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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Basis of presentation

Basis of presentation

 

The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“US GAAP” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, our unaudited condensed consolidated financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. Normal and recurring adjustments considered necessary for a fair statement of the results for the interim periods, in the opinion of the Company’s management, have been included. Operating results for the three months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2026. The accompanying unaudited condensed consolidated financial statements and related footnote disclosures should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the fiscal year ended June 30, 2025, which was filed with the SEC on August 15, 2025 (the “2025 Form 10-K”).

 

There have been no material changes to our significant accounting policies disclosed in Note 3 - Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our 2025 Form 10-K.

 
Principles of consolidation

Principles of consolidation

 

These unaudited condensed consolidated financial statements include the accounts of the Company, all wholly owned and majority-owned subsidiaries in which the Company has a controlling voting interest and, when applicable, variable interest entities in which the Company has a controlling financial interest or is the primary beneficiary. Investments in affiliates where the Company does not exert a controlling financial interest are not consolidated.

 

All significant inter-company transactions and balances have been eliminated upon consolidation.

 
Use of estimates

Use of estimates

 

The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management continually evaluates the estimates and judgments it uses. These estimates and judgments have been applied in a manner consistent with prior periods and there are no known trends, commitments, events or uncertainties that management believes will materially affect the methodology or assumptions utilized in making these estimates and judgments in these unaudited condensed consolidated financial statements.

 

Significant estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include the useful lives and impairments of long-lived assets, realizability of inventory, the allocation of transaction price among various performance obligations, fair value of warrants, realization of deferred tax assets and related uncertain tax positions, valuation of stock-based compensation awards and the allowance for credit losses. Actual results could materially differ from these judgments and estimates under different assumptions or conditions.

 
Segment Reporting

Segment Reporting

 

Accounting Standard Codification (“ASC”) 280, Segment Reporting, defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer performs the function that allocates resources and assesses performance, and thus serves as the Company’s CODM. The CODM reviews the assets, operating results, and financial metrics for four geographic segments:

 

● Americas consists of North America and South America
● United Kingdom consists of England, Scotland, Northern Ireland and Wales
● Asia Pacific (“APAC”) consists of Southeast Asia and Oceania
● Rest of World consists of all other countries

 

The CODM decides how to allocate resources based on a review of financial information presented on a consolidated basis accompanied by disaggregated information about revenue by product types, other income and long-lived assets for the purpose of allocating resources and evaluating financial performance for each geographic region. Accordingly, there are four reportable segments.

 
Accounts Receivable and Allowances for Credit Losses

Accounts Receivable and Allowances for Credit Losses

 

Accounts receivable primarily arise out of sales to customers. The allowance for credit losses is an amount equal to the estimated probable losses net of recoveries in accounts receivable using the incurred loss methodology. After considering current economic conditions and financial stability of its customers, an allowance for credit losses is maintained at a level which management believes is sufficient to cover all probable future credit losses as of the balance sheet date based on specific reserves and an expectation of future economic conditions that might impact collectability. Accounts receivable are carried net of allowances for credit losses as of September 30, 2025, and June 30, 2025. Account balances are charged off against the allowance when all reasonable attempts to collect have failed. Actual write-offs may be in excess of the Company’s estimated allowance. The allowance for credit losses was $619 and $546 as of September 30, 2025, and June 30, 2025, respectively. The provision for credit losses for the three months ended September 30, 2025, and 2024 was $73 and $0, respectively.

 

 
Concentration of credit risk

Concentration of credit risk

 

The Company places its cash and cash equivalents, which may at times be in excess of Australia’s Financial Claims Scheme, the U.K. Financial Services Compensation Scheme or the U.S. Federal Deposit Insurance Corporation insurance limits, with high credit quality financial institutions and attempts to limit the amount of credit exposure with any one institution. The amounts over these insured limits as of September 30, 2025 and June 30, 2025 were $1,183,852 and $541,074, respectively. No losses have been incurred to date on any deposits.

 

Major Customer - One customer accounted for 11.7% and 17.8% of revenues for three months ended September 30, 2025 and 2024, respectively.

 

Major Supplier - The Company’s largest suppliers accounted for 17.6% and 20.3% of purchases for the three months ended September 30, 2025 and 2024, respectively. The Company relies on various suppliers for its operations. For the purpose of supplier concentration analysis, “purchases” include only invoiced costs directly attributable to direct material costs.

 
Disaggregated revenue

Disaggregated revenue

 

The following table disaggregates the Company’s revenue by product type:

 

   2025   2024 
   Three Months Ended September 30, 
   2025   2024 
Sales of goods - cartridges  $640,300   $448,514 
Sales of goods - readers   286,913    233,786 
Other sales - accessories   184,584    189,987 
Total revenue  $1,111,797   $872,287 

 
Government support income

Government support income

 

The following table disaggregates the Company’s government support income by type:

 

   2025   2024 
   Three Months Ended September 30, 
   2025   2024 
Grant income  $-   $

16,041

 
Research and development (“R&D”) tax refund   193,267    110,087 
Total government support income  $193,267   $126,128 

 
Foreign currency

Foreign currency

 

The Company’s reporting currency is the U.S. Dollar (“USD”). The functional currency for each foreign subsidiary included in these unaudited condensed consolidated financial statements is the applicable local currency of each entity.

 

For each entity whose functional currency is not the USD, assets and liabilities are translated into USD using the exchange rate in effect on the balance sheet date and revenue and expenses are translated into USD using the average rate in effect for period. Translation gains and losses are recorded as a foreign currency translation adjustment as a component of other comprehensive income (loss), which is a component of accumulated other comprehensive income (loss) on the accompanying unaudited condensed consolidated balance sheets.

 

Cash flows are also translated at average translation rates for the periods; therefore, amounts reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

 
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

Pending adoption:

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires greater disaggregation of information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. The ASU is effective for annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025, with early adoption permitted. The ASU should be applied on a prospective basis although retrospective application is permitted. We are currently evaluating the impact of this ASU on our condensed consolidated financial statements. The Company expects to adopt this guidance in its Annual Report on Form 10-K for the year ending June 30, 2026.

 

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to enhance transparency of the nature and function of expenses, primarily through additional disclosures of certain cost and expenses. ASU 2024-03 will be effective for our annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. We expect the adoption of this ASU will have no impact on our financial position or our results of operations but will result in additional disclosures.

 

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses, which amends topic 326. Specifically, the ASU provides a practical expedient whereby an entity can assume that current conditions as of the balance sheet date will not change for the remaining life of the asset (e.g., the account receivable). This guidance is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of this standard on the unaudited condensed consolidated financial statements.

 

Other ASUs issued but not effective until after September 30, 2025, are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations and/or cash flows.