##### 



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 June 30, 2007
 Universal Biosensors, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    98-0424072(State or other jurisdiction of incorporation
    
    (I.R.S. Employer Identification Number)or organization)Universal Biosensors, Inc.103 Ricketts Road,Mt Waverley, 3149, VictoriaAustralia
    
    Not Applicable(Address of principal executive offices)
    
    (Zip Code)
 Telephone: +61 3 8542 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 June 30, 2007 and December 31, 2006 (unaudited)
    
    
    12)    Consolidated condensed statements of operations for the three months and six months ended June 30, 2007 and 2006 (unaudited),
    
    
    23)    Consolidated condensed statements of cash flows for the six months ended June 30, 2007 and 2006 (unaudited)
    
    
    34)    Consolidated condensed statements of changes in stockholders equity and comprehensive income for the period ended June 30, 2007 (unaudited)
    
    
    45)    Notes to consolidated condensed financial statements (unaudited)
    
    
    5Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4
    
    Controls and Procedures
    
    
    20PART II
    
    OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    Not ApplicableItem 1A
    
    Risk Factors
    
    Not ApplicableItem 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3
    
    Defaults Upon Senior Securities
    
    Not ApplicableItem 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    22Item 5
    
    Other Information
    
    Not ApplicableSIGNATURES
    
    
    23Item 6
    
    ExhibitsExhibit 31.1
    
    
    24Exhibit 31.2
    
    
    25Exhibit 32.0
    
    
    26




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##### 



PART I
 Item 1 Financial Statements
 UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
CONSOLIDATED CONDENSED BALANCE SHEETS
 June 30,
    
    
    December 31,2007
    
    
    2006US$
    
    
    US$ASSETSCurrent assets:Cash
    
    $
    18,870,789
    
    
    $
    23,885,198Accrued income
    
    
    41,155
    
    
    
    76,968Other current assets
    
    
    762,965
    
    
    
    421,394Total current assets
    
    
    19,674,909
    
    
    
    24,383,560Property, plant, and equipment
    
    
    11,383,597
    
    
    
    6,702,280Less accumulated depreciation
    
    
    (1,275,285
    )
    
    
    (1,034,745
    )Property, plant, and equipment  net
    
    
    10,108,312
    
    
    
    5,667,535Total assets
    
    $
    29,783,221
    
    
    $
    30,051,095LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,988,507
    
    
    $
    1,226,779Income taxes payable
    
    
    138,338
    
    
    
    128,982Accrued expenses
    
    
    313,826
    
    
    
    613,492Deferred income
    
    
    249,996
    
    
    
    Employee entitlements provision
    
    
    199,745
    
    
    
    111,691Total current liabilities
    
    
    2,890,412
    
    
    
    2,080,944Non-current liabilities:Employee entitlements provision
    
    
    70,196
    
    
    
    55,426Total non-current liabilities
    
    
    70,196
    
    
    
    55,426Total liabilities
    
    
    2,960,608
    
    
    
    2,136,370Stockholders equity:Common stock
    
    
    12,809
    
    
    
    12,800Additional paid-in capital
    
    
    30,285,551
    
    
    
    30,144,048Accumulated deficit
    
    
    (5,465,937
    )
    
    
    (2,387,877
    )Accumulated other comprehensive income
    
    
    1,990,190
    
    
    
    145,754Total stockholders equity
    
    
    26,822,613
    
    
    
    27,914,725Total liabilities and stockholders equity
    
    $
    29,783,221
    
    
    $
    30,051,095
  1




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 Period frominception to
    
    
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 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)
    
    
    9,733,896
    
    
    
    1,376,993
    
    
    
    589,996
    
    
    
    2,475,013
    
    
    
    1,097,467General and administrative (refer note 3 below)
    
    
    5,102,396
    
    
    
    1,071,943
    
    
    
    572,904
    
    
    
    1,710,036
    
    
    
    710,504Total operating expenses
    
    
    14,836,292
    
    
    
    2,448,936
    
    
    
    1,162,900
    
    
    
    4,185,049
    
    
    
    1,807,971Research and development income
    
    
    8,152,818
    
    
    
    249,995
    
    
    
    500,000
    
    
    
    499,992
    
    
    
    1,000,000Loss from operations
    
    
    (6,683,474
    )
    
    
    (2,198,941
    )
    
    
    (662,900
    )
    
    
    (3,685,057
    )
    
    
    (807,971
    )Interest and other income
    
    
    1,333,381
    
    
    
    299,411
    
    
    
    28,817
    
    
    
    606,997
    
    
    
    55,092Net loss before tax
    
    
    (5,350,093
    )
    
    
    (1,899,530
    )
    
    
    (634,083
    )
    
    
    (3,078,060
    )
    
    
    (752,879
    )Income tax expense
    
    
    (115,844
    )
    
    
    
    
    
    
    (54,168
    )
    
    
    
    
    
    
    (54,168
    )Net loss
    
    $
    (5,465,937
    )
    
    $
    (1,899,530
    )
    
    $
    (688,251
    )
    
    $
    (3,078,060
    )
    
    $
    (807,047
    )Basic and diluted net loss per share
    
    $
    (0.11
    )
    
    $
    (0.01
    )
    
    $
    (0.02
    )
    
    $
    (0.02
    )
    
    $
    (0.02
    )Number of shares used to compute per share data
    
    
    50,286,608
    
    
    
    128,086,971
    
    
    
    43,613,014
    
    
    
    128,074,042
    
    
    
    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
    
    
    1,227,810
    
    
    
    173,493
    
    
    
    102,321
    
    
    
    323,219
    
    
    
    240,1342.   Includes non-cash compensation expense (R&D)
    
    
    142,579
    
    
    
    16,849
    
    
    
    29,306
    
    
    
    36,116
    
    
    
    68,2333.   Includes non-cash compensation expense (General &
Administrative)271,780
    
    
    
    47,732
    
    
    
    54,424
    
    
    
    74,063
    
    
    
    126,718
  2




---



##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 Period frominception to
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2007
    
    
    2006US$
    
    
    US$
    
    
    US$Cash flows from operating activities provided by/(used in):Net loss
    
    $
    (5,465,937
    )
    
    $
    (3,078,060
    )
    
    $
    (807,047
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation of plant & equipment
    
    
    1,048,056
    
    
    
    157,605
    
    
    
    126,919Share based payments expense
    
    
    419,867
    
    
    
    115,687
    
    
    
    194,951Translation (gain)/loss
    
    
    (353,651
    )
    
    
    (12,099
    )
    
    
    (43,642
    )Change in assets and liabilities:Prepaid expenses and other current assets
    
    
    (636,504
    )
    
    
    (282,941
    )
    
    
    (18,620
    )Grants receivable
    
    
    208,840
    
    
    
    285,808
    
    
    
    37,543Income tax payable
    
    
    128,982
    
    
    
    
    
    
    
    54,168Employee entitlements
    
    
    390,194
    
    
    
    102,823
    
    
    
    55,594Accounts payable and accrued expenses
    
    
    811,477
    
    
    
    169,147
    
    
    
    88,876Net cash provided by/(used in) operating activities
    
    
    (3,448,676
    )
    
    
    (2,542,030
    )
    
    
    (311,258
    )Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (7,688,850
    )
    
    
    (3,702,527
    )
    
    
    (2,667,680
    )Net cash used in investing activities
    
    
    (7,688,850
    )
    
    
    (3,702,527
    )
    
    
    (2,667,680
    )Cash flows from financing activities:Net proceeds from share issue
    
    
    28,829,239
    
    
    
    
    
    
    
    1,686,001Proceeds from stock options exercised
    
    
    49,254
    
    
    
    25,825
    
    
    
    Net cash provided by financing activities
    
    
    28,878,493
    
    
    
    25,825
    
    
    
    1,686,001Net increase in cash and cash equivalents
    
    
    17,740,967
    
    
    
    (6,218,732
    )
    
    
    (1,292,937
    )Cash 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
    
    
    1,129,820
    
    
    
    1,204,323
    
    
    
    2,468Cash and cash equivalents at end of period
    
    $
    18,870,787
    
    
    $
    18,870,789
    
    
    $
    1,962,957
  3




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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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,078,060
    )
    
    
    
    
    
    
    (3,078,060
    )Foreign currency translation reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,844,436
    
    
    
    1,844,436Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,233,624
    )Exercise of stock options issued to employees
    
    
    
    
    
    
    
    
    
    
    86,995
    
    
    
    9
    
    
    
    25,816
    
    
    
    
    
    
    
    
    
    
    
    25,825Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115,687
    
    
    
    
    
    
    
    
    
    
    
    115,687Balances at June 30, 2007
    
    
    
    
    
    
    
    
    
    
    128,086,971
    
    
    
    12,809
    
    
    
    30,285,551
    
    
    
    (5,465,937
    )
    
    
    1,990,190
    
    
    
    26,822,613
 
 NoteCommon stock has a par value of $0.0001.  4




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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
  5




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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
   6




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
 Property, Plant, and Equipment
   June 30,
    
    December2007
    
    31, 2006$
    
    $Plant and equipment
    
    
    3,255,475
    
    
    
    2,170,549Leasehold improvements
    
    
    2,201,526
    
    
    
    192,724Capital work in process
    
    
    5,926,596
    
    
    
    4,339,00711,383,597
    
    
    
    6,702,280Accumulated depreciation
    
    
    (1,275,285
    )
    
    
    (1,034,745
    )Property, plant & equipment  net
    
    
    10,108,312
    
    
    
    5,667,535
   Research and Development
   7




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
  Period frominception to
    
    Three Months Ended
    
    Six Months Ended JuneJune 30,
    
    June 30,
    
    30,2007
    
    2007
    
    2006
    
    2007
    
    2006$
    
    $
    
    $
    
    $
    
    $Research and
development
expenses (net of
research grants of
$1,227,810 for the
period from
inception to June
30, 2007 and
$173,493 and
$102,321 for the
three months ended
June 30, 2007 and
2006 respectively
and $323,219 and
$240,134 for the
six months ended
June 30, 2007 and
2006 respectively)
    
    
    9,733,896
    
    
    
    1,376,993
    
    
    
    589,996
    
    
    
    2,475,013
    
    
    
    1,097,467
 Income Taxes
    Fair Value of Financial Instruments
  Impairment of Long-Lived Assets
  8




---



##### 



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
     9




---



##### 



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
  10




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##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
 Stock-based Compensation
     Period frominception to
    
    Three Months Ended
    
    Six Months Ended JuneJune 30,
    
    June 30,
    
    30,2007
    
    2007
    
    2006
    
    2007
    
    2006$
    
    $
    
    $
    
    $
    
    $Research and development
    
    
    142,579
    
    
    
    16,849
    
    
    
    29,306
    
    
    
    36,116
    
    
    
    68,233General and administrative
    
    
    271,780
    
    
    
    47,732
    
    
    
    54,424
    
    
    
    74,063
    
    
    
    126,718Total share-based compensation expense
    
    
    414,359
    
    
    
    64,581
    
    
    
    83,730
    
    
    
    110,179
    
    
    
    194,951
   Grant Date2007
    
    2006
    
    2004Exercise Price
    
    $
    1.01
    
    
    $
    0.33
    
    
    $
    0.29Share Price at Grant Date
    
    $
    0.98
    
    
    $
    0.33
    
    
    $
    0.29Volatility
    
    
    74
    %
    
    
    55
    %
    
    
    40%-45
    %Expected Life
    
    10 years
    
    
    10 years
    
    
    10 yearsRisk Free Interest Rate
    
    
    5.86
    %
    
    
    4.40
    %
    
    
    4.65
    %Fair Value of Option
    
    $
    0.77
    
    
    $
    0.23
    
    
    $
    0.08
 11




---



##### 



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
    
    
    845,000
    
    
    
    1.01Exercised
    
    
    (86,995
    )
    
    
    0.29Lapsed
    
    
    (61,605
    )
    
    
    0.33Outstanding Balance, June 30, 2007
    
    
    4,516,887
    
    
    
    0.44Exercisable shares as of June 30, 2007
    
    
    2,395,960
    
    
    
    0.30
  Fiscal Year2007  remaining periods
    
    $
    132,2472008
    
    
    243,9372009
    
    
    205,140581,324
 Pension Costs
  Net Loss per Share and Anti-dilutive Securities
  Total Comprehensive Income
  12




---



##### 



UNIVERSAL BIOSENSORS, INC.
(A Development Stage Enterprise)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)
  Periodfrominception to
    
    Three Months Ended
    
    Six Months Ended JuneJune 30,
    
    June 30,
    
    30,2007
    
    2007
    
    2006
    
    2007
    
    2006$
    
    $
    
    $
    
    $
    
    $Net loss
    
    
    (5,465,937
    )
    
    
    (1,899,530
    )
    
    
    (688,251
    )
    
    
    (3,078,060
    )
    
    
    (807,047
    )Currency translation adjustment
    
    
    1,990,190
    
    
    
    1,378,658
    
    
    
    60,592
    
    
    
    1,844,436
    
    
    
    (26,257
    )Total comprehensive loss
    
    
    (3,475,747
    )
    
    
    (520,872
    )
    
    
    (627,659
    )
    
    
    (1,233,624
    )
    
    
    (833,304
    )
 Recent Accounting Pronouncements
 The
Fair Value Option for Financial Assets and Financial Liabilities
  Subsequent Events
  13




---



##### 



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 Annual Report on Form 10 filed with the Securities and Exchange Commission. This discussion and
analysis contains forward-looking statements relating to future events and our future financial
performance. The 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
    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.
  14




---



##### 



Period frominception to
    
    Three Months Ended
    
    Six Months Ended JuneJune 30,
    
    June 30,
    
    30,2007
    
    2007
    
    2006
    
    2007
    
    2006$
    
    $
    
    $
    
    $
    
    $Research and development expenses
    
    
    10,961,706
    
    
    
    1,550,486
    
    
    
    692,317
    
    
    
    2,798,232
    
    
    
    1,337,601Research grants received recognized against
related research and development expenses
    
    
    (1,227,810
    )
    
    
    (173,493
    )
    
    
    (102,321
    )
    
    
    (323,219
    )
    
    
    (240,134
    )Research and development expenses as reported
    
    
    9,733,896
    
    
    
    1,376,993
    
    
    
    589,996
    
    
    
    2,475,013
    
    
    
    1,097,467
     General and Administrative Expenses
   15




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##### 



Research and Development Income
  Interest Income
  Liquidity and Capital Resources
      16




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##### 



Operating Capital and Capital Expenditure Requirements
   
    
    continued income from LifeScan under our Development and Research Agreement;
    
    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;
    
    the success of our research and development efforts;
    
    the emergence of competing or complementary technological developments;
    
    costs related to the fit out of our manufacturing facility in Melbourne, Australia;
    
    whether or not we are successful in negotiating a manufacturing and supply agreement
with LifeScan in connection with the blood glucose test and whether we generate any revenue
from any such arrangement in 2008;
    
    our ability to scale our manufacturing operations to meet demand for our point-of-care tests;
 17




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##### 




    
    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
    
    $
    466,8441  3 years
    
    
    870,9123  5 years
    
    
    932,943More than 5 years
    
    
    870,870Total minimum lease payments
    
    $
    3,141,569
 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
    
    
    3,141,569
    
    
    
    466,844
    
    
    
    870,912
    
    
    
    932,943
    
    
    
    870,870Purchase Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term
Liabilities on Balance
Sheet under GAAP
    
    
    70,196
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,196Total
    
    
    3,211,765
    
    
    
    466,844
    
    
    
    870,912
    
    
    
    932,943
    
    
    
    941,066
 Segments
  18




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##### 



Item 3 Quantitative and Qualitative Disclosures About Market Risk
  19




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##### 



Item 4 Controls and Procedures
  20




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##### 



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
    
    
    $
    2,400Total
    
    
    86,995
    
    
    
    
    
    
    $
    25,825
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##### 



Item 4 Submission of Matters to a Vote of Security Holders
  Item
    
    Proposal
    
    Details of Proposal1.
    
    Consideration of the financial
statements for the year ended
December 31, 2006
    
    Proposal that the Companys
financial statements and
reports for the financial year
ended 31 December 2006 be laid
before the annual general
meeting. There was no
requirement that security
holders approve these reports
by way of votes2.
    
    Adoption and approval of
remuneration report
    
    Proposal that the security
holders have the opportunity to
vote in respect of the
remuneration report of the
Company. The vote on the
resolution is advisory only and
does not bind the board of
directors of the Company3.
    
    Re-election of Dr Colin Adam as
a Class III director of the
Company
    
    Proposal to re-elect Dr Colin
Adam as a Class III director of
the Company to serve a
three-year term of office
expiring on the date of the
2010 annual general meeting of
stockholders4.
    
    Re-election of Mr Charles
Kiefel as a Class III director
of the Company
    
    Proposal to re-elect Mr Charles
Kiefel as a Class III director
of the Company to serve a
three-year term of office
expiring on the date of the
2010 annual general meeting of
stockholders5.
    
    Grant of options to Mr Mark
Morrisson
    
    The grant of options to Mr Mark
Morrisson, the Companys Chief
Executive Officer and Managing
Director, under the Option
Plan, requires the approval of
stockholders under ASX Listing
Rule 10.14. On March 22, 2007,
subject to receipt of necessary
stockholder approval, the Board
resolved to grant 45,000
employee options to Mark
Morrisson under the Option
Plan. The resolution proposed
in item 5 seeks the necessary
approval of this grant of
options in accordance with the
ASX Listing Rules.
  Number of VotesResolution
    
    For
    
    Against
    
    AbstainItem 2 Adoption and Approval of Remuneration report
    
    
    77,562,014
    
    
    
    278,245
    
    
    
    10,000Item 3 Re-election of Dr Colin Adam as a Class III
director of the Company
    
    
    77,574,277
    
    
    
    335,982
    
    
    
    0Item 4 Re-election of Mr Charles Kiefel as a Class III director of the Company
    
    
    77,584,277
    
    
    
    335,982
    
    
    
    0Item 5 Grant of options to Mr Mark Morrisson*
    
    
    47,990,698
    
    
    
    427,732
    
    
    
    0
 
  22




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##### 



SIGNATURES
  UNIVERSAL BIOSENSORS, INC(Registrant)Date: August 9, 2007
    
    By:
    
    /s/ MARK MORRISSON

Mark MorrissonChief Executive Officer and ExecutiveDirectorDate: August 9, 2007
    
    By:
    
    /s/ SALESH BALAK

Salesh BalakChief Financial Officer
 23