What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-05-13 · 382 added, 895 removed, 117 unchanged (92% of the section changed)

Financial statements (Unaudited)

FINANCIAL STATEMENTS

Consolidated Balance Sheets

March 31, 2021

September 30, 2021

June 30, 2021

1 unchanged sentence

Cash and cash equivalents

Deferred charges

Grant receivable, current portion

Research and development tax incentive receivable

Other current assets

Total current assets

Investment in affiliate

Grant receivable, net of current portion

Other non-current assets

LIABILITIES AND SHAREHOLDERS’

EQUITY (DEFICIT)

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

1 unchanged sentence

Related party payables

Convertible notes payable

Current portion of deferred grant income

Current employee benefit liabilities

Total current liabilities

Employee benefit liabilities

Long-term deferred grant income

Total liabilities

Commitments and contingencies (Note 9)

Shareholders’

equity (deficit):

Preferred stock, $0.01 par value, 10,000,000 shares authorized, 3,000,000 and 2,370,891 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively

Common stock, $0.01 par value, 100,000,000 shares authorized, 11,881,322 and 8,630,000 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively

Shareholders’ equity:

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized, 0 and 1,300,000 shares issued and outstanding at September 30, 2021 and June 30, 2020, respectively

Common stock, $ 0.01 par value, 100,000,000 shares authorized, 14,882,522 and 13,582,122 shares issued and outstanding at September 30, 2021 and June 30, 2020, respectively

Additional paid-in capital

3 unchanged sentences

Accumulated other comprehensive loss

Total consolidated group equity (deficit)

Non-controlling interests

Total shareholders’

equity (deficit)

TOTAL LIABILITIES AND SHAREHOLDERS’

accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Total consolidated Group equity

Non-controlling interest

Total shareholders’ equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Consolidated Statements of Operations and Other Comprehensive Loss

Months Ended March 31,

Three Months Ended September 30,

Other income:

support income

revenues and other income

Operating expenses:

and administrative expenses

and regulatory approval expenses

and capital raising expenses

Government support income

Total revenues

Operating expenses:

from operations

Other (expense) income:

from unconsolidated equity method investment

foreign exchange gain/(loss)

other expense

Loss before income

Income tax (expense)/benefit

income tax (expense)/benefit

(loss) income attributable to non-controlling interest

loss attributable to GBS, Inc.

General and administrative expenses

Development and regulatory approval expenses

Prospectus and capital raising expenses

Total operating expenses

Loss from operations

( 1,439,319 )

Other income (expense):

Interest expense

Loss from unconsolidated equity method investment

Realized foreign exchange loss

Interest income

Total other income (expense)

Loss before income taxes

( 1,437,840 )

( 1,076,915 )

Other comprehensive

currency translation gain/(loss) attributable to non-controlling interest

currency translation gain/(loss) attributable to GBS, Inc.

other comprehensive income

Comprehensive

( 1,437,840 )

( 1,076,915 )

Net loss attributable to non-controlling interest

Net loss attributable to GBS, Inc.

1 unchanged sentence

$ ( 1,072,510 )

Other comprehensive loss, net of tax:

Foreign currency translation loss

Total other comprehensive loss

Comprehensive loss

( 1,505,322 )

Net loss per share,

basic and diluted

Weighted average number of shares outstanding,

basic and diluted

accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Consolidated Statements of Changes in Shareholders’

comprehensive

( 1,127,483 )

Comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to GBS, Inc

$ ( 1,500,134 )

$ ( 1,123,078 )

Net loss per share, basic and diluted

Weighted average shares outstanding, basic and diluted

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Consolidated Statements of Changes in Shareholders’ Equity

Preferred stock

Additional paid in

Other comprehensive

Non- controlling

stockholders’

June 30, 2020

Total shareholders’ equity

Balance, June 30, 2021

$ ( 22,869,803 )

$ ( 661,260 )

of convertible preferred shares

currency translation loss

September 30, 2020

Series B warrants exercised to purchase common shares

Conversion of convertible preferred shares into common shares

( 1,300,000 )

of common stock at initial public offering

cost of common stock at initial public offering

of common stock in exchange for preferred shares

of convertible notes into common stock at initial public offering

of convertible preferred shares into common stock at initial public offering

conversion feature

A warrants exercised to purchase common shares

A and B warrants acquired

currency translation loss

December 31, 2020

Foreign currency translation loss

Issuance of convertible preferred shares

Issuance of convertible preferred shares, shares

( 1,432,652 )

A warrants exercised to purchase common shares

B warrants exercised to purchase common shares

currency translation loss

March 31, 2021

( 1,437,840 )

accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

comprehensive

Non-controlling

stockholders’

June 30, 2019

Balance, September 30, 2021

$ ( 24,302,455 )

$ ( 728,742 )

Reclassification

of noncontrolling interest

June 30, 2019

Balance, June 30, 2020

$ ( 15,832,517 )

of convertible preferred shares

costs for common and preferred shares

currency translation loss

September 30, 2019

$ ( 363,951 )

currency translation loss

December 31, 2019

$ ( 5,214,828 )

Issuance of convertible preferred shares

Foreign currency translation loss

( 1,072,510 )

currency translation loss

March 31, 2020

( 1,076,915 )

Balance, September 30, 2020

$ ( 16,905,027 )

accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

$ ( 414,519 )

$ ( 3,047,566 )

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Consolidated Statements of Cash Flows

Nine Months Ended March 31,

Three Months Ended September 30,

Cash flows from operating activities:

1 unchanged sentence

$ ( 1,076,915 )

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on foreign currency translations (net)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Non-cash loss on foreign currency translation, net

Loss on investment in affiliate

Amortization of debt discount and issuance costs

Contingent beneficial conversion feature on convertible notes

Non-cash other operating activities

Changes in operating assets and liabilities:

Other receivables

Grant receivable

Other current assets

Other non-current assets

Accounts payable

Accounts payable - related party

( 1,440,313 )

Other long-term liabilities

Net cash used in operating activities

Cash flows from investing activities:

Net cash used in investing activities

Net cash provided by (used in) operating activities

( 2,677,264 )

Cash flows from financing activities:

Proceeds from issuance of warrants

Proceeds from warrant holders for common shares

Proceeds from issuance of preferred stock

Proceeds from initial public offering

Payment of equity issuance costs

Net cash provided by financing activities

of foreign exchange rates on cash and cash equivalents

Effect of foreign exchange rates on cash and cash equivalents

Increase in cash and cash equivalents

2 unchanged sentences

Non-cash investing and financing activities

Reclassification of deferred charges to additional paid in capital upon completion of initial public offering

Conversion of notes to common shares at initial public offering

Conversion of preferred shares into common shares

2 unchanged sentences

Cash paid for interest

accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

to Condensed Consolidated Financial Statements

1 unchanged sentence

and its wholly owned subsidiary, GBS Operations Inc.

were formed on December 5, 2016 under the laws of the state of Delaware.

Glucose Biosensor Systems (Greater China) Pty Ltd (“GBSPL”) was formed on August 4, 2016 under the laws of New South

Wales, Australia and was renamed to GBS (APAC) Pty Ltd on October 14, 2020.

Glucose Biosensor Systems (Japan) Pty Ltd and GBS

(APAC) Pty Ltd were formed under the laws of New South Wales, Australia on February 22, 2017 and February 23, 2017 respectively.

These companies (collectively, the “Company”

or “Group”) were formed to provide a non-invasive, pain free

innovation to make it easier for people to manage diabetes using the Company’s Saliva Glucose Biosensor (“SGB”

and, together with the software app that interfaces the SGB with the Company’s digital information system, the “SGT”).

is a 48.7% owned (by voting rights) affiliate of Life Science Biosensor Diagnostics Pty Ltd (“LSBD”),

an Australian company that owns the worldwide intellectual property rights to the biosensor platform from University of Newcastle,

LSBD has licensed to the Company that technology to introduce and launch the platform in the Asia-Pacific Region

(“APAC”).

The Company will commence this process with the SGT.

May 29, 2020 a research agreement was executed between LSBD and the Wyss Institute for Biologically Inspired Engineering at Harvard

University (Wyss).

The Company is not a legal party to the agreement but is expecting to derive a benefit through the Technology

Transfer Agreement executed with LSBD and the Company on June 23, 2020, further details which are provided below.

has transferred biosensors (research materials) to the Wyss Institute where its research and development scientists have commenced

a pilot research program.

Since the biosensor architecture is complete and given the pre-existing plans to develop immunology

diagnostic tests, it is therefore relatively straightforward and expeditious to develop the SARS-CoV-2 test.

antibody testing in saliva can play a critically important role in large-scale ‘sero’-surveillance to address key

public health priorities and guide policy and decision-making for COVID-19.

It is anticipated that FDA review will be under the

Emergency Use Authorization program, which means expedited time to market.

June 23, 2020, the Company entered into a Technology Transfer Agreement global license with LSBD.

The significant terms

of the license agreement are:

Company has the exclusive worldwide rights to a biosensor strip for antibodies against SARS-CoV-2 and associated application

for reading devices to:

as the authorized party for the purpose of processing the application of, and obtaining any, regulatory approval for the Licensed

Product, including being authorized to process the approval for an investigational device required for the purpose of carrying

out clinical studies;

promote, market, import, offer, sell, and distribute the Licensed Products;

reasonable customer support services on the use of the Licensed Products to end users of, and health care practitioners referring

end users to, the Licensed Products;

the Licensed Products only for the purposes identified and permitted pursuant to regulatory approval;

data acquired from the Licensed Products

royalty rate is 13%, based upon mutually agreed sales projections on the net sales of the commercial units and dedicated reading

This serves as the minimum royalty and falls to 3% at the expiry of the relevant patent(s)

Each additional year, the sales upon which the minimum

royalty is calculated on is increased by the mutually agreed Expected Market Growth rate plus an Additional Growth Percentage

rate up to 7% annually.

The Additional Growth Percentage Rate is calculated and applied for 10 years

the event of a dispute, in relation to the expected market growth or additional percentage, the agreement provides for a dispute

resolution by an independent third party.

are no milestone payments.

public offering

December 28, 2020, the Company closed its initial public offering (“IPO”) and sold 1,270,589 units, consisting of

(a) one share of the Company’s common stock (or, at the purchaser’s election, one share of Series B Convertible Preferred

Stock), (b) one Series A warrant (the “Series A Warrants”) to purchase one share of the Company’s common stock

at an exercise price equal to $8.50 per share, exercisable until the fifth anniversary of the issuance date, and (c) one Series

B warrant (the “Series B Warrants”) to purchase one share of the Company’s common stock at an exercise price

equal to $17.00 per share, exercisable until the fifth anniversary of the issuance date and subject to certain adjustment and

cashless exercise provisions.

The public offering price of the shares sold in the IPO was $17.00 per unit.

In aggregate, the units

issued in the offering generated $17,732,448 in net proceeds, which amount is net of $1,714,001 in underwriters’

and commissions, and $2,153,564 in offering costs.

Offering costs include underwriters’

warrants to acquire up to 63,529

shares with an exercise price of $18.70 per share, exercisable until the fifth anniversary of the issuance date.

The Company also

issued to the underwriter an option, exercisable one or more times in whole or in part.

If, and to the extent, the Over Allotment

Option was exercised, the underwriter may purchase up to 190,588 additional shares of common stock and/or Series A Warrants

to purchase up to an aggregate of 190,588 shares of common stock and/or Series B Warrants to purchase up to an aggregate of 190,588

shares of common stock, in any combinations thereof, from us at the public offering price per security, less the underwriting

discounts and commissions, for 45 days after the date of the IPO to cover over-allotments, if any (the “Over-Allotment Option”).

the closing of the IPO, all shares of preferred stock then outstanding were automatically converted into 2,810,190 shares of common

stock, and all convertible notes then outstanding were automatically converted into 710,548 shares of common stock.

preferred shareholders were issued warrants following the Company’s completed IPO, that allow the holder to acquire

2,736,675 shares of common stock at the IPO price during year two through to year three following the completion of the IPO.

exercise date, the shareholder must hold, for each warrant to be exercised, the underlying common share to exercise the warrant.

The warrants are not transferable and apply to the number of shares that were subscribed for.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40,

Presentation of Financial Statements - Going Concern (ASC 205-40) requires management to assess an entity’s ability

to continue as a going concern within one year of the date of the financial statements are issued.

In each reporting period, including

interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance

date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial

statement issuance date.

Substantial doubt about an entity’s ability to continue as a going concern exists when conditions

and events, considered in the aggregate, indicate it is probable the entity will be unable to meet its financial obligations as

they become due within one year after the date the financial statements are issued.

formed on December 5, 2016 under the laws of the state of Delaware.

Biosensor Systems (Greater China) Pty Ltd (“GBSPL”) was formed on August 4, 2016 under the laws of New South Wales, Australia

and was renamed to GBS (APAC) Pty Ltd on October 14, 2020.

Glucose Biosensor Systems (Japan) Pty Ltd and Glucose Biosensor Systems (APAC)

Pty Ltd were formed under the laws of New South Wales, Australia on February 22, 2017 and February 23, 2017 respectively.

These companies

(collectively, “we,” “us,” “our,” or the “Company,”) were formed to provide a non-invasive,

pain free innovation to make it easier for people to manage diabetes using the Company’s Saliva Glucose Biosensor (“SGB”

and, together with the software app that interfaces the SGB with the Company’s digital information system, the “SGT”).

Our headquarters are located in New York.

are a biosensor diagnostic technology company operating across the Asia-Pacific Region (“APAC Region”) and an interest

in the USA Region with the biosensor platform comprising of biochemistry, immunology, tumor markers, hormones, and nucleic acid diagnostic

modalities, and worldwide with our COV2 test.

objective is to introduce and launch initially the SGB, the diagnostic test

that stems from the Biosensor Platform that we license from Life Science Biosensor Diagnostics Pty Ltd (“LSBD” or

“Licensor”), in our regions and the COV2 test globally.

This will be followed by developing the platform to its full

capacity testing across the diagnostic modalities of immunology, hormones, chemistry, tumor markers and nucleic acid tests.

Inc, is a 29.9 %

(as of September 30, 2021) owned affiliate of LSBD, an Australian company that owns the worldwide intellectual property rights to the

biosensor platform from University of Newcastle, Australia.

LSBD has licensed to the Company that technology to introduce and

launch the platform in the APAC Region.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation

of Financial Statements - Going Concern requires management to assess an entity’s ability to continue as a going concern within

one year of the date of the financial statements are issued.

In each reporting period, including interim periods, an entity is required

to assess conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an

entity will not meet its financial obligations within one year from the financial statement issuance date.

Substantial doubt about an

entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate it is

probable the entity will be unable to meet its financial obligations as they become due within one year after the date the financial

statements are issued.

Company is an emerging growth company and has not generated any revenues to date.

As such, the Company is subject to all of the

risks associated with emerging growth companies.

Since inception, the Company has incurred losses and negative cash flows from

operating activities.

The Company does not expect to generate positive cash flows from operating activities in the near future

until such time, if at all, the Company completes the development process of its products, including regulatory approvals, and

thereafter, begins to commercialize and achieve substantial acceptance in the marketplace for the first of a series of products

in its medical device portfolio.

Company incurred a net loss of $6,209,971 for the nine months ended March 31, 2021 (Net loss $2,728,970 for the nine months

ended March 31, 2020).

As at March 31, 2021, the Company has shareholders’

equity of $15,875,416, working

capital of $15,026,877, and an accumulated deficit of $(22,016,804).

January 30, 2020, the International Health Regulations Emergency Committee of the World Health Organization (the “WHO”)

declared the novel coronavirus disease 2019 (“COVID-19”) outbreak a public health emergency of international concern

and on March 12, 2020 the WHO announced the outbreak was a pandemic.

The COVID-19 pandemic is having a negative impact on global

markets and business activity, which has had a limited impact on our core business operations.

However, due to the nature of our

platform technology we are able to quickly adapt to this rapidly evolving environment.

As part of the immunology modality of the

biosensor platform, LSBD executed an agreement on May 29, 2020 with the Wyss Institute for Biologically Inspired Engineering

at Harvard University to use the biosensor platform to develop a COVID-19 rapid diagnostic test.

The Company has the rights

to the technology from this agreement under a Technology Transfer Agreement global license with LSBD entered into on June 23,

is the global licensee and intends to commercialize COVID-19 diagnostic tests across the US, Europe, APAC and the rest of

the world through appropriately qualified distributors.

the near future, the Company anticipates incurring operating losses and does not expect to experience positive cash flows from

operating activities and may continue to incur operating losses until it completes the development of its products and seeks regulatory

approvals to market such products.

Company’s consolidated financial statements have been prepared on a going concern basis which contemplates the realization

of assets and satisfaction of liabilities and commitments in the normal course of business.

The consolidated financial statements

do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and

classification of liabilities should the Company be unable to continue as a going concern.

a result of the Company’s initial public offering (see Note 1), the Company believes it has sufficient working capital to

finance its operations for the next twelve months as such these consolidated financial statements are prepared on the going

concern basis.

As such, the Company is subject to all of the risks

associated with emerging growth companies.

Since inception, the Company has incurred losses and negative cash flows from operating activities.

The Company does not expect to generate positive cash flows from operating activities in the near future until such time, if at all,

the Company completes the development process of its products, including regulatory approvals, and thereafter, begins to commercialize

and achieve substantial acceptance in the marketplace for the first of a series of products in its medical device portfolio.

Company incurred a net loss of $ 1,432,652 for the three months ended September 30, 2021 (net loss of $ 1,072,510 for the three months

ended September 30, 2020).

At September 30, 2021, the Company has shareholders’ equity of $ 13,501,299 , working capital of $ 13,027,563 ,

and an accumulated deficit of $ 24,302,455 .

the near future, the Company anticipates incurring operating losses and does not expect to experience positive cash flows from operating

activities and may continue to incur operating losses until it completes the development of its products and seeks regulatory approvals

to market such products.

Company’s consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets

and satisfaction of liabilities and commitments in the normal course of business.

The consolidated financial statements do not include

any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities

should the Company be unable to continue as a going concern.

Company believes it has sufficient working capital to finance its operations for at least the next twelve months, as such, these

financial statements are prepared on the going concern basis.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of presentation

unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting

principles generally accepted in the United States (“

GAAP”) and pursuant to the requirements for reporting

on Form 10-Q and Article 10 of Regulation S-X and, therefore, omit or condense certain footnotes and other information normally

included in financial statements prepared in accordance with U.S.

In the opinion of management, the condensed consolidated

financial statements reflect all adjustments and reclassifications that are necessary for the fair presentation of financial results

as of and for the periods presented.

The results of operations for an interim period may not give a true indication of the results

for the entire year.

The June 30, 2020 consolidated balance sheet has been derived from the audited financial statements as of

condensed consolidated financial statements have been derived from, and should be read in conjunction with, the Company’s

audited consolidated financial statements and notes thereto as of and for the year ended June 30, 2020 included in the Company’s

Registration Statement on Form S-1, File No.

333-252277 on file with the U.S.

Securities and Exchange Commission (the “SEC”).

There have not been any significant changes to the Company’s significant accounting policies during the nine months ended

March 31, 2021.

preparation of consolidated financial statements in conformity with 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 consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period.

Actual results

could materially differ from those estimates.

unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally

accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and

Article 10 of Regulation S-X.

Accordingly, our condensed consolidated financial statements do not include all the information and footnotes

required by 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, 2021, are not necessarily indicative of the results that may be expected for the year ending June 30, 2022.

The accompanying 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 year ended June 30, 2021, which was filed with

Securities and Exchange Commission (the “SEC”) on September 16, 2021 and amended on Form 10-K/A filed with

the SEC on September 30, 2021 (as amended, the “2021 Form 10-K”).

of consolidation

accompanying 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.

significant intercompany transactions and balances have been eliminated upon consolidation.

preparation of consolidated financial statements in conformity with 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 consolidated financial

statements, and the reported amounts of revenue and expenses during the reporting period.

Actual results could materially differ from

those estimates.

Reclassifications

reclassifications have been made to prior periods to conform to current period presentation as described below.

the comparative period (FY 2020), management determined that certain transactions involving the issuance of shares of its subsidiary

that occurred during the prior year should have resulted in an adjustment to non-controlling interest (“NCI”) and

Additional Paid-in-Capital (“APIC”) to reflect the difference between the fair value of the consideration received

and the book value of NCI involving these changes in ownership.

As a result, the Company increased its prior year APIC with an

offsetting reduction to NCI of $637,056.

Management concluded that this reclassification was not meaningful to the Company’s

financial position for the prior year, and as such, this change was recorded in the consolidated balance sheets and statements

of shareholder’s equity in the first quarter of the comparative period (FY 2020) as an out-of-period adjustment.

the three months ended March 31, 2020, amounts presented in the income statement reflect the difference between the nine months

ended March 31, 2020 and the previously reported six months ended December 31, 2019 (Form 10Q for the quarter ended December 31,

These quarterly balances was mainly impacted by a reclassification of $268,457 in overhead reimbursements that has

been reclassified from other income to general and administrative expenses for comparative reasons.

The Company currently

does not generate any revenue.

The foreign currency translation gain was also adjusted by $165,230 to total operating expenses

for the same reason.

reclassifications have been made to prior periods to conform to current period presentation within the consolidated statements of operations

and other comprehensive loss.

from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by delivering the promised

2 unchanged sentences

obtains control of that good or service deliverable.

and Development (R & D) tax refund

Company measures the research and development grant income and receivable by considering the time spent by employees on eligible research

and development activities and research and development costs incurred to external service providers.

The research and development tax

refund receivable is recognized as the Company believes that it probable that the amount will be recovered in full through a future

No research and development tax refund income is recognized in current and comparative period.

currency translation

and liabilities of foreign subsidiaries are translated from local (functional) currency to reporting currency (U.S.

the rate of exchange in effect on the consolidated balance sheets date;

income and expenses are translated at the average rate

of exchange prevailing during the year.

dollar) at the rate

of exchange in effect on the consolidated balance sheets date;

income and expenses are translated at the average rate of exchange prevailing

during the year.

The functional currency of GBS Inc.

is the United States dollar.

Foreign currency

movements resulted in a gain/(loss) of ($262,032) and ($278,744) for the three and nine months ended March 31, 2021, respectively

and $100,921 and ($28,129) for the three and nine months ended March 31, 2020, respectively.

accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”)

740, Income Taxes , tax positions initially need to be recognized in the consolidated financial statements when it is more

likely than not that the positions will be sustained upon examination by taxing authorities.

It also provides guidance for de-recognition,

classification, interest and penalties, accounting in interim periods, disclosure, and transition.

of March 31, 2021, the Company had no uncertain tax positions that qualified for either recognition or disclosure in the

consolidated financial statements.

Foreign currency movements resulted in a loss of $ 67,482

and $ 50,568 for the three months ended September 30, 2021 and 2020, respectively.

accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 740,

Income Taxes , tax positions initially need to be recognized in the consolidated financial statements when it is more likely than

not that the positions will be sustained upon examination by taxing authorities.

It also provides guidance for de-recognition, classification,

interest and penalties, accounting in interim periods, disclosure, and transition.

of September 30, 2021, the Company had no uncertain tax positions that qualified for either recognition or disclosure in the consolidated

financial statements.

Additionally, the Company had no interest and penalties related to income taxes.

Company accounts for current and deferred income taxes and, when appropriate, deferred tax assets and liabilities are recorded

with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax

Where, based on the weight of all available evidence, it is more likely than not that some amount of the recorded deferred

tax assets will not be realized, a valuation allowance is established for that amount that, in management’s judgment, is

sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

issuance cost

issuance costs are amortized using the effective interest rate method over the term of the loan and the amortization expense is

recorded as part of interest expense of the consolidated statements of operations.

the first quarter of the fiscal year ended June 30 2020, the Company purchased the license right procurement assets from

LSBD for an amount of $976,308 (June 30, 2019:

$ nil) in relation to the development and approval process for the Glucose Biosensor Technology.

The Company recorded the license at the historical carrying value in the books of LSBD which was $ nil and recorded the amount paid as

a deemed dividend.

The Company has agreed to pay royalties of sales & milestones payments as defined.

July 3, 2019, the Company entered into an amended and restated license agreement.

There is no set expiration date for the license.

However, the exclusivity of the license granted under the license agreement runs until the expiration of the patent portfolio

covered by the agreement which is currently until 2033.

No royalties have been incurred through to March 31, 2021 (March 31, 2020:

March 31, 2021, GBS entered into an agreement with LSBD to provide GBS an option to acquire an exclusive license to use LSBD’s

intellectual property in the Saliva Glucose Biosensor in North America (the “Option Agreement”).

The Option Agreement

has a term of two years and the exercise price for the option is $5 million.

The fee of $0.5 million incurred for the option has been

recognized as an expense and included within ‘Development and regulatory approval expenses in the consolidated statements of operations.

and development costs

the quarter ended March 31, 2021, the Company contributed a total of $2,600,000 towards budgeted development and commercialization

costs to be incurred by BiosensX (North America) Inc.

in which the Company has a 50% interest.

This represents the

Company’s contribution towards budgeted development and commercialization costs included in total costs budgeted

in the Form S-1.

This funding relates to the development and preparation for submission of the Saliva Glucose Biosensor

connected with regulatory approval for the U.S market by the U.S Food & Drug Administration.

This amount is recognized as

a prepayment and will be expensed as incurred over an estimated 18 month period in which the costs are expected to be

loss per share attributable to common shareholders (“EPS”)

the first quarter of the fiscal year ended June 30 2020, the Company purchased the license right procurement assets from LSBD for an

amount of $ 976,308 in relation to the development and approval process for the Glucose Biosensor Technology.

The Company recorded the

license at the historical carrying value in the books of LSBD which was $ nil and recorded the amount paid as a deemed dividend.

Company has agreed to pay royalties of sales & milestones payments as defined.

On September 12, 2019, the Company entered into

an amended and restated license agreement for Saliva Biosensor Technology.

On June 23, 2020, the Company entered into a license agreement

with LSBD for the worldwide rights to SARS-CoV – 2 application of the Saliva Glucose Biosensor.

In relation to these licenses, there is no set

expiration date for the license.

However, the exclusivity of the license granted under the license agreement runs until the expiration

of the patent portfolio covered by the agreement which is currently until 2033.

No royalties have been incurred through to September

30,2021 (September 30, 2020:

March 31, 2021, GBS entered into an agreement with LSBD to provide GBS an option to acquire an exclusive license to use LSBD’s

intellectual property in the Saliva Glucose Biosensor in North America (the “Option Agreement”).

The Option Agreement has

a term of two

years and the exercise price for the option is

The fee of $ 0.5

million incurred for the option was expensed

in the period incurred.

June 30, 2021, GBS executed a definitive grant agreement with the Australian Government to assist with building a manufacturing facility.

The grant has a total value of up to $ 4.7 million upon the achievement of certain milestones.

Proceeds from the grant will be used primarily

to reimburse GBS for costs incurred in the construction of the manufacturing facility.

for the grant does not fall under ASC 606, Revenue from Contracts with Customers, as the Australian Government will not benefit directly

from our manufacturing facility.

As there is no authoritative guidance under U.S.

GAAP on accounting for grants to for-profit business

entities, we applied International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure

of Government Assistance by analogy when accounting for the Australian Government grant to GBS.

Australian Government grant proceeds will be used to reimburse construction costs incurred meet the definition of grants related to assets

as the primary purpose for the payments is to fund the construction of a capital asset.

Under IAS 20, government grants related to assets

are presented in the statement of financial position either by setting up the grant as deferred income or by deducting the grant in arriving

at the carrying amount of the asset.

Either of these two methods of presentation of grants related to assets in financial statements

are regarded as acceptable alternatives under IAS 20.

We have elected to record the grants received as deferred income using the first

IAS 20, government grants are initially recognized when there is reasonable assurance the conditions of the grant will be met and the

grant will be received.

As of June 30, 2021, management concluded that there was reasonable assurance the grant

conditions will be met and all milestone payment received.

The total grant value of $ 4.7

million was recognized as both a grant receivable

and deferred grant income on the grant effective date.

The grant receivable was reduced by $ 1.9

million for payments received during the three

months ended September 30, 2021 and $ 2.7

million remains in grant receivable on the Condensed Consolidated

Balance Sheets.

initial recognition, under IAS 20, government grants are recognized in earnings on a systematic basis in a manner that mirrors the manner

in which the Company recognizes the underlying costs for which the grant is intended to compensate.

Further, IAS 20 permits for recognition

in earnings either separately under a general heading such as other income, or as a reduction of the cost of the asset.

The Company has

elected to recognize government grant income separately within other income.

Accordingly, the deferred income related to the construction

of the manufacturing facility will be amortized over the period of depreciation for the related factory as other income.

grant income was recognized in other income during the three months ended September 30, 2021.

loss per share attributable to common shareholders (“EPS”)

Company calculates earnings per share attributable to common shareholders in accordance with ASC Topic 260, Earning Per Share .

Basic net income (loss) per share attributable to common shareholders is calculated by dividing net income (loss) attributable

to common shareholders by the weighted-average number of common shares outstanding during the period.

Diluted net income (loss)

per common share is calculated by dividing net income (loss) attributable to common shareholders by weighted-average common shares

outstanding during the period plus potentially dilutive common shares, such as share warrants.

dilutive common shares shall be calculated in accordance with the treasury share method, which assumes that proceeds from the

exercise of all warrants are used to repurchase common share at market value.

The number of shares remaining after the proceeds

are exhausted represents the potentially dilutive effect of the securities.

the Company has incurred net losses in all periods, certain potentially dilutive securities, including convertible preferred stock,

warrants to acquire common stock, and convertible notes payable have been excluded in the computation of diluted loss per share

as the effects are antidilutive.

issued but not yet effective accounting pronouncements

the Company is an emerging growth company, it has elected to defer the adoption of new accounting pronouncements until they would

apply to private companies.

August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt

instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments

with a beneficial conversion feature.

As a result, entities will not separately present in equity an embedded conversion feature

in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met.

The elimination

of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible

instrument that is within the scope of ASU 2020-06.

Also, ASU 2020-06 requires the application of the if-converted method for

calculating diluted earnings per share and treasury stock method will be no longer available.

ASU 2020-06 is applicable for fiscal

years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15,

The Company does not intend to early adopt and continues to evaluate the impact of the provisions of ASU 2020-06 on its

consolidated financial statements.

Basic net income (loss) per share attributable to common shareholders is calculated by dividing net income (loss) attributable to common

shareholders by the weighted-average number of common shares outstanding during the period.

Diluted net income (loss) per common share

is calculated by dividing net income (loss) attributable to common shareholders by weighted-average common shares outstanding during

the period plus potentially dilutive common shares, such as share warrants.

dilutive common shares shall be calculated in accordance with the treasury share method, which assumes that proceeds from the exercise

of all warrants are used to repurchase common share at market value.

The number of shares remaining after the proceeds are exhausted

represents the potentially dilutive effect of the securities.

the Company has incurred net losses in all periods, certain potentially dilutive securities, including convertible preferred stock, warrants

to acquire common stock, and convertible notes payable have been excluded in the computation of diluted loss per share as the effects

are antidilutive.

accounting pronouncements

the Company is an emerging growth company, we have elected to defer the adoption of new accounting pronouncements until they would apply

to private companies.

August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments

by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial

conversion feature.

As a result, entities will not separately present in equity an embedded conversion feature in such debt and will

account for a convertible debt instrument wholly as debt, unless certain other conditions are met.

The elimination of these models will

reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within

the scope of ASU 2020-06.

Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per

share and treasury stock method will be no longer available.

ASU 2020-06 is applicable for fiscal years beginning after December 15,

2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020.

The Company has not early adopted

and continues to evaluate the impact of the provisions of ASU 2020-06.

February 2016, the FASB issued ASU No.

2016-02, Leases (“ASU 2016-02”).

This update requires all leases with a term

greater than 12 months to be recognized on the balance sheet through a right-of-use asset and a lease liability and the disclosure

of key information pertaining to leasing arrangements.

This new guidance is effective for fiscal years beginning after December

15, 2021, and interim period within fiscal years beginning after December 15, 2022 as amended by ASU 2020-05 with early adoption

The Company has not early adopted the standard and continues to evaluate the impact.

2016-02, Leases (“ASU 2016-02”).

This update requires all leases with a term greater

than 12 months to be recognized on the balance sheet through a right-of-use asset and a lease liability and the disclosure of key information

pertaining to leasing arrangements.

This new guidance is effective for fiscal years beginning after December 15, 2021, and interim period

within fiscal years beginning after December 15, 2022 as amended by ASU 2020-05 with early adoption permitted.

The Company has not early

adopted the standard and continues to evaluate the impact.

December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU

2019-12”), which is intended to simplify various aspects of the accounting for income taxes.

ASU 2019-12 removes certain

exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020.

Early adoption is permitted.

Simplifying the Accounting for Income Taxes (“ASU 2019-12”),

which is intended to simplify various aspects of the accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general

principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This standard is effective

for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020.

The Company adopted ASU 2019-12

as of July 1, 2021 and the adoption did not have a material impact on the Company’s unaudited interim condensed consolidated financial

In 2016, the FASB issued

ASU 2016-13 (Topic ASC 326);

Financial Instruments – Credit Losses, which (i) significantly changes the impairment model for

most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss

model which will be based on an estimate of current expected credit loss (CECL) (ASC 326-20);

and (ii) provides for recording credit

losses on available-for-sale (AFS) debt securities through an allowance account (ASC 326-30).

The standard also requires certain incremental

Subsequently, the FASB issued several ASUs to clarify, improve, or defer the adoption of ASU 2016-13.

ASU 2016-13, as amended

by ASU 2019-10, is applicable for SRCs (Small Reporting Companies) for fiscal years beginning after December 15, 2022, with early adoption

The Company has not early adopted the standard and continues to evaluate the impact.

Concentration

of credit risk

Company places its cash and cash equivalents, which may at times be in excess of the Australia Financial Claims Scheme or the

United States’

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.

Company has related party transactions with LSBD.

See Notes 7 and 8.

value of financial instruments

carrying value of financial instruments classified as current assets and current liabilities approximate fair value due to their

liquidity and short-term nature.

OTHER CURRENT ASSETS

current assets consist of the following:

March 31, 2021

SCHEDULE OF OTHER CURRENT ASSETS

September 30, 2021

June 30, 2021

1 unchanged sentence

Other receivables

the three months ended March 31, 2021, the Company made $2,600,000 in prepayments relating to research and development

contributions.

Of the total prepayments, $866,667 was recorded as a non-current asset as of March 31, 2021 based

on the expected outflow of the budgeted research and development costs.

As of the year ended June 30, 2021, the

Company made $ 2,600,000

in prepayments for research and development.

Of the total prepayments, $ 504,000

is recorded as a non-current asset based on the expected outflow of the budgeted research and development costs.

Under the terms of

a research and development agreement with BiosensX North America Inc., dated April 20, 2021, in which LSBD also committed to fund

as a direct 50 %

shareholder in BiosensX North America Inc., the Company would have the right to apply any differences in contributions between LSBD

and the Company towards any amounts owing between the Company and LSBD, including the exercise price of the Option ($ 5

million) as included in the Option Agreement dated March 31, 2021 with LSBD (see Note 3).

has been recognized in relation to prepaid research and development during the three months ended September 30, 2021.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

March 31, 2021

payable and accrued expenses consist of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

September 30, 2021

June 30, 2021

Accounts and other payables

Related party payables

Employee liabilities (current and non-current)

CONVERTIBLE NOTES PAYABLE

Company’s previously outstanding notes mandatorily converted, at a conversion price equal to 85% of 50% of the unit offering

price of the IPO (or $7.23), for an aggregate of 710,548 shares based on $5,133,706 of principal and zero accrued interest outstanding

at the date of conversion.

convertible notes had a contingent Beneficial Conversion Features (BCF), with the contingency being the event of IPO.

a financing cost of $905,948 was recognized as interest expense in the consolidated statements of operations and other comprehensive

loss in relation to this contingent BCF during the nine months ended March 31, 2021.

SHAREHOLDERS’

2020 Transactions

December 14, 2020, the Company agreed to issue to LSBD, in consideration of LSBD’s contribution towards the research and

development of applications other than glucose and COVID-19 applications to a maximum of $2 million over a 5-year period, a 5-year

non-transferable warrant to purchase 3,000,000 shares of the Company’s common stock at the exercise price of $17.00 per

As this was a transaction between entities under common control, the $2 million receivable due from LSBD has been recognized

as contra-equity.

December 18, 2020, the Company entered into an Exchange Agreement (the “EA”) with LSBD to exchange 3,000,000 shares

of its common stock held by LSBD for 3,000,000 shares of the Company’s Series B Convertible Preferred Stock (the “Exchange”).

In addition, the parties to the Exchange Agreement entered into a Registration Rights Agreement (the “RRA”) pursuant

to which the Company agreed to prepare and file within 30 days following the closing of the IPO with the Securities and Exchange

Commission a registration statement to register for resale the shares of Common Stock issuable upon conversion of the Series B

Convertible Preferred Stock.

If and to the extent the Company fails to, among other things, file such resale registration statement

or have it declared effective as required under the terms of the RRA, the Company will be required to pay to the holder of such

registration rights partial liquidated damages payable in cash in the amount equal to the product of 1.0% multiplied by the aggregate

purchase price paid by such holder pursuant to the EA.

The EA and the RRA contain customary representations, warranties, agreements

and, indemnification rights and obligations of the parties.

The common stock acquired in the Exchange was immediately retired.

Each share of Series B Convertible Preferred Stock is convertible into 1 share of the Company’s common stock, subject to

proportional adjustment and beneficial ownership limitations.

In the event of the Company’s liquidation, dissolution or

winding up, holders of Series B Convertible Preferred Stock will participate pari passu with any distribution of proceeds to holders

of the Company’s common stock.

Holders of Series B Convertible Preferred Stock are entitled to receive dividends on shares

of Series B Preferred equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on the

Company’s common stock.

Shares of Series B Convertible Preferred Stock generally have no voting rights, except as required

public offering

December 2020, the Company completed its initial public offering.

For further details refer to Note 1.

2021 Transactions

the quarter ended March 31, 2021, Series A and Series B warrants held by certain shareholders were exercised.

Each warrant is

convertible into 1 share of the Company’s common stock.

A total of 58,600 Series A warrants and 1,400,195 Series B warrants

were exercised and converted into common stock.

SHAREHOLDERS’ EQUITY

of September 30, 2021, 1,401,377 and 59,782 Series A and Series B warrants were held by certain shareholders, respectively.

is convertible into 1 share of the Company’s common stock.

On September 9, 2021, the Company issued 400 shares of common stock

as a result of Series B warrants that were exercised and converted into common stock.

August 31, 2021, all 1,300,000 Series B Convertible Preferred Stock was converted into common stock.

Each share of Series B Convertible

Preferred Stock was converted into 1 share of the Company’s common stock.

RELATED-PARTY TRANSACTIONS

Company completed certain financing transactions with LSBD as described in Note 7.

to and purchases from related parties are made in arm’s length transactions both at normal market prices and on normal commercial

The following transactions also occurred with LSBD during the period July 1, 2020 to March 31, 2021 (FY2020:

to March 31, 2020):

Company incurred a total of $23,523 (FY2020:

$541,023) towards the services in connection with development and regulatory approval

pathway for the technology, including payments made or expenses incurred on behalf of the Company.

Company incurred a total of $nil (FY2020:

$447,440) towards overhead cost reimbursement which includes salaries, rents and other

related overheads directly attributable to the Company which are included in general and administration expenses.

Company recognized income of $nil (FY2020:

$119,744) in relation to shared labour reimbursement which includes salaries directly

attributable to the Company which are included in shared-services revenue.

March 31, 2021, GBS entered into an Option Agreement with LSBD to provide GBS the option to acquire an exclusive license for LSBD’s

intellectual property.

A fee of $500,000 was paid to acquire this option.

For further details refer to Note 3.

the quarter ended March 31, 2021, the Company contributed a total of $2,600,000 towards budgeted development and

commercialization costs to be incurred by BiosensX (North America) Inc.

relating to the development and preparation

for submission of the Saliva Glucose Biosensor connected with regulatory approval for the U.S market by the U.S Food & Drug

Administration.

For further details refer to Note 3.

to and purchases from related parties are made in arm’s length transactions both at normal market prices and on normal commercial

The following transactions occurred with LSBD during the period July 1, 2021 to September 30, 2021.

Company incurred a total of $ 119,652 (three months to September 2020:

$ Nil ) towards overhead cost reimbursement which includes salaries,

rents and other related overheads directly attributable to the Company which are included in general and administration expenses.

INVESTMENT IN AFFILIATE

May 29, 2020 LSBD, issued 14,000,000 common shares of BiosensX (North America)

May 29, 2020, LSBD, issued 14,000,000 common shares of BiosensX (North America) Inc.

to the Company at par value of $ 0.001 per share.

This transaction provided the Company with a 50% interest in BiosensX (North

America) Inc., the holder of the technology license for the North America region.

This transaction provided the Company with a 50 % interest in BiosensX (North America) Inc., the holder of the technology license for

the North America region.

investment in BiosensX (North America) Inc.

1 unchanged sentence

Equity Method and Joint Ventures .

the date of this transaction, LSBD was the parent of both the Company and BiosensX (North America) Inc., the transfer of BiosensX

shares to the Company was deemed to be a common control transaction.

As a result of the share transfer, the Company has significant

influence over BiosensX (North America) Inc.

but in accordance with ASC 810 Consolidation LSBD is deemed to have control

the date of this transaction, LSBD was the parent of both the Company and BiosensX (North America) Inc., the transfer of BiosensX shares

to the Company was deemed to be a common control transaction.

As a result of the share transfer, the Company has significant influence

over BiosensX (North America) Inc.

but, in accordance with ASC 810 Consolidation , LSBD is deemed to have control over BiosensX

(North America) Inc.

due to its direct ownership of 50% in BiosensX (North America) Inc.

and indirect ownership

of 50% in BiosensX (North America) Inc.

and indirect ownership of 50% in BiosensX (North

America) Inc.

through GBS Inc.

of March 31, 2021, LSBD holds 48.7% of common Stock of GBS Inc.

and therefore still has control over BiosensX (North America)

of September 30, 2021, LSBD holds 29.9 % of common Stock of GBS Inc.

and therefore still has control over BiosensX (North America) Inc.

following table summarizes the amount recorded in the consolidated financial statements:

March 31, 2021

SUMMARY OF AMOUNT RECORDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

June 30, 2021

Investment value

(Loss) income from the affiliate

Loss from the affiliate

Carrying amount

COMMITMENTS AND CONTINGENCIES

January 5, 2021, the Company entered into a certain Research Collaboration Agreement with Harvard College for the purposes of

facilitating mutual collaboration in scientific research in connection with the Company’s non-exclusive royalty free license

to combat COVID-19 coronavirus.

The contemplated collaboration includes research teams from the Company and Harvard and will include,

among others, exchange of materials and research data, to now progress with the milestone of integrating the Harvard technology

with the Company’s biosensor with applications for SARS-Cov-2 antibody test for COVID-19.

The Company agreed to pay Harvard

a total amount of $609,375 payable in 3 instalments of which $304,686 remains payable as of March 31, 2021.

January 21, 2021, the Company entered into a sponsored research agreement with Johns Hopkins Bloomberg School of Public Health

to accelerate the development of next-generation saliva-based diagnostic tests.

The Company is collaborating with the Bloomberg

School of Public Health to optimise the collection of saliva and monitoring of diverse biomarkers across a number of modalities

including clinical chemistry and infectious diseases.

Johns Hopkins intend to utilise biosensor products to conduct in-field epidemiological

The Company agreed to pay Johns Hopkins a total amount of $423,589 as a part of this sponsored research agreement of

which all remains payable as of March 31, 2021.

Company has no other material future minimum lease commitments or purchase commitments.

January 21, 2021, the Company entered into a sponsored research agreement with Johns Hopkins Bloomberg School of Public Health to accelerate

the development of next-generation saliva-based diagnostic tests.

The Company is collaborating with the Bloomberg School of Public Health

to optimize the collection of saliva and monitoring of diverse biomarkers across a number of modalities including clinical chemistry

and infectious diseases.

Johns Hopkins intend to utilize biosensor products to conduct in-field epidemiological studies.

agreed to pay Johns Hopkins a total amount of $ 423,589 as a part of this sponsored research agreement of which $ 105,897 remains payable

as of September 30, 2021.

During February 2021 the Company signed a

deed of confirmation and variation with the University of Newcastle for the research and development of the Saliva Glucose Biosensor

and the SARS-COV-2 Antibody Biosensor.

The Company agreed to pay the University of Newcastle $ 2,054,880

of which $ 841,913

remains payable as of September 30, 2021.

Company has no material future minimum lease commitments or purchase commitments.

time to time, the Company may become a party to various legal proceedings arising in the ordinary course of business.

information currently available, the Company is not involved in any pending or threatened legal proceedings that it believes could

reasonably be expected to have a material adverse effect on its financial condition, results of operations or liquidity.

legal matters are inherently uncertain, and the Company cannot guarantee that the outcome of any potential legal matter will be

favorable to the Company.

Based on information

currently available, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be

expected to have a material adverse effect on its financial condition, results of operations or liquidity.

However, legal matters are

inherently uncertain, and the Company cannot guarantee that the outcome of any potential legal matter will be favorable to the Company.

Company shall file its income tax returns with the Internal Revenue Service and Australian Taxation Office.

The Company has net operating

losses carried forward of $ 29,590,918 which are derived from its operations in Australia and the US and are available to reduce future

taxable income.

Such loss carry forwards may be carried forward indefinitely, subject to compliance with tests of continuity and additional

net operating loss carried forward gives rise to a deferred tax asset of approximately $ 7,219,880 .

However, the Company has determined

that a valuation allowance of $ 7,219,880 against such deferred tax asset is necessary, as it cannot be determined that the carry forwards

will be utilized.

LOSS PER SHARE

loss per common share is computed by dividing net loss allocable to common stockholders by the weighted average number of shares

of common stock or common stock equivalents outstanding.

Diluted loss per common share is computed similar to basic loss per common

share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common

stock were exercised or converted into common stock.

Three Months Ended

Nine Months Ended

March 31, 2021

March 31, 2020

March 31, 2021

March 31, 2020

loss per common share is computed by dividing net loss allocable to common shareholders by the weighted average number of shares of common

stock or common stock equivalents outstanding.

Diluted loss per common share is computed similar to basic loss per common share except

that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised

or converted into common stock.

SCHEDULE OF BASIC LOSS PER COMMON SHARE POTENTIAL DILUTIVE SECURITIES

Three Months Ended September 30,

Net loss attributable to GBS, Inc.

1 unchanged sentence

$ ( 1,072,510 )

$ (2,706,760 )

Basic and diluted net loss per share attributed to common shareholders

Weighted-average number of ordinary shares

following outstanding warrants, options and preferred shares were excluded from the computation of diluted net loss per share

for the periods presented because their effect would have been anti-dilutive:

Three Months Ended

Nine Months Ended

March 31, 2021

March 31, 2020

March 31, 2021

March 31, 2020

Weighted-average number of shares outstanding

following outstanding warrants and preferred shares were excluded from the computation of diluted net loss per share for the periods

presented because their effect would have been anti-dilutive:

SCHEDULE OF ANTI-DILUTIVE WARRANTS

Three Months Ended September 30,

Warrants - Series A

2 unchanged sentences

Pre IPO warrants

Warrants issued to parent entity

Warrants issued to LSBD

Preferred stock - Series A

Preferred stock - Series B

SUBSEQUENT EVENTS

to March 31, 2021 and through to the date of this filing, a total of 500,000 Series B Convertible Preferred Stock was converted

into common stock.

Each share of Series B Convertible Preferred Stock is convertible into 1 share of the Company’s common

Subsequent to March 31, 2021 and through

to the date of this filing, a total of 800 Series B Warrants were exercised to purchase one Common Stock per Warrant in a cashless

exercise provision as described in Company’s Registration Statement on Form S-1, File No.

333-252277 on file with the U.S.

Securities and Exchange Commission (the “SEC”).

Management’s Discussion and Analysis of Financial Condition and Result of Operations

should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated

financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

This discussion and other parts of this report contain forward-looking statements.

These forward-looking statements involve a number

of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be

materially different from those expressed or implied by these forward-looking statements.

These forward-looking statements involve a

number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance

to be materially different from those expressed or implied by these forward-looking statements.

Our forward-looking statements include,

but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies

regarding the future.

In addition, any statements that refer to projections, forecasts or other characterizations of future events or

circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,”

“believe,”

“continue,”

“could,”

“estimate,”

“expect,”

“intends,”

“may,”

“might,”

“plan,”

“possible,”

“potential,”

“predict,”

“project,”

“should,”

“would”

and similar expressions may identify forward-looking statements, but the absence of these words

does not mean that a statement is not forward-looking.

Factors that might cause or contribute to such forward-looking statements include,

but are not limited to, those set forth in the Risk Factors section of the Company’s registration statement and prospectus for

the Company’s initial public offering filed with the SEC.

The following discussion should be read in conjunction with our financial

statements and related notes thereto included elsewhere in this report.

We are a biosensor diagnostic technology

company developing our SARS COV2 antibody (“COV2”) test for the world market, the Saliva Glucose

Biosensor (“SGB”) for the Asia-Pacific region (“APAC”) and have a 50% interest for the North America

This the prelude to a biosensor platform comprising of biochemistry, immunology, tumor markers, hormones, and

nucleic acid diagnostic modalities.

We were incorporated under the laws of Delaware on December 5, 2016.

Our headquarters are

We were formed to provide a non-invasive, pain free innovation to make it easier for people to manage diabetes

using the Company’s SGB and, together with the software app that interfaces the SGB with the Company’s digital

information system, the “SGT”).

currently are a 48.7%-owned (by voting rights) affiliate of Life Science Biosensor Diagnostics Pty Ltd (“LSBD”), an

Australian company that owns the worldwide intellectual property rights to the biosensor platform from University of Newcastle,

LSBD has licensed to us that technology for us to introduce and launch the platform in the APAC Region.

We will commence

this process with the SGT.

objective is to introduce and launch a COV2 test globally and then the SGB, the second of our diagnostic tests that stem from

the Biosensor Platform that we license, in the APAC Region.

In the next four years we intend on developing the platform to its

full capacity testing across the following diagnostic modalities:

immunology, hormones, chemistry, tumour markers and nucleic

believe that the COVID-19 pandemic is likely to remain with us for many years.

Development of an improved antibody assays

to detect prior infection with SARS-CoV-2 has been identified as one of the top unmet needs in the ongoing COVID-19 pandemic response.

Precise knowledge of SARS-CoV-2 infection at the individual level can potentially inform clinical decision-making, whereas at

the population level, precise knowledge of prior infection, immunity, and attack rates (particularly asymptomatic infection) is

needed to prioritize risk management decision-making about social distancing, treatments, and vaccination.

If saliva can support

measurements of both the presence of SARS-CoV-2 RNA26-28 as well as antibodies against SARS-CoV-2, this sample type could provide

an important opportunity to monitor individual and population-level SARS-CoV-2 transmission, infection, and immunity dynamics

over place and time.

anticipate there to be 3 different applications for the foreseeable future:

Screening - SARS-CoV-2 antibody testing is urgently needed to estimate the incidence and prevalence of SARS-CoV-2 infection

at the general population level.

Precise knowledge of population immunity could allow government bodies to make informed decisions

about how and when to relax stay-at-home directives and to reopen the economy.

The COV2 Biosensor test can be used as a complement to the (RNA) virus detection tests for patients presenting late

after symptoms onset to healthcare facilities and where virus detection tests are negative despite strong indications of infection.

In addition, they can potentially be used for informing the decision on discharge of patients who recovered from SARS-CoV-2

infection but remain RNA-positive by RT-PCR for a long time after symptoms have subsided.

The degree of protective immunity

conferred by or correlated with the antibodies detected in subjects with past SARS-CoV-2 infection is still under investigation.

Once this is clarified, the COV 2 antibody tests could be, together with the (RNA) direct virus detection, an essential tool

in de-escalation strategies.

Currently antibody tests are used for sero-epidemiological surveys and studies.

vaccination screening - To assess the degree of the elicited potent antigen-specific antibody responses, to COV2 vaccines

when developed and administered to humans.

on a recent paper publicly available and authored by the team at Johns Hopkins Department of Environmental Health and Engineering,

Bloomberg School of Public Health, results indicate it is feasible to accurately measure the salivary IgG response to identify

individuals with a prior SARS-CoV-2 infection.

A saliva-based approach could serve as a non-invasive approach for accurate and

large-scale SARS-CoV-2 “sero”-surveillance.

saliva antibody test can greatly increase the scale of testing—particularly among susceptible populations—compared

to blood and could clarify population immunity and susceptibility to SARS-CoV-2.

The team at John Hopkins further demonstrated

in the laboratory that when saliva was collected ≥10 days post symptom onset, the anti-SARS-CoV-2 IgG assay detects SARS-CoV-2

infection with 100% sensitivity and 99% specificity.

In addition, the team demonstrated that the temporal kinetics of SARS CoV-2-specific

IgG responses in saliva are consistent with those observed in serum and indicate that most individuals seroconvert approximately

10 days after COVID-19 symptom onset or approximately two weeks post-presumed infection.

utilizing the biosensor platform for detecting COV2 we expect to have lower detection limits, improve on sensitivity and specificity

characteristics of current diagnostic methods, be able to provide real time results at the point of care and provide quantitative

results as opposed to negative or positive which is how other POCT report the results.

and scalable point-of-care (POC) tests for the diagnosis of COVID-19 would increase the scope for diagnosis to be made in the

community and outside the laboratory setting.

They would have the potential to reduce the time to obtaining an actionable result,

could support early identification of those with COVID-19 and could also support appropriate use of isolation resources, infection

control measures, and recruitment into clinical trials of treatments.

are progressing with the milestone of integrating Harvard University’s technology with our biosensor applications for SARS-Cov-2

antibody test for COVID-19 by entering on January 5, into a Research Collaboration Agreement with Harvard College for the purposes

of facilitating mutual collaboration in scientific research in connection with the Company’s non-exclusive royalty free

license to combat COVID-19 coronavirus.

The contemplated collaboration includes research teams from the Company and Harvard and

will include, among others, exchange of materials and research data.

Company has not generated any revenues to date.

As such, the Company is subject to all of the risks associated with emerging growth

Since inception, the Company has incurred losses and negative cash flows from operating activities.

The Company does

not expect to generate positive cash flows from operating activities in the near future until such time, if at all, the Company

completes the development process of its products, including regulatory approvals, and thereafter, begins to commercialize and

achieve substantial acceptance in the marketplace for the first of a series of products in its medical device portfolio.

Quarter Developments

December 14, 2020, the Company agreed to issue to LSBD, in consideration of LSBD’s contribution towards the research and

development of applications other than glucose and COVID-19 applications to a maximum of $2 million over a 5-year period, a 5-year

non-transferable warrant to purchase 3,000,000 shares of the Company’s common stock at the exercise price of $17.00 per

December 18, 2020, the Company entered into an Exchange Agreement (the “EA”) with LSBD to exchange 3,000,000 shares

of its common stock held by LSBD for 3,000,000 shares of the Company’s Series B Convertible Preferred Stock.

the parties to the Exchange Agreement entered into a Registration Rights Agreement (the “RRA”) pursuant to which the

Company agreed to prepare and file within 30 days following the closing of the IPO with the Securities and Exchange Commission

a registration statement to register for resale the shares of Common Stock issuable upon conversion of the Series B Convertible

Preferred Stock.

If and to the extent the Company fails to, among other things, file such resale registration statement or have

it declared as required under the terms of the RRA, the Company will be required to pay to the holder of such registration rights

partial liquidated damages payable in cash in the amount equal to the product of 1.0% multiplied by the aggregate purchase price

paid by such holder pursuant to the EA.

The EA and the RRA contain customary representations, warranties, agreements and, indemnification

rights and obligations of the parties.

December 18, 2020, LSBD entered into a certain Purchase and Assignment Agreement (the “PAA”) with an institutional

accredited investor (the “Purchaser”) pursuant to which LSBD sold and assigned to the Purchaser 3,000,000 shares of

the Series B Convertible Preferred Stock and assigned to the Purchaser its rights under the EA and the RRA with respect to such

preferred shares for a total purchase price of $2,000,000.

The investor’s Series B Convertible Preferred Stock is convertible

into 3,000,000 shares of the Company’s common stock, subject to beneficial ownership limitation.

Quarter Developments

Point-of-Care Test Commercialization Ecosystem Established

approval from the Harvard Longwood campus Institutional Review Board (IRB) to commence

a validation study to test clinical samples from a COVID-19 repository and to commence

clinical studies on the COVID-19 Antibody Biosensor;

and aligned with word-class institutions, Johns Hopkins University, The Wyss Institute for Biologically Inspired Engineering,

and the University of Newcastle for the development of saliva-based POCTs for both glucose monitoring and COVID-19 antibody

new top-tier members to GBS’s scientific team to formulate and execute its commercialization plan.

Key Developments

Commenced research protocols with The Wyss Institute for

Biologically Inspired Engineering to progress with the milestone of integrating this technology with the Company’s Biosensor

for SARS-Cov-2 antibody tests;

Initiated study for the salivary collection protocol with

Johns Hopkins University, Bloomberg School of Public Health;

Completed technical optimization of the Wyss’s eRapid

assay performance in relation to SARS-Cov-2 antibody detection at The Wyss Institute to align with the fastest antibody tests

currently on market using clinical samples.

Key Developments

a clinical plan for regulatory submission and subsequent approval with Precision Medicine Architects, LLC;

Commenced global

voice of customer survey with Precision Medicine Architects, LLC as part of the process to finalize product development of

the device and usability;

Further development

of prototyping for middleware and smart phone application;

Executed option

agreement to acquire the rights to use, make, market, sell and offer to sell Products under the Intellectual Property Rights

in the Glucose Field in the North American market for the Saliva Glucose Biosensor .

the quarter ended March 31, 2021, Series A and Series B warrants held by certain shareholders were exercised.

is convertible into 1 share of the Company’s common stock.

A total of 58,600 Series A warrants and 1,400,195 Series

B warrants were exercised and converted into common stock.

March 31, 2021, GBS entered into an agreement with LSBD to provide GBS an option to acquire an exclusive license to use LSBD’s

intellectual property in the treatment or management of diabetes field in North America (the “Option Agreement”).

The Option Agreement has a term of two years and the exercise price for the option is $5 million.

to March 31, 2021, a total of 500,000 Series B Convertible Preferred Stock was converted into common stock.

Each share of Series

B Convertible Preferred Stock is convertible into 1 share of the Company’s common stock as described in the Company’s

Registration Statement on Form S-1, File No.

333-242277 with the U.S.

Securities and Exchange Commission.

public offering & share structure

December 28, 2020, the Company closed its initial public offering (“IPO”) and sold 1,270,589 units, consisting of

(a) one share of the Company’s common stock (or, at the purchaser’s election, one share of Series B Convertible Preferred

Stock), (b) one Series A warrant (the “Series A Warrants”) to purchase one share of the Company’s common stock

at an exercise price equal to $8.50 per share, exercisable until the fifth anniversary of the issuance date, and (c) one Series

B warrant (the “Series B Warrants”) to purchase one share of the Company’s common stock at an exercise price

equal to $17.00 per share, exercisable until the fifth anniversary of the issuance date and subject to certain adjustment and

cashless exercise provisions.

The public offering price of the shares sold in the IPO was $17.00 per unit.

In aggregate, the units

issued in the offering generated $17,732,448 in net proceeds, which amount is net of $1,714,001 in underwriters’

and commissions, and $2,153,564 in offering costs.

The Company also issued to the underwriter an option, exercisable one or more

times in whole or in part, to purchase up to 190,588 additional shares of common stock and/or Series A Warrants to purchase up

to an aggregate of 190,588 shares of common stock and/or Series B Warrants to purchase up to an aggregate of 190,588 shares of

common stock, in any combinations thereof, from us at the public offering price per security, less the underwriting discounts

and commissions, for 45 days after the date of the IPO to cover over-allotments, if any (the “Over-Allotment Option”).

the closing of the IPO, all shares of preferred stock then outstanding were automatically converted into 2,810,190 shares of common

stock, and all convertible notes then outstanding were automatically converted into 710,548 shares of common stock.

preferred shareholders were issued warrants that, following the Company’s completed IPO, allow the holder to acquire 2,736,675

shares of common stock at the IPO price during years two through three following the IPO.

At exercise date, the shareholder must

hold for each warrant to be exercised, one underlying common share to exercise the option.

The warrants are not transferable and

apply to the number of shares that were subscribed for.

the share structure as of May 12, 2021 are as follows:

of Issued Common Stock

of Series A warrant exercisable at $8.50

of Series B warrants exercisable at $17 (subject to a cashless

exercise provision)

of Warrants issued to the underwriter exercisable at $18.70

of the Pre-IPO Warrants exercisable at $8.50 (during year two through to year three after the IPO)

Warrants issued to LSBD exercisable at $17

Preferred Stock-Series B

of Operations:

of the Three and Nine Months Ended March 31, 2021 and 2020

support income

support income increased by $34,290 to $34,290 from $0 for the three months ended March 31, 2021 compared to same period in 2020.

This increase was primarily attributable to GBS Inc.’s subsidiary companies receiving COVID-19 related government

support in the current period where the companies are located (The purpose of the grant is to support companies in managing its

business and payroll costs during the COVID-19 pandemic).

support income increased by $372,754 to $372,754 from $0 for the nine months ended March 31, 2021 compared to same period in 2020.

This increase was primarily attributable to GBS Inc.’s subsidiary companies receiving Research and Development tax

The purpose of the grant is to incentivize companies with their research and development related activities

and other COVID-19 related government support in the current period where the companies are located.

service revenue was $0 and $(1,533) for the three months ended March 31, 2021 and 2020, respectively, and $0 and $119,744 for

the nine months ended March 31, 2021 and 2020, respectively.

Shared service revenue is mainly attributable to the recovery of

costs from related parties.

There were no shared services in the current period.

and administrative expenses

and administrative expenses increased by $959,547 to $1,013,389 from $53,842 for the three months ended March 31, 2021 compared

to the same period in 2020.

This increase was primarily driven by an increase in operational activities following completion of the IPO in the current period (December

and administrative expenses increased by $453,660 to $2,205,842 from $1,752,182 for the nine months ended March 31, 2021

compared to the same period in 2020.

This increase was attributable to an increase in operational activities following completion

of the IPO in the current period (December 2020).

the Company’s operating activities increase, we expect its general and administrative costs will include additional costs

in overhead contribution, consultancy, and travel expenses.

and regulatory expenses

and regulatory expenses increased by $2,215,141 to $2,156,316 from $(58,825) for the three months ended March 31, 2021

compared to the same period in 2020.

This increase is primarily driven by funding availability since completion of the IPO

in December 2020 that has allowed the Company to progress on its milestones, as well as a $500,000 option that the Company expensed

on the basis that there is no FDA approval of the intellectual property held by LSBD.

and regulatory expenses increased by $1,988,051 to $2,529,074 from $541,023 for the nine months ended March 31, 2021 compared to the

same period in 2020.

This increase is primarily driven by funding availability

since completion of the IPO in December 2020 that has allowed the Company to progress on its milestones, as well as a $500,000 option

that the Company expensed on the basis that there is no FDA approval of the intellectual property held by LSBD.

the Company’s operating activities increase, we expect its development and regulatory expenses to increase in future periods.

and capital raising expenses

and capital raising expenses decreased by $27,174 to $5,100 from $32,274 for the three months ended March 31, 2021 as compared

to the same period in 2020.

This decrease was attributable to minimal expenditures required by us in the current period having

completing our IPO in December 2020.

and capital raising expenses increased by $184,035 to $358,674 from $174,639 for the nine months ended March 31, 2021 as compared

to the same period in 2020, respectively.

This increase was attributable to majority of final expenditures required by us in the

current period to successfully complete the IPO in December 2020.

income and expenses

expense decreased $63,744 to $18,561 from $82,305 for the three months ended March 31, 2021 as compared to the same period in

This decrease was attributable to the conversion of convertible notes into common stock at completion of the IPO.

expense increased $710,288 to $1,091,249 from $380,961 for the nine months ended March 31, 2021 as compared to the same period

This increase was attributable to the non-cash recognition of a beneficial conversion feature associated with convertible

notes, offset by conversion of convertible notes into common stock that occurred at IPO.

(income) from unconsolidated equity method investment

(income) from unconsolidated equity method investment was $0 for the three months ended March 31, 2021 and 2020, respectively.

from unconsolidated equity method investment increased $135,692 to $135,692 from $0 for the nine months ended March 31, 2021 compared

to the same period in 2020.

This increase was attributable to the reduction in the carrying amount of its investment in BiosensX

(North America) Inc.

foreign exchange gain (loss)

foreign exchange gain was $8,774 for the three months ended March 31, 2021 compared to $0 for the same period in 2020.

This increase

was attributable to the favorable foreign exchange translations upon settling payments in foreign currency.

foreign exchange loss was $270,333 for the nine months ended March 31, 2021 compared to $0 the same period in 2020.

This increase

was largely attributable to the unfavorable foreign exchange translations on capital raisings from AUD to USD.

tax (expense) benefit

was no income tax expense for the three and nine months ended March 31, 2021 and 2020 as the Company has established a full valuation

allowance for all of its deferred tax assets.

comprehensive income

currency translation gain/(loss)

foreign currency translation gain/(loss) increased by ($362,953) to ($262,032) from $100,921 for the three months ended March

31, 2021 as compared to the same period in 2020.

It is calculated based on the Company’s unsettled transactions and balances

in currencies other than its functional currency.

foreign currency translation gain/(loss) increased by ($250,615) to ($278,744) from ($28,129) for the nine months ended March

31, 2021 and 2020, respectively.

It is calculated based on the Company’s unsettled transactions and balances in currencies

other than its functional currency.

loss increased by $3,031,560 to $3,142,667 from $111,107 for the three months ended March 31, 2021 compared to the same

period in 2020.

This overall increase was largely attributable to further progression on regulatory and development milestones and increased

expenditure on general and administrative expenses with funding secured by the IPO.

Further contributing to this movement was an option

fee of $500,000 to acquire an exclusive license for LSBD’s intellectual property, $268,457 in overhead reimbursements reversed,

as well as changes in the foreign currency exchange rate between AUD and USA due to COVID-19, both within the same period in 2020.

loss increased by $3,481,001 to $6,209,971 from $2,728,970 for the nine months ended March 31, 2021 compared to the same

period in 2020.

This overall increase was largely attributable to the non-cash recognition of a beneficial conversion feature,

an option fee to acquire an exclusive license for LSBD’s intellectual property and

increased expenditure on general and administrative expenses and further progression on regulatory and development milestones

with funding secured by the IPO.

and Capital Resources

our inception, our operations have primarily been financed through the issuance of our common stock, redeemable convertible preferred

stock and the incurrence of debt.

As of March 31, 2021, we had $14,261,622 in cash and cash equivalents and $15,026,877

in working capital.

“Initial public offering”

herein for details about our IPO.

to our management’s estimates, based on our budget and proposed schedules of development, approvals and organization, we

believe, although there can be no assurances, that after our IPO we will have sufficient capital resources to enable us to continue

to implement our business plan and remain in operation for at least 30 months.

During this time, we expect to use the net proceeds

available to us for the following purposes:

obtain regulatory approvals and establish manufacturing capacities necessary for marketing of the SGT;

market the SGT and establish a distribution network in the APAC Region;

working capital and general corporate purposes.

do not anticipate generating any revenue commencing in the vicinity of 6-10 months from the date of this report, if at all, and

our revenues will not immediately be sufficient to finance our ongoing operations.

In addition, available resources may be consumed

more rapidly than currently anticipated, and there can be no assurance that we will be successful in developing the SGT and generating

sufficient revenue in the timeframe set forth above, or at all.

We may be unable to meet our targets for regulatory approval and

market launch, or we may be unable to generate anticipated amounts of revenue from sales of the system.

We may also need additional

funding for developing new products and services and for additional sales, marketing and promotional activities.

Should this occur,

we may need to seek additional capital earlier than anticipated.

the event we require additional capital, there can be no assurances that we will be able to raise such capital on acceptable terms,

Failure to generate sufficient revenues or raise additional capital through debt or equity financings, or through collaboration

agreements, strategic alliances or marketing and distribution arrangements, could have a material adverse effect on our ability

to meet our long-term liquidity needs and achieve our intended long-term business plan.

Our failure to obtain such funding when

needed could create a negative impact on our stock price or could potentially lead to a reduction in our operations or the failure

of our company.

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise

required under this item.

Transition Period for “Emerging Growth Companies”

have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1)

of the JOBS Act.

This election allows us to delay the adoption of new or revised accounting standards that have different effective

dates for public and private companies until those standards apply to private companies.

As a result of this election, our financial

statements may not be comparable to companies that comply with public company effective dates.

Because our financial statements

may not be comparable to companies that comply with public company effective dates, investors may have difficulty evaluating or

comparing our business, performance or prospects in comparison to other public companies, which may have a negative impact on

the value and liquidity of our common stock.

Sheet Arrangements

March 31, 2021, we have not entered into any off-balance sheet arrangements as defined by applicable SEC regulations.

Accounting Policies, Significant Judgments and Use of Estimates

financial statements have been prepared in accordance with U.S.

generally accepted accounting principles, or GAAP.

The preparation

of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities,

the disclosure of contingent assets and liabilities at the date of the financial statements and the reported expenses incurred

during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe

are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets

and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different

assumptions or conditions.

We believe that the accounting policies discussed below are critical to understanding our historical

and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

critical accounting policies are described under the notes to the unaudited condensed consolidated financial statements included

in “Part I, Item 1 —

Financial Statements”

of this Quarterly Report on Form 10-Q.

During the nine months ended

March 31, 2021, except as described in Note 3 to the unaudited interim condensed financial statements appearing elsewhere in this

Quarterly Report on Form 10-Q, there were no material changes to our critical accounting policies from those discussed in our

final prospectus filed on December 18, 2020.

Accounting Pronouncements

“Recent Accounting Pronouncements”

in Note 3 to our consolidated financial statements included elsewhere in this Quarterly

Report on Form 10-Q for additional information.

Quantitative and Qualitative Disclosures about Market Risk

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise

required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements