subscribe for one share of common stock. Thetotal number of performance rights that may be issued under the Equity Incentive Plan is such maximum amount permitted by law and the Listing Rules of theASX. F-26 Universal Biosensors, Inc.Notes to Consolidated Financial Statements Such equity granted does not involve the payment of an exercise price. Equity generally vests in tranches up to four years. The terms of the awards include a variety of market, performance and service conditions. The number of performance rights granted in 2023 was 525,000(2022: up to 1,555,555). In accordance with ASC 718, the fair value of the rights granted were estimated on the date of each grant using the Trinomial Lattice model. The keyassumptions for these grants were: Oct-22 Nov-22 Exercise price A$ 0 0 Share price at grant date A$ 0.25 0.25 Volatility 66% 67%Maximum life (years) 2.47 1.19 Risk-free interest rate 3.19% 3.16%Fair value A$ 0.25 0.25 Each of the inputs to the Trinomial Lattice model is discussed below. Share Price and Exercise Price at Valuation Date The value of the performance rights granted has been determined either using the closing price of our common stock trading in the form of CDIs on ASX at thetime of grant of the performance rights. The ASX is the only exchange upon which our securities are quoted. Volatility We applied volatility having regard to the historical price change of our shares in the form of CDIs available from the ASX. Time to Expiry All performance rights granted under our Equity Incentive Plan have a maximum four-year term and are non-transferable. Risk Free Rate The risk free rate which we applied is equivalent to the yield on an Australian government bond with a time to expiry approximately equal to the expected time toexpiry on the options being valued. Performance rights activity during the current period is as follows: Number of rights Weighted averageexercise price A$ Balance at December 31, 2022 8,830,000 0.00 Issued as common stock (525,000) 0.00 Lapsed (805,000) 0.00 Balance at December 31, 2023 7,500,000 0.00 At December 31, 2022, there were 525,000 performance rights which vested and these performance rights were issued as common stock in January 2023.805,000 performance rights granted in 2022 lapsed as the Company did not achieve the predetermined market and non-market conditions in 2023. AtDecember 31, 2023, total stock compensation expense for performance rights recognized in the consolidated statements of comprehensive income/(loss)was A$198,356 (2022: A$319,402). The following table represents information relating to the maximum quantity of performance rights outstanding under the plans as of December 31, 2023: Exercise price A$ Rights Weighted averageremaining life in years Rights exercisable shares 0 7,500,000 1 0 As of December 31, 2023, there was unrecognized compensation expense of up to A$5,158,773 (2022: A$5,357, 072). The issuance of the equity under theEquity Incentive Plan is subject to the Company achieving predetermined market and non-market conditions. In the event that the predetermined market andnon-market conditions are met, the unrecognized compensation expense as at December 31, 2023 would be recognized. F-27 Universal Biosensors, Inc.Notes to Consolidated Financial Statements 15. Total Comprehensive Income/(Loss) The Company follows ASC 220 – Comprehensive Income. Comprehensive income/(loss) is defined as the total change in shareholders’ equity during theperiod other than from transactions with shareholders and for the Company, includes net income/(loss). The tax effect allocated to each component of other comprehensive income/(loss) is as follows: Before-Tax Amount Tax (Expense)/ Benefit Net-of-Tax Amount A$ A$ A$ Year Ended December 31, 2023 Foreign currency translation reserve (40,454) 0 (40,454)Other comprehensive loss (40,454) 0 (40,454) Year Ended December 31, 2022 Foreign currency translation reserve 31,574 0 31,574 Other comprehensive gain 31,574 0 31,574 16. Stockholders’ Equity - Common Stock Holders of common stock are generally entitled to one vote per share held on all matters submitted to a vote of the holders of common stock. At any meeting ofthe shareholders, the presence, in person or by proxy, of the majority of the outstanding stock entitled to vote shall constitute a quorum. Except where a greaterpercentage is required by the Company’s amended and restated certificate of incorporation or by-laws, the affirmative vote of the holders of a majority of theshares of common stock then represented at the meeting and entitled to vote at the meeting shall be sufficient to pass a resolution. Holders of common stockare not entitled to cumulative voting rights with respect to the election of directors, and the common stock does not have pre-emptive rights. Trading in our shares of common stock on ASX is undertaken using CHESS Depositary Interests (“CDIs”). Each CDI represents beneficial ownership in oneunderlying share. Legal title to the shares underlying CDIs is held by CHESS Depositary Nominees Pty Ltd (“CDN”), a wholly owned subsidiary of ASX. Holders of CDIs have the same economic benefits of holding the shares, such as dividends (if any), bonus issues or rights issues as though they were holdersof the legal title. Holders of CDIs are not permitted to vote but are entitled to direct CDN how to vote. Subject to Delaware General Corporation Law, dividendsmay be declared by the Board and holders of common stock may be entitled to participate in such dividends from time to time. 17. Net Loss per Share The following table shows the computation of basic and diluted loss per share for 2023 and 2022: Year Ended December 31, 2023 2022 A$ A$ Numerator: Net loss (6,741,564) (26,854,552)Denominator: Weighted-average basic and diluted shares 212,369,435 198,724,910 Basic and diluted loss per share (0.03) (0.14) The number of shares not included in the calculation of basic net loss per ordinary share because the impact would be anti-dilutive were 4,729,333 and7,629,000 for the years ended December 31, 2023 and 2022, respectively. Basic and diluted net loss per share was computed by dividing the net loss applicable to common stock by the weighted-average number of common stockoutstanding during the period. 18. Related Party Transactions Details of related party transactions material to the operations of the Group other than compensation arrangements, expense allowances and other similaritems in the ordinary course of business, are set out below: Mr. Coleman is a Non-Executive Director of the Company and an Executive Chairman and Associate of Viburnum Funds Pty Ltd (“Viburnum”). Viburnum, as aninvestment manager for its associated funds, holds a beneficial interest and voting power over approximately 26% of UBI’s shares. F-28 Universal Biosensors, Inc.Notes to Consolidated Financial Statements On April 20, 2022, the Company announced a fully underwritten non-renounceable rights issue of new CHESS depositary interests over fully paid ordinaryshares in UBI (“New CDIs”) to raise approximately A$20.00 million (“Entitlement Offer”) at a ratio of 1 New CDI for every 6.85 existing CDIs held at the recorddate, being April 27, 2022. In connection with the Entitlement Offer, on April 19, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Viburnum(the “Underwriter”). Pursuant to the terms of the Underwriting Agreement, the Underwriter agreed to take up its full entitlement under the Entitlement Offer andfully underwrite the Entitlement Offer, which meant that the Underwriter agreed to subscribe for or procure others to subscribe for all securities (if any) notsubscribed for by the Company’s eligible securityholders under the Entitlement Offer. Following the close of the Entitlement Offer, 25.9 million New CDIs wereissued to Viburnum on May 27, 2022, which raised approximately A$19.94 million. 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 purchaseup to 3,840,000 ordinary shares, in two tranches, as its underwriting fee (the “Underwriter Options”) in lieu of cash compensation. The Underwriter Optionsvested upon issue on May 27, 2022 and have an expiry date of 3 years from their date of issue. The exercise price in respect of half of the Underwriter Optionsis an amount equal to 120% of the Offer Price, or A$0.92. The second half of the Underwriter Options have an exercise price equal to 130% of the Offer Price, orA$1.00. The stockholders of the Company approved the issuance of the Underwriter Options at a special meeting of stockholders held on May 23, 2022. In accordance with ASC 718, the fair value of the Underwriter Options granted were estimated at the date of the grant using the Trinomial Lattice mode. Thekey assumptions for the grant were: Tranche 1 Tranche 2Exercise Price ($A) 0.92 1.00 Share Price at Grant Date (A$) 0.44 0.44 Volatility 64% 64%Maximum Life (years) 3.00 3.00 Risk-Free Interest rate 2.78% 2.78%Fair Value (A$) 0.06 0.05 Each of the inputs to the Trinomial Lattice model is discussed below. Share Price and Exercise Price at Valuation Date The value of the options granted has been determined using the closing price of our common stock trading in the form of CDIs on ASX at the time of grant ofthe options. The ASX is the only exchange upon which our securities are quoted. Volatility We applied volatility having regard to the historical price change of our shares in the form of CDIs available from the ASX. Risk Free Rate The risk free rate which we applied is equivalent to the yield on an Australian government bond with a time to expiry approximately equal to the expected time toexpiry on the options being valued. On May 27, 2022, Viburnum acquired from a member of management, unlisted options to purchase up to 1,000,000 ordinary shares. The options fully vested onMarch 25, 2020, have an exercise price of $A0.20 and have an expiry date of March 24, 2024. There were no material related party transactions or balances as at December 31, 2023 other than as disclosed above. 19. 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 aliability has been incurred and the amount of the assessment can be reasonably estimated. These were nil as at December 31, 2023 and December 31, 2022.Purchase commitments are entered into with various parties to purchase products and services such as equipment, technology and consumables used in R&Dand commercial activities. Purchase commitments contracted for as at December 31, 2023 and December 31, 2022 were A$3,484,474 and A$6,581,876,respectively. Refer to Note 9 for details of the Company’s Contingent Consideration. 20. Segment Information We operate in one segment. We are a specialist biosensors Company focused on the development, manufacture and commercialization of a range of point ofuse devices for measuring different analytes across different industries. F-29 Universal Biosensors, Inc.Notes to Consolidated Financial Statements Our operations are in Australia, US, Europe and Canada. The chief operating decision maker of the Company is the Chief Executive Officer. The Company’s material long-lived assets are predominantly based in Australia. Our total income as disclosed below is attributed to countries based on location of customer. Location has been determined generally based on contractualarrangements. Total income includes revenue from products and services, interest income, research and development tax incentive income and other income(excluding sundry income) as disclosed in the Consolidated Statements of Comprehensive Income/(Loss). Year Ended December 31, 2023 2022 A$ A$ Australia (home country) 4,823,076 4,978,712 Americas 1,913,892 1,387,556 Europe 2,295,455 2,841,678 Other 2,006,822 150,082 11,039,245 9,358,028 % of total revenue from products and services derived from major customers: Year Ended December 31, 2023 2022 A$ A$ Siemens 0% 13%Other 100% 87% 21. Deed of cross guarantee Universal Biosensors, Inc. and its wholly owned subsidiary, Universal Biosensors Pty Ltd, are parties to a deed of cross guarantee under which each companyguarantees the debts of the other. By entering into the deed, the wholly-owned entity has been relieved from the requirements to prepare a financial report anddirectors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785. The above companies represent a “Closed Group” for the purposes of the Class Order, and as there are no other parties to the Deed of Cross Guarantee thatare controlled by Universal Biosensors, Inc., they also represent the “Extended Closed Group”. 22. Guarantees and Indemnifications The amended and restated certificate of incorporation and amended and restated bylaws of the Company provide that the Company will indemnify officers anddirectors and former officers and directors in certain circumstances, including for expenses, judgments, fines and settlement amounts incurred by them inconnection with their services as an officer or director of the Company or its subsidiaries, provided that such person acted in good faith and in a manner suchperson reasonably believed to be in the best interests of the Company, and, with respect to any criminal action or proceeding, the Company had reasonablecause to believe that such person’s conduct was not unlawful. In addition to the indemnities provided in the amended and restated certificate of incorporation and amended and restated bylaws, the Company has enteredinto indemnification agreements with certain of its officers and each of its directors. Subject to the relevant limitations imposed by applicable law, theindemnification agreements, among other things: ●indemnify the relevant officers and directors for certain expenses, judgments, fines and settlement amounts incurred by them in connection with theirservices as an officer or director of the Company or its subsidiaries; and ●require the Company to make a good faith determination whether or not it is practicable to maintain liability insurance for officers and directors or to ensurethe Company’s performance of its indemnification obligations under the agreements. The Company maintains directors’ and officers’ liability insurance providing for the indemnification of our directors and certain of our officers against certainliabilities incurred as a director or officer, including costs and expenses associated in defending legal proceedings. In accordance with the terms of theinsurance policy and commercial practice, the amount of the premium is not disclosed. F-30 Exhibit 21.0 List of subsidiaries Subsidiary of Universal Biosensors Inc.Jurisdiction of Incorporation Universal Biosensors Pty Ltd.Australia Hemostasis Reference Laboratory Inc.Canada Universal Biosensors B.V.The Netherlands Universal Biosensors LLCDelaware, U.S. Exhibit 31.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, John Sharman, certify that: 1.I have reviewed this report on Form 10-K of Universal Biosensors, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles; c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting. Date: February 29, 2024 /s/ John Sharman John Sharman Principal Executive Officer Universal Biosensors, Inc. Exhibit 31.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Salesh Balak, certify that: 1.I have reviewed this report on Form 10-K of Universal Biosensors, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles; c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectivenessof the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting. Date: February 29, 2024 /s/ Salesh Balak Salesh Balak Principal Financial Officer Universal Biosensors, Inc. Exhibit 32.0 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 * In connection with the annual report of Universal Biosensors, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2023, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company does hereby certify, pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of such officer’s knowledge: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Theundersigned have executed this Certificate as of February 29, 2024. /s/ John Sharman John Sharman Principal Executive Officer /s/ Salesh Balak Salesh Balak Principal Financial Officer *This certification is being furnished as required by Rule 13a-14(b) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), andSection 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act orotherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the SecuritiesAct of 1933, as amended, or the Exchange Act, except to the extent such certification is explicitly incorporated by reference in such filing. ASX Additional Information
Additional information required by Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at April 4, 2024.
The Company’s shares of common stock are traded on the Australian Securities Exchange in the form of CHESS Depositary
Interests, or CDIs.
Substantial holders
The following holders of CDIs have disclosed a substantial shareholder notice to ASX.
Name
Viburnum Funds Pty Ltd1
Richmond Hill Capital Pty Ltd2
Jencay Australia Investment Fund2
Hancock & Gore Ltd
Beneficial interests in shares of common stock
Number
60,638,601
22,616,067
17,364,455
16,666,667
Percentage
25.78
9.77
7.50
7.20
1 The relevant interests of the substantial holder are registered in the name of J P Morgan Nominees Australia Pty Limited and HSBC Custody
Nominees (Australia) Limited.
2 The relevant interests of the substantial holder are registered in the name of J P Morgan Nominees Australia Pty Limited.
Distribution of equity securities
As at April 4, 2024 there were:-
• 231,400,768 fully paid shares of common stock held by CDN on behalf of 2,485 individual holders of CDIs.Holders of CDIs
have the right to direct CDN, as the holder of record of the underlying shares of common stock represented by their CDIs,
how it should vote the underlying shares.
• 9,069,334 unquoted options over shares of common stock held by 4 individual optionholders. Optionholders do not carry
any right to vote until the options are exercised and shares (traded in the form of CDIs) are issued.
The following distribution schedule sets out the numbers of holders in each class of equity security.
Holding ranges
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number of holders
Beneficial interests in shares of
common stock traded as CDIs
Unquoted options over
shares of common stock
340
723
391
812
219
2,485
–
–
–
–
4
4
The number of investors holding less than a marketable parcel of 2,564 CDIs (based on a price of $0.195 per CDI at April 4, 2024)
was 710. They hold 845,723 CDIs in total.
Universal Biosensors, Inc. 83
Largest 20 holders of CDIs
Name of Holder
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HGL INVESTMENTS PTY LTD
H&G HIGH CONVICTION LIMITED
SANDHURST TRUSTEES LTD
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