What changed in this filing

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Item 1. Financial Statements

2022-02-11 compared with 2021-11-12 · 367 added, 249 removed, 250 unchanged (71% of the section changed)

1 unchanged sentence

Consolidated Balance Sheets

September 30, 2021

June 30, 2021

Current assets:

Cash and cash equivalents

Grant receivable, current portion

Research and development tax incentive receivable

Other current assets

Cash and cash

Grant receivable, current

Research and development

tax incentive receivable

current assets

Total current assets

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Other non-current assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES AND SHAREHOLDERS’

Current liabilities:

Accounts payable and accrued expenses

Accounts payable and accrued

Related party payables

Current portion of deferred grant income

Current employee benefit liabilities

Current portion of deferred

employee benefit liabilities

Total current liabilities

Employee benefit liabilities

Long-term deferred grant income

Long-term deferred grant

Total liabilities

1 unchanged sentence

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

Preferred stock, $ 0.01

par value, 10,000,000

shares authorized, 0

and 1,300,000

shares issued and outstanding at December 31, 2021 and June

30, 2021, respectively

Common stock, $ 0.01

par value, 100,000,000

shares authorized, 14,882,522

and 13,582,122

shares issued and outstanding at December 31, 2021 and June

30, 2021, respectively

Additional paid-in capital

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( 22,869,803 )

Accumulated other comprehensive loss

Total consolidated Group equity

Non-controlling interest

Total shareholders’ equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

other comprehensive loss

Total consolidated GBS

Non-controlling

shareholders’ equity

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

Three Months Ended September 30,

Consolidated Statements of Operations and Other Comprehensive Income/ (Loss)

Other income:

Government support income

Total revenues

support income

Operating expenses:

General and administrative expenses

Development and regulatory approval expenses

Prospectus and capital raising expenses

Total operating expenses

General and administrative

Development and regulatory

and capital raising

operating expenses

Loss from operations

( 3,466,635 )

( 4,905,954 )

( 1,580,321 )

Other income (expense):

Interest expense

Loss from unconsolidated equity method investment

Realized foreign exchange loss

Interest income

Total other income (expense)

( 1,072,688 )

Loss from unconsolidated

equity method investment

Realized foreign exchange

other income (expense)

( 1,073,063 )

( 1,486,983 )

Loss before income taxes

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( 3,067,304 )

Net loss attributable to non-controlling interest

Net loss attributable to GBS, Inc.

( 3,463,823 )

( 1,990,389 )

Other comprehensive loss, net of tax:

Foreign currency translation loss

Total other comprehensive loss

( 4,901,663 )

( 3,067,304 )

loss attributable to non-controlling interest

loss attributable to GBS Inc.

$ ( 3,459,998 )

$ ( 1,983,964 )

$ ( 4,892,650 )

$ ( 3,056,474 )

Other comprehensive gain (loss), net of tax:

currency translation gain (loss)

other comprehensive gain (loss)

Comprehensive loss

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( 1,956,533 )

Comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to GBS, Inc

( 4,961,790 )

( 3,084,016 )

Comprehensive

loss attributable to non-controlling interest

Comprehensive

loss attributable to GBS Inc

$ ( 3,452,643 )

$ ( 1,950,108 )

$ ( 4,952,777 )

$ ( 3,073,186 )

Net loss per share, basic and diluted

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Consolidated Statements of Changes in Shareholders’ Equity

Preferred stock

Additional paid in

Other comprehensive

Non- controlling

Total shareholders’ equity

comprehensive

shareholders’

Balance, June 30, 2021

1 unchanged sentence

$ ( 661,260 )

Series B warrants exercised to purchase common shares

Conversion of convertible preferred shares into common shares

Issuance of common stock at

initial public offering

Issuance of common stock at

initial public offering , shares

Issuance cost of common stock

at initial public offering

Cancellation of common stock

in exchange for preferred shares

Cancellation of common stock

in exchange for preferred shares , shares

Conversion of convertible notes

into common stock at initial public offering

of convertible notes into common stock at ini tial public offering, shares

Conversion of convertible preferred

shares into common stock at initial public offering

Conversion of convertible preferred

shares into common stock at initial public offering , shares

Beneficial conversion feature

Series A warrants exercised

to purchase common shares

Series A warrants exercised

to purchase common shares, shares

Series A and B warrants acquired

Series B warrants exercised

to purchase common shares

Conversion of convertible preferred

shares into common shares

( 1,300,000 )

Foreign currency translation loss

Issuance of convertible preferred shares

Issuance of convertible preferred shares, shares

Foreign currency translation

( 1,432,652 )

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( 24,302,455 )

Foreign currency translation

( 3,459,998 )

( 3,463,823 )

Balance, December 31,

$ ( 27,762,453 )

$ ( 721,387 )

Balance, June 30, 2020

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Issuance of convertible preferred shares

Foreign currency translation loss

Foreign currency translation

( 1,072,510 )

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( 3,047,566 )

Issuance of common stock at

initial public offering

Issuance cost of common stock

at initial public offering

( 3,867,565 )

Cancellation of common stock

in exchange for preferred shares

( 3,000,000 )

Conversion of convertible

notes into common stock at initial public offering

Conversion of convertible preferred

shares into common stock at initial public offering

( 2,810,190 )

Beneficial conversion feature

Series A warrants exercised

to purchase common shares

Series A and B warrants acquired

Foreign currency translation

( 1,983,964 )

( 1,990,389 )

Balance, December 31,

$ ( 18,888,991 )

$ ( 380,663 )

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

Consolidated Statements of Cash Flows

Three Months Ended September 30,

Cash flows from operating activities:

Months Ended December 31,

Cash flows from operating

$ ( 4,901,663 )

$ ( 3,067,304 )

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

Non-cash loss on foreign currency translation, net

Adjustments to reconcile

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

Non-cash gain (loss) on

foreign currency translation, net

Loss on investment in affiliate

Non-cash other operating activities

Changes in operating assets and liabilities:

Contingent beneficial conversion

feature on convertible notes

Non-cash research and development

Non-cash other operating

Changes in operating assets

and liabilities:

Grant receivable

Research and development

tax incentive receivable

Other current assets

Accounts payable

Accounts payable - related party

Accounts and other payables

Accounts payable - related

( 1,337,672 )

Other long-term liabilities

Net cash provided by (used in) operating activities

long-term liabilities

cash provided by (used in) operating activities

( 1,342,605 )

Cash flows from financing activities:

Proceeds from issuance of preferred stock

Net cash provided by financing activities

Effect of foreign exchange rates on cash and cash equivalents

Increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Non-cash investing and financing activities

Conversion of preferred shares into common shares

Supplemental disclosure of cash flow information:

( 3,454,231 )

Cash flows from financing

Proceeds from issuance

Proceeds from warrant holders

for common shares

Proceeds from issuance

of preferred stock

Proceeds from initial public

of equity issuance costs

( 2,003,952 )

cash provided by financing activities

Effect of foreign exchange

rates on cash and cash equivalents

(Decrease)/Increase in

cash and cash equivalents

( 1,383,063 )

and cash equivalents, beginning of period

and cash equivalents, end of period

Non-cash investing and financing

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

Supplemental disclosure

of cash flow information:

Cash paid for income taxes

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Our headquarters are located in New York.

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

are a biosensor diagnostic technology company operating across the Asia-Pacific Region (the “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.

modalities, and worldwide with our SARS-CoV-2 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 the “Licensor”), in our regions and the SARS-CoV-2 test

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.

of December 31, 2021, GBS Inc, is an 18.5 % 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.

one year of the date of filing of this Quarterly Report on Form 10-Q with the SEC.

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.

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.

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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 ,

Company incurred a net loss of $ 3,463,823

and $ 4,901,663

for the three and six months ended December 31,

2021, respectively (net loss of $ 1,990,389

and $ 3,067,304

for the three and six months ended December 31,

2020, respectively).

At December 31, 2021, the Company has shareholders’ equity of $ 10,044,831 ,

working capital of $ 10,075,538 ,

and an accumulated deficit of $ 27,762,453 .

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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.

Company’s unaudited condensed 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 unaudited condensed 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 unaudited

condensed consolidated financial statements are prepared on the going concern basis.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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”).

Accordingly, our unaudited 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 and six months ended December 31, 2021, are not necessarily indicative of the results that may be expected for the year ending

June 30, 2022.

The accompanying unaudited condensed consolidated financial statements and related footnote disclosures should be read

in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the year ended June 30, 2021,

which was filed with the U.S.

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.

accompanying unaudited condensed consolidated financial statements include the accounts of the Company, all wholly owned and majority-owned

subsidiaries in which the Company has a controlling voting interest and, when applicable, variable interest entities in which the Company

has a controlling financial interest or is the primary beneficiary.

Investments in affiliates where the Company does not exert a controlling

financial interest are not consolidated.

significant intercompany transactions and balances have been eliminated upon consolidation.

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those estimates.

Reclassifications

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

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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.

and regulatory approval costs

relating to R&D are expensed as incurred and recorded in development and regulatory approval in the Condensed Consolidated Statements

of Operations and Other Comprehensive Loss.

R&D expenses include external expenses incurred under arrangements with third parties;

salaries and personnel-related costs;

license fees to acquire in-process technology and other expenses.

The Company recognizes the benefit

of refundable R&D tax refunds as a R&D tax refund income when there is reasonable assurance that the amount claimed will be recovered

(refer to the R&D tax refund discussion below).

property acquired for a particular research and development project and that have no alternative future uses (in other research and development

projects or otherwise) are expensed in research and development costs at the time the costs are incurred.

certain circumstances, the Company may be required to make advance payments to vendors for goods or services that will be received in

the future for use in R&D activities.

In such circumstances, the non-refundable advance payments are deferred and capitalized, even

when there is no alternative future use for the R&D, until the related goods or services are provided.

In circumstances where amounts

have been paid in excess of costs incurred, the Company records a prepaid expense.

Company measures the R&D grant income and receivable by considering the time spent by employees on eligible R&D activities and

R&D costs incurred to external service providers.

The R&D tax refund receivable is recognized as an income as the Company believes

that it probable that the amount will be recovered in full through a future claim.

A total of $ 146,392 R&D tax refund income is recognized

in the other income during the current period.

currency translation

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is the United States dollar.

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

Foreign currency movements resulted in a gain of $ 7,355

and a loss of $ 60,127

for the three and six months ended December 31,

2021 respectively (a gain of $ 33,856

and a loss of $ 16,712

for the three and six months ended December 31,

2020, respectively).

accordance with the provisions of 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 December 31, 2021, the Company had no uncertain tax positions that qualified for either recognition or disclosure in the consolidated

financial statements.

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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.

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

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.

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.

have been incurred through to December 31, 2021 (December 31, 2020:

March 31, 2021, the Company entered into an agreement with LSBD to provide the Company an option to acquire an exclusive license to use

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

Agreement has a term of two years and the exercise price for the option is $ 5,000,000 .

The fee of $ 500,000 incurred for the option was

expensed in the period incurred.

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

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.

Proceeds from the grant will

be used primarily to reimburse the Company 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.

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 the Company.

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

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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.

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 six months ended

December 31, 2021 (no payments were received during the three months ended December 31, 2021) and $ 2.8 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

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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.

A total of $31,399

deferred grant income was recognized in other income during the current period.

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.

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

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

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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.

August 2020, the FASB issued ASU No.

2020-06, Debt – Debt with Conversion and Other Options (“ASU 2020-06”).

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

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.

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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.

2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

This update 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.

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

June 2016, the FASB issued ASU No.

2016-13 (Topic 326), Financial Instruments – Credit Losses (“ASU 2016-13”).

update (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 disclosures.

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 Smaller

Reporting Companies (“SRCs”) for fiscal years beginning after December 15, 2022, with early adoption permitted.

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

OTHER CURRENT ASSETS

1 unchanged sentence

SCHEDULE OF OTHER CURRENT ASSETS

September 30, 2021

June 30, 2021

Goods and services tax receivable

Other receivables

As of the year ended June 30, 2021, the

Company made $ 2,600,000

in prepayments for research and development.

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.

was 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 %

the R&D agreement with BiosensX North America Inc., dated April 20, 2021, in which LSBD also committed to fund $ 2,600,000 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.

and the Company towards any amounts owing between the Company and LSBD, including the exercise price of the option ($ 5,000,000 ) as included

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

the three months ended December 31, 2021, the Company assessed the current status of the R&D activities and determined that the most

likely outcome of the prepaid R&D contribution would be to be application against the exercise price in the Option Agreement and/or

future royalty payments due for the Glucose Biosensor intellectual property.

As this payment for the license of the Glucose Biosensor

intellectual property occurred prior to regulatory approval and there is no alternative future use, the prepayment of $ 2,600,000 has

been expensed as development and regulatory approval costs in the Condensed Consolidated Statements of Operations and Other Comprehensive

Loss during the current period.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

September 30, 2021

June 30, 2021

Accounts and other payables

SHAREHOLDERS’ EQUITY

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

of December 31, 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.

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.

2 unchanged sentences

RELATED-PARTY TRANSACTIONS

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:

to and purchases from related parties are made at normal market prices and on normal commercial terms.

The following transactions occurred

with LSBD during the period July 1, 2021 to December 31, 2021.

Company incurred a total cost of $ 26,081

and $ 145,733

during the three and six months ended December

31, 2021, respectively (three and six months ended December 31, 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.

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

Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

INVESTMENT IN AFFILIATE

16 unchanged sentences

through GBS Inc.

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

of December 31, 2021, LSBD holds 18.5 % 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:

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

SUMMARY OF AMOUNT RECORDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

June 30, 2021

Investment value

9 unchanged sentences

agreed to pay Johns Hopkins a total amount of $ 423,589 as a part of this sponsored research agreement of which $ 119,072 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.

as of December 31, 2021.

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.

of which $ 841,913 remains payable as of December 31, 2021.

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

6 unchanged sentences

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

The Company has operating

losses carried forward of $ 29,929,253

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 rules.

net operating loss carried forward gives rise to a deferred tax asset of approximately $ 6,456,938 .

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.

However, the Company has determined that a valuation

allowance of $ 6,456,938

against such deferred tax asset is necessary, as it cannot

be determined that the carry forwards will be utilized.

LOSS PER SHARE

5 unchanged sentences

SCHEDULE OF BASIC LOSS PER COMMON SHARE POTENTIAL DILUTIVE SECURITIES

Three Months Ended September 30,

Net loss attributable to GBS Inc.

1 unchanged sentence

$ ( 1,983,964 )

Basic and diluted net loss per share attributed to common shareholders

$ ( 4,892,650 )

$ ( 3,056,474 )

Basic and diluted net loss per share attributed

to common shareholders

Weighted-average number of shares outstanding

2 unchanged sentences

SCHEDULE OF ANTI-DILUTIVE WARRANTS

Three Months Ended September 30,

Warrants - Series A

2 unchanged sentences

Pre IPO warrants

Warrants issued to LSBD

Preferred stock - Series A

Warrants to LSBD

Preferred stock - Series B

Antidilutive securities excluded from computation of earnings per share, amount

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