##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT
 PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2007
 Universal Biosensors, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    98-0424072(State or other jurisdiction of
    
    (I.R.S. Employer Identification Number)incorporation or organization)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)
  o þ
  o o þ
  o þ




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
 PagePART I
    
    FINANCIAL INFORMATIONItem 1
    
    Financial Statements1)    Consolidated condensed balance sheets at September 30, 2007 and
December 31, 2006 (unaudited)
    
    32)    Consolidated condensed statements of operations for the three
months and nine months ended September 30, 2007 and 2006
(unaudited),
    
    43)    Consolidated condensed statements of cash flows for the nine
months ended September 30, 2007 and 2006 (unaudited)
    
    54)    Consolidated condensed statements of changes in stockholders
equity and comprehensive income for the period ended September
30, 2007 (unaudited)
    
    65)    Notes to consolidated condensed financial statements (unaudited)
    
    7Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    17Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    22Item 4
    
    Controls and Procedures
    
    23PART II
    
    OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    Not ApplicableItem 1A
    
    Risk Factors
    
    Not ApplicableItem 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    24Item 3
    
    Defaults Upon Senior Securities
    
    Not ApplicableItem 4
    
    Submission of Matters to a Vote of Security Holders
    
    25Item 5
    
    Other Information
    
    Not ApplicableItem 6
    
    Exhibits
    
    26Exhibit 3.1Exhibit 3.2Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32.0SIGNATURES
    
    27
  2




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##### 



PART I
 
 Item 1 Financial Statements
 UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 
 CONSOLIDATED CONDENSED BALANCE SHEETS
  September 30,
    
    
    December 31,2007
    
    
    2006US$
    
    
    US$ASSETSCurrent assets:Cash
    
    $
    14,814,847
    
    
    $
    23,885,198Accrued income
    
    
    254,884
    
    
    
    76,968Other current assets
    
    
    834,358
    
    
    
    421,394Total current assets
    
    
    15,904,089
    
    
    
    24,383,560Property, plant, and equipment
    
    
    13,758,972
    
    
    
    6,702,280Less accumulated depreciation
    
    
    (1,466,141
    )
    
    
    (1,034,745
    )Property, plant, and equipment  net
    
    
    12,292,831
    
    
    
    5,667,535Total assets
    
    $
    28,196,920
    
    
    $
    30,051,095LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,107,686
    
    
    $
    1,226,779Income taxes payable
    
    
    143,880
    
    
    
    128,982Accrued expenses
    
    
    369,572
    
    
    
    613,492Employee entitlements provision
    
    
    234,715
    
    
    
    111,691Total current liabilities
    
    
    1,855,853
    
    
    
    2,080,944Non-current liabilities:Employee entitlements provision
    
    
    79,084
    
    
    
    55,426Total non-current liabilities
    
    
    79,084
    
    
    
    55,426Total liabilities
    
    
    1,934,937
    
    
    
    2,136,370Stockholders equity:Common stock
    
    
    12,821
    
    
    
    12,800Additional paid-in capital
    
    
    30,455,659
    
    
    
    30,144,048Accumulated deficit
    
    
    (7,190,441
    )
    
    
    (2,387,877
    )Accumulated other comprehensive income
    
    
    2,983,944
    
    
    
    145,754Total stockholders equity
    
    
    26,261,983
    
    
    
    27,914,725Total liabilities and stockholders equity
    
    $
    28,196,920
    
    
    $
    30,051,095
    3




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##### 



UNIVERSAL BIOSENSORS, INC. 
(A Development Stage Enterprise)
 
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
  Period frominception to
    
    
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006US$
    
    
    US$
    
    
    US$
    
    
    US$
    
    
    US$Revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating expenses:Research and development (refer notes 1 and 2
below)
    
    
    11,256,926
    
    
    
    1,523,030
    
    
    
    753,150
    
    
    
    3,998,043
    
    
    
    1,850,617General and administrative (refer note 3 below)
    
    
    5,769,150
    
    
    
    666,754
    
    
    
    338,767
    
    
    
    2,376,790
    
    
    
    1,049,271Total operating expenses
    
    
    17,026,076
    
    
    
    2,189,784
    
    
    
    1,091,917
    
    
    
    6,374,833
    
    
    
    2,899,888Research and development income
    
    
    8,402,814
    
    
    
    249,996
    
    
    
    500,000
    
    
    
    749,988
    
    
    
    1,500,000Loss from operations
    
    
    (8,623,262
    )
    
    
    (1,939,788
    )
    
    
    (591,917
    )
    
    
    (5,624,845
    )
    
    
    (1,399,888
    )Interest and other income
    
    
    1,548,665
    
    
    
    215,284
    
    
    
    93,609
    
    
    
    822,281
    
    
    
    148,701Net loss before tax
    
    
    (7,074,597
    )
    
    
    (1,724,504
    )
    
    
    (498,308
    )
    
    
    (4,802,564
    )
    
    
    (1,251,187
    )Income tax expense
    
    
    (115,844
    )
    
    
    
    
    
    
    (67,756
    )
    
    
    
    
    
    
    (121,924
    )Net loss
    
    $
    (7,190,441
    )
    
    $
    (1,724,504
    )
    
    $
    (566,064
    )
    
    $
    (4,802,564
    )
    
    $
    (1,373,111
    )Basic and diluted net loss per share
    
    $
    (0.13
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.04
    )
    
    $
    (0.03
    )Number of shares used to compute per share data
    
    
    53,534,088
    
    
    
    128,191,651
    
    
    
    43,613,014
    
    
    
    128,113,543
    
    
    
    43,613,014
 
 Notes:
 1 The following amounts have been netted off from
the research and development operating expenses
set out above:Research grant income
    
    
    1,430,464
    
    
    
    202,654
    
    
    
    81,920
    
    
    
    525,873
    
    
    
    322,0542 Includes non-cash compensation expense (R&D)
    
    
    243,566
    
    
    
    100,987
    
    
    
    20,300
    
    
    
    137,103
    
    
    
    88,5333 Includes non-cash compensation expense (General
& Administrative)
    
    
    309,791
    
    
    
    38,011
    
    
    
    37,700
    
    
    
    112,074
    
    
    
    164,418
    4




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 
 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
  Period frominception to
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2007
    
    
    2006US$
    
    
    US$
    
    
    US$Cash flows from operating activities provided by/(used in):Net loss
    
    $
    (7,190,441
    )
    
    $
    (4,802,564
    )
    
    $
    (1,373,111
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation of plant & equipment
    
    
    1,180,707
    
    
    
    290,256
    
    
    
    198,557Share based payments expense
    
    
    553,357
    
    
    
    249,177
    
    
    
    252,951Translation (gain)/loss
    
    
    (717,490
    )
    
    
    (375,938
    )
    
    
    (66,469
    )Change in assets and liabilities:Prepaid expenses and other current assets
    
    
    (523,783
    )
    
    
    (170,220
    )
    
    
    (17,991
    )Grants receivable
    
    
    (254,884
    )
    
    
    (177,916
    )
    
    
    (42,138
    )Income tax payable
    
    
    128,982
    
    
    
    
    
    
    
    121,924Employee entitlements
    
    
    434,052
    
    
    
    146,680
    
    
    
    63,444Accounts payable and accrued expenses
    
    
    476,388
    
    
    
    (165,942
    )
    
    
    173,073Net cash provided by/(used in) operating activities
    
    
    (5,913,112
    )
    
    
    (5,006,467
    )
    
    
    (689,760
    )Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (10,030,346
    )
    
    
    (6,044,022
    )
    
    
    (3,140,291
    )Net cash used in investing activities
    
    
    (10,030,346
    )
    
    
    (6,044,022
    )
    
    
    (3,140,291
    )Cash flows from financing activities:Net proceeds from share issue
    
    
    28,829,239
    
    
    
    
    
    
    
    9,990,001Proceeds from stock options exercised
    
    
    85,884
    
    
    
    62,455
    
    
    
    Net cash provided by financing activities
    
    
    28,915,123
    
    
    
    62,455
    
    
    
    9,990,001Net increase in cash and cash equivalents
    
    
    12,971,665
    
    
    
    (10,988,034
    )
    
    
    6,159,950Cash and cash equivalent at beginning of period
    
    
    
    
    
    
    23,885,198
    
    
    
    3,253,426Effect of exchange rate fluctuations on the balances of cash held in
foreign currencies
    
    
    1,843,182
    
    
    
    1,917,683
    
    
    
    2,468Cash and cash equivalents at end of period
    
    $
    14,814,847
    
    
    $
    14,814,847
    
    
    $
    9,415,844
   5




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 
 CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (Unaudited)
 ForeignAdditional
    
    
    
    
    
    
    currency
    
    
    TotalPreference Shares
    
    
    Ordinary shares
    
    
    paid-in
    
    
    Accumulated
    
    
    translation
    
    
    stockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    capital
    
    
    deficit
    
    
    reserve
    
    
    equityUS$
    
    
    
    
    
    US$
    
    
    US$
    
    
    US$
    
    
    US$
    
    
    US$Balances at December 31, 2006
    
    
    
    
    
    
    
    
    
    
    127,999,976
    
    
    
    12,800
    
    
    
    30,144,048
    
    
    
    (2,387,877
    )
    
    
    145,754
    
    
    
    27,914,725Comprehensive IncomeNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,802,564
    )
    
    
    
    
    
    
    (4,802,564
    )Foreign currency translation reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,838,190
    
    
    
    2,838,190Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,964,374
    )Exercise of stock options issued to employees
    
    
    
    
    
    
    
    
    
    
    206,612
    
    
    
    21
    
    
    
    62,434
    
    
    
    
    
    
    
    
    
    
    
    62,455Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249,177
    
    
    
    
    
    
    
    
    
    
    
    249,177Balances at September 30, 2007
    
    
    
    
    
    
    
    
    
    
    128,206,588
    
    
    
    12,821
    
    
    
    30,455,659
    
    
    
    (7,190,441
    )
    
    
    2,983,944
    
    
    
    26,261,983
 
 Note#
    
    Common stock has a par value of $0.0001.   6




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
 Note 1  Basis of Presentation and Summary of Significant Accounting Policies
 Organization of the Company
        Interim Financial Statements
  7




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
  Principles of Consolidation
  Use of Estimates
  Cash & Cash Equivalents
  Concentration of Credit Risk and Other Risks and Uncertainties
   8




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
 Property, Plant, and Equipment
   September
    
    December30, 2007
    
    31, 2006$
    
    $Plant and equipment
    
    
    3,544,866
    
    
    
    2,170,549Leasehold improvements
    
    
    3,736,939
    
    
    
    192,724Capital work in process
    
    
    6,477,167
    
    
    
    4,339,00713,758,972
    
    
    
    6,702,280Accumulated depreciation
    
    
    (1,466,141
    )
    
    
    (1,034,745
    )Property, plant & equipment  net
    
    
    12,292,831
    
    
    
    5,667,535
    Research and Development
   9




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
  Period frominception to
    
    
    Three Months Ended
    
    
    Nine Months EndedSeptember
    
    
    September 30,
    
    
    September 30,30, 2007
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Research and
development
expenses (net of
research grants of
$1,430,464 for the
period from
inception to
September 30, 2007
and $202,654 and
$81,920 for the
three months ended
September 30, 2007
and 2006
respectively and
$525,873 and
$322,054 for the
nine months ended
September 30, 2007
and 2006
respectively)
    
    
    11,256,926
    
    
    
    1,523,030
    
    
    
    753,150
    
    
    
    3,998,043
    
    
    
    1,850,617
 Income Taxes
    Fair Value of Financial Instruments
  Impairment of Long-Lived Assets
  10




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
 Goods and Services Tax (GST)
  Revenue Recognition
 Research and development revenue
   Interest revenue
  Foreign Currency
 Functional and reporting currency
      11




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
 Transactions and balances
  Group companies
  
    
    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 are translated at average exchange rates
(unless this is not a reasonable approximation of the effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
 
    
    all resulting exchange differences are recognized as a separate component of equity.
  Commitments and Contingencies
  Patent and License Costs
  Clinical Trial Expenses
   Leased Assets
  12




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
 Stock-based Compensation
     Period frominception toSeptember
    
    Three Months Ended
    
    Nine Months Ended30,
    
    September 30,
    
    September 30,2007
    
    2007
    
    2006
    
    2007
    
    2006$
    
    $
    
    $
    
    $
    
    $Research and development
    
    
    243,566
    
    
    
    100,987
    
    
    
    20,300
    
    
    
    137,103
    
    
    
    88,533General and administrative
    
    
    309,791
    
    
    
    38,011
    
    
    
    37,700
    
    
    
    112,074
    
    
    
    164,418Total share-based compensation expense
    
    
    553,357
    
    
    
    138,998
    
    
    
    58,000
    
    
    
    249,177
    
    
    
    252,951
   Grant DateSeptember 2007
    
    March 2007
    
    2006
    
    2004Exercise Price
    
    $
    1.08
    
    
    $
    1.01
    
    
    $
    0.33
    
    
    
    $0.29Share Price at Grant Date
    
    $
    1.03
    
    
    $
    0.98
    
    
    $
    0.33
    
    
    
    $0.29Volatility
    
    
    72
    %
    
    
    74
    %
    
    
    55
    %
    
    
    40%-45
    %Expected Life
    
    10 years
    
    10 years
    
    10 years
    
    10 yearsRisk Free Interest Rate
    
    
    5.99
    %
    
    
    5.86
    %
    
    
    4.40
    %
    
    
    4.65
    %Fair Value of Option
    
    $
    0.63
    
    
    $
    0.77
    
    
    $
    0.23
    
    
    
    $0.08
 13




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
  Number of Options
    
    Weighted -AverageOver Shares
    
    Exercise PriceOutstanding Balance, December 31, 2006
    
    
    3,820,487
    
    
    $
    0.31Granted
    
    
    1,508,000
    
    
    
    1.04Exercised
    
    
    (206,612
    )
    
    
    0.30Lapsed
    
    
    (61,605
    )
    
    
    0.33Outstanding Balance, September 30, 2007
    
    
    5,060,270
    
    
    
    0.53Exercisable shares as of September 30, 2007
    
    
    2,704,064
    
    
    
    0.30
  Fiscal Year2007  remaining periods
    
    $
    106,5752008
    
    
    288,5082009
    
    
    306,9172010
    
    
    146,998848,998
 Pension Costs
  Net Loss per Share and Anti-dilutive Securities
  Total Comprehensive Income
  14




---



##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
  Period frominception toSeptember
    
    Three Months Ended
    
    Nine Months Ended30,
    
    September 30,
    
    September 30,2007
    
    2007
    
    2006
    
    2007
    
    2006$
    
    $
    
    $
    
    $
    
    $Net loss
    
    
    (7,190,441
    )
    
    
    (1,724,504
    )
    
    
    (566,064
    )
    
    
    (4,802,564
    )
    
    
    (1,373,111
    )Currency translation adjustment
    
    
    2,983,944
    
    
    
    993,754
    
    
    
    (838
    )
    
    
    2,838,190
    
    
    
    (27,095
    )Total comprehensive loss
    
    
    (4,206,497
    )
    
    
    (730,750
    )
    
    
    (566,902
    )
    
    
    (1,964,374
    )
    
    
    (1,400,206
    )
 Recent Accounting Pronouncements
 The
Fair Value Option for Financial Assets and Financial Liabilities
  Subsequent Events
   15




---



##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
  16




---



##### 



UNIVERSAL BIOSENSORS, INC.
 
 Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis provides information that we believe is relevant to an
assessment and understanding of our results of operations and financial condition. You should read
this analysis in conjunction with our unaudited consolidated condensed financial statements and
related footnotes, and our audited consolidated financial statements and related footnotes and
Managements Discussion and Analysis of Financial Condition and Results of Operations included in
our Registration Statement on Form 10 filed with the United States Securities and Exchange
Commission (SEC). This Form 10-Q contains, including this discussion and analysis, certain
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe
harbors created by such acts. For this purpose, any statements that are not statements of
historical fact may be deemed to be forward looking statements, including statements relating to
future events and our future financial performance. Those statements in this Form 10-Q containing
the words believes, anticipates, plans, expects, and similar expressions constitute forward
looking statements, although not all forward looking statements contain such identifying words.
 The forward looking statements contained in this Form 10-Q are based on our current
expectations, assumptions, estimates and projections about the Company and its businesses. All
such forward looking statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results to be materially different from those results expressed or
implied by these forward-looking statements, including those set forth in this Quarterly Report.
 Overview
    17




---



##### 



UNIVERSAL BIOSENSORS, INC.
 Results of Operations
 Research and Development Expenses
  
    
    consultant and employee related expenses, which include salary and benefits;
    
    external research and development expenses incurred under agreements with third party
organizations and universities; and
    
    facilities, depreciation and other allocated expenses, which include direct and
allocated expenses for rent and maintenance of facilities, depreciation of leasehold
improvements and equipment and laboratory and other supplies.
  Period frominception toSeptember
    
    
    Three Months Ended
    
    
    Nine Months Ended30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Research and development expenses
    
    
    12,687,390
    
    
    
    1,725,684
    
    
    
    835,070
    
    
    
    4,523,916
    
    
    
    2,172,671Research grants received recognized against
related research and development expenses
    
    
    (1,430,464
    )
    
    
    (202,654
    )
    
    
    (81,920
    )
    
    
    (525,873
    )
    
    
    (322,054
    )Research and development expenses as
reported
    
    
    11,256,926
    
    
    
    1,523,030
    
    
    
    753,150
    
    
    
    3,998,043
    
    
    
    1,850,617
    18




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##### 



UNIVERSAL BIOSENSORS, INC.
  General and Administrative Expenses
   Research and Development Income
  Interest Income
  Liquidity and Capital Resources
    19




---



##### 



UNIVERSAL BIOSENSORS, INC.
     Operating Capital and Capital Expenditure Requirements
   
    
    continued income from LifeScan under our Development and Research Agreement;
    
    our ability to scale our manufacturing operations to meet demand for blood glucose
strips under the Master Services and Supply Agreement and for our point-of-care tests;
    
    additional costs related to the fit out of our manufacturing facility in Melbourne,
Australia and the acquisition of additional manufacturing equipment;
    
    our ability to perform the required services under the Master Services and Supply
Agreement;
    
    regulatory approval of the blood product which Universal Biosensors has been involved in
developing in conjunction with LifeScan and LifeScan determining to launch the product;
    
    the receipt of revenue from LifeScan under the Master Services and Supply Agreement
through: (i) milestone payments upon the achievement of regulatory milestones; (ii)
services fees calculated with reference to blood glucoses tests strips
sold by LifeScan; and (iii) income from the manufacture of blood glucose tests strips by
Universal Biosensors for LifeScan through the manufacture and supply of blood glucose tests
strips;
    
    the emergence of competing or complementary technological developments;
 20




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##### 



UNIVERSAL BIOSENSORS, INC.
 
    
    the success of our research and development efforts;
    
    any expenditures related to commercial production of our point-of-care tests during this
period and the rate of progress and cost of our product development activities;
    
    revenue generated by sales of our point-of-care tests;
    
    expenses we incur in manufacturing, developing, marketing and selling products;
    
    costs and timing of additional regulatory approvals;
    
    costs of filing, prosecuting, defending and enforcing any patent claims and other
intellectual property rights;
    
    the terms and timing of any collaborative, licensing and other arrangements that we may
establish; and
    
    the acquisition of businesses, products and technologies, although we currently have no
commitments or agreements relating to any of these types of transactions.
 Off-Balance Sheet Arrangement
  Less than 1 year
    
    $
    420,2531  3 years
    
    
    881,4933  5 years
    
    
    940,421More than 5 years
    
    
    747,063Total minimum lease payments
    
    $
    2,989,230
 Contractual Obligations
  Payments Due By PeriodLess than 1
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    year
    
    1  3 years
    
    3  5 years
    
    yearsLong-Term Debt Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    2,989,230
    
    
    
    420,253
    
    
    
    881,493
    
    
    
    940,421
    
    
    
    747,063Purchase Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term
Liabilities on Balance
Sheet under GAAP
    
    
    79,084
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,084Total
    
    
    3,068,314
    
    
    
    420,253
    
    
    
    881,493
    
    
    
    940,421
    
    
    
    826,147
 Segments
  21




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##### 



UNIVERSAL BIOSENSORS, INC.
 
 Item 3 Quantitative and Qualitative Disclosures About Market Risk
  22




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##### 



UNIVERSAL BIOSENSORS, INC.
 
 Item 4 Controls and Procedures
    23




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##### 



UNIVERSAL BIOSENSORS, INC.
 
 PART II
 
 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
  Number of OptionsExercised andCorresponding NumberPeriod Ending
    
    of Shares Issued
    
    
    Option Exercise Price
    
    
    Proceeds ReceivedJanuary, 2007
    
    
    79,745
    
    
    
    $ 0.29
    
    
    
    $ 23,425April, 2007
    
    
    7,250
    
    
    
    $ 0.33
    
    
    
    $   2,400July, 2007
    
    
    28,998
    
    
    
    $ 0.33
    
    
    
    $   9,600August, 2007
    
    
    10,874
    
    
    
    $ 0.33
    
    
    
    $   3,588August, 2007
    
    
    79,745
    
    
    
    $ 0.29
    
    
    
    $ 23,442Total
    
    
    206,612
    
    
    
    
    
    
    
    $ 62,455
 24




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##### 



UNIVERSAL BIOSENSORS, INC.
 
 Item 4 Submission of Matters to a Vote of Security Holders
  25




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##### 



UNIVERSAL BIOSENSORS, INC.
 
 Item 6 Exhibits
 Exhibit No
    
    Description
    
    Location3.1*
    
    Amended and Restated Articles of
Incorporation
    
    Incorporated herein by reference3.2*
    
    Amended and Restated By-Laws
    
    Incorporated herein by reference10.1
    
    Master Services and Supply Agreement (Portions of this Exhibit have
been omitted pursuant to a request for confidential treatment)
    
    Filed herewith10.2
    
    Amendment to the License Agreement
(which amends the License Agreement filed on April 30, 2007 on Form 10 as
Exhibit 10.1)
    
    Filed herewith10.3
    
    Amendment to Development and
Research Agreement (which amends the Development and Research Agreement filed on
April 30, 2007 on Form 10 as Exhibit 10.2 and the Amendment
to Development and Research Agreement filed on June 12, 2007 on
Amendment No. 2 to Form 10 as Exhibit 10.2)
    
    Filed herewith31.1
    
    Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer)
    
    Filed herewith31.2
    
    Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer)
    
    Filed herewith32.0
    
    Section 1350 Certificate
    
    Filed herewith
 
  26




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##### 



UNIVERSAL BIOSENSORS, INC.
 
 SIGNATURES
  UNIVERSAL BIOSENSORS, INC.(Registrant)By:
    
    /s/ MARK MORRISSONDate: November 14, 2007
    
    
    
    Mark MorrissonChief Executive Officer and ExecutiveDirectorBy:
    
    /s/ SALESH BALAKDate: November 14, 2007
    
    
    
    Salesh BalakChief Financial Officer
 27




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##### 



UNIVERSAL BIOSENSORS, INC.
 
 INDEX TO EXHIBITS
 Quarterly Report on Form 10-Q
 Dated November 14, 2007
 Exhibit No
    
    Description
    
    Location3.1*
    
    Amended and Restated Articles of
Incorporation
    
    Incorporated herein by reference3.2*
    
    Amended and Restated By-Laws
    
    Incorporated herein by reference10.1
    
    Master Services and Supply Agreement (Portions of this Exhibit have
been omitted pursuant to a request for confidential treatment)
    
    Filed herewith10.2
    
    Amendment to the License Agreement
(which amends the License Agreement filed on April 30, 2007 on Form 10 as
Exhibit 10.1)
    
    Filed herewith10.3
    
    Amendment to Development and
Research Agreement (which amends the Development and Research Agreement filed on
April 30, 2007 on Form 10 as Exhibit 10.2 and the Amendment
to Development and Research Agreement filed on June 12, 2007 on
Amendment No. 2 to Form 10 as Exhibit 10.2)
    
    Filed herewith31.1
    
    Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer)
    
    Filed herewith31.2
    
    Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer)
    
    Filed herewith32.0
    
    Section 1350 Certificate
    
    Filed herewith