What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-02-11 compared with 2021-11-12 · 149 added, 105 removed, 165 unchanged (61% of the section changed)

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should read the following discussion in conjunction with our audited historical consolidated financial statements, which are included

in the 2021 Form 10-K and our unaudited condensed consolidated financial statements for the fiscal quarter ended September 30, 2021 included

in the 2021 Form 10-K and our unaudited condensed consolidated financial statements for the fiscal quarter ended December 31, 2021 included

elsewhere in this Quarterly Report on Form 10-Q.

This Management’s Discussion and Analysis of Financial Condition and Results

of Operations contains statements that are forward-looking.

This Management’s Discussion and Analysis of Financial Condition and Results of

Operations contains statements that are forward-looking.

These statements are based on current expectations and assumptions that are

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See Part II, Item 1A.

“Risk Factors” of this Quarterly Report on Form

10-Q and Part I, Item 1A.

“Risk Factors” of this Quarterly Report on Form 10-Q and Part

“Risk Factors” of the 2021 Form 10-K.

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These forward-looking statements are subject to a number of risks, uncertainties

and assumptions, including those described in “Item 1A — Risk Factors” of this

Quarterly Report on Form 10-Q and in our 2021 Form 10-K.

and assumptions, including those described in “Item 1A — Risk Factors” of this Quarterly Report on Form 10-Q and in

our 2021 Form 10-K.

Moreover, we operate in a very competitive and rapidly changing environment.

New risks emerge from time to time.

It is not possible for our management to predict all risks, nor can we assess the impact of all factors

on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those

contained in any forward-looking statements we may make.

In light of these risks, uncertainties and assumptions, the future events and

trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those

anticipated or implied in the forward-looking statements.

It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent

to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking

statements we may make.

In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly

Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking

should not rely upon forward-looking statements as predictions of future events.

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testing in the hands of patients and their primary health practitioners at point of care.

We are 29.9% (as of September 30, 2021) owned

by LSBD, an Australian company that owns the worldwide intellectual property rights to the biosensor platform acquired from University

of Newcastle, Australia.

LSBD has licensed to us that technology to introduce and launch the platform in the APAC Region, the world license

for the SARS CoV-2 Antibody Sensor, and furthermore we own 50% of BiosensX (North America) Inc which has the North American license to

the biosensor platform.

are 18.5% (as of December 31, 2021) owned by LSBD, an Australian company that owns the worldwide intellectual property rights to the

biosensor platform acquired from University of Newcastle, Australia.

LSBD has licensed to us that technology to introduce and launch

the platform in the APAC Region, the world license for the SARS-CoV-2 Antibody Sensor, and furthermore we own 50% of BiosensX (North

America) Inc which has the North American license to the biosensor platform.

We were incorporated under the laws of Delaware on December

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initial priority is to develop & launch two urgently needed non-invasive real time diagnostic tests:

Saliva Glucose Biosensor and the

Antibody Biosensor

Saliva Glucose Biosensor, and

the SARS-CoV-2 Antibody

Saliva Glucose Biosensor (“SGB”), together with the software app that interfaces the SGB with the Company’s Digital

information system, the “SGT” is aimed to provide a non-invasive and pain free innovation.

innovative technology will aim to free people living with diabetes from having to use painful and invasive blood monitoring devices

to manage their condition, giving them a better quality of life.

Information System (“SGT”), the SGT aims to provide a non-invasive and pain free way to make it easier for people to manage

innovative technology aims to free people living with diabetes from having to use painful and invasive blood monitoring devices to

manage their condition, giving them a better quality of life.

SGB is being developed as a small, printable organic strip designed to put the power of accurate, timely diagnosis in the hands of

patients and their primary health practitioners.

is manufactured using modified reel-to-reel printing technology which allows mass volume printing at a low cost.

proposed three stage clinical plan currently involves

of prospective data from the recruitment of 20-40 patients.

The initial objective is to explore the relationship between salivary

glucose and plasma glucose as well as the time course between the two.

development of the algorithm between plasma and salivary glucose.

confirm the algorithm and generate data for regulatory submission.

GBS filed a Pre-Submission package on behalf of the group with the United States (US) Food and Drug Administration (FDA).

of this pre-submission is to confirm with the FDA that GBS is following the proper steps to conduct the clinical studies enabling it

to develop the glucose biosensor according to the FDA regulatory standards.

Commercialization

July 26 2021 we announced that we have engaged L.E.K Consulting Hong Kong Pty Limited to identify potential commercial partners in

the in the China region.

A short list of potential distributors that have a potential interest in the test has been identified, and

discussions will commence shortly to explore potential synergies.

announced previously, GBS was awarded $4.7m Australian Federal Government Science Grant for the establishment of an Australian high-tech

medical device manufacturing facility.

We are currently in the process finalizing the specifications of the proposed initial batch

of equipment for commissioning in Q4 2021 / Q1 2022

A clinical validation study was conducted at the Wyss Institute for Biologically

Inspired Engineering at Harvard University.

The objective of this study was to develop an electrochemical assay to detect SARS-CoV-2 IgG

in human plasma.

The statistical design of the study was powered in accordance with this study objective.

SGB is manufactured using modified reel-to-reel printing technology which allows

mass volume printing at a low cost.

Development Plan

December, GBS announced that its licensor, Life Science Biosensor Diagnostics (LSBD), has filed an application with the U.S.

and Drug Administration (FDA) for Breakthrough Device Designation.

Based on feedback from the FDA to LSBD further data generation

would be advisable in order to advance this submission.

The team is working towards this goal.

team has submitted the correlation clinical trial protocol for IRB approval to the Mills-Peninsula Medical Center (MPMC) in California

( which will be responsible for executing this initial clinical trial enrolling 40 subjects.) The objectives will be:

Explore the relationship

between salivary glucose and plasma glucose as well as the time course between the two testing modalities using Glucose Tolerance

Testing in 40 subjects

Generation of time course

date from these studies to determine salivary glucose characteristics

is anticipated that the first stage of this Clinical Plan to be completed by July 2022

Development and Manufacturing Advancements

for required equipment has commenced.

This sourcing has the dual purpose of immediately utilizing the equipment in the interests

of efficiency to progress development of the biosensor and at the same time commission this equipment in preparation for the facility.

The initial batch of the equipment is expected to be ordered in April and finalized in June 2022.

Discussions are underway between the University of Newcastle and GBS Inc for the location, buildout, and commissioning of the new high-tech

manufacturing facility.

response to the Australian government’s announcement of the Medical Research Commercialization Initiative, GBS is in the

process of evaluating and preparing expressions of interests towards further Australian Government funding, as we believe that GBS

firmly fits into the objectives of this initiative.

The initiative will focus on Early-Stage Translation and Commercialization

Support, which funds support for early stage medical research and medical innovation projects with commercial potential.

Research Future Fund will have available in total approximately $225 million (USD) of project funding over the next 10 years

for companies that meets the criteria.

Assurance and Regulatory Affairs

regulatory affairs plan is underway to address the Asian Pacific (APAC) region requirements

team is working closely with LSBD on its FDA submissions and the clinical development plan

Implementation

of new Quality Assurance (QA) system underway

of key suppliers in progress

clinical validation study was conducted at the Wyss Institute for Biologically Inspired Engineering at Harvard University.

The objective

of this study was to develop an electrochemical assay to detect SARS-CoV-2 IgG in human plasma.

The statistical design of the study was

powered in accordance with this study objective.

Preliminary findings were:

The SARS-CoV-2 Antibody biosensor assay was 100% sensitive and 100% specific

using positive and negative SARS CoV-2 human plasma samples.

The time in obtaining results was less than 10 minutes.

The study is a key milestone towards validating

a rapid point-of-care diagnostic test intended to quantify the measurement of antibodies against SARS-CoV-2 in saliva, and will assist

in the preparation for clinical trials.

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

Population 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.

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

when booster vaccine shots are needed.

SARS-CoV-2 Antibody biosensor assay was 100% sensitive and 100% specific using positive and negative SARS-CoV-2 human plasma samples.

time in obtaining results was less than 10 minutes.

study is a key milestone towards validating a rapid point-of-care diagnostic test intended to quantify the measurement of antibodies

against SARS-CoV-2 in saliva and will assist in the preparation for clinical trials.

Potential Applications

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

Population 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.

vaccination screening - To assess the degree of the elicited potent antigen-specific antibody responses, to SARS-CoV-2 vaccines and

determine when booster vaccine shots are needed.

– The SARS-CoV-2 test can be used as a complement to the (RNA) virus detection tests for patients presenting late after symptoms

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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.

the SARS-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.

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or approximately two weeks post-presumed infection.

utilizing the Saliva test 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 correlated

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

utilizing the Saliva Glucose Test for detecting SARS-CoV-2 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

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

COVID Test would increase the scope for diagnosis to be made in the community and outside the laboratory setting.

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of Operations:

of the Three Months Ended September 30, 2021 and 2020

of the Three and Six Months Ended December 31, 2021 and 2020

support income

support income decreased by $55,427 to zero from $55,427 for the quarter ended September 30, 2021 compared to same period in 2020.

decrease was primarily attributable to GBS Inc.’s subsidiary companies receiving COVID-19 related government support in the previous

financial year which was discontinued in April 2021.

support income decreased by $105,246 to $177,791 from $283,037 for the quarter ended December 31, 2021 compared to same period in 2020.

This decrease was primarily attributable to GBS Inc.’s subsidiary companies receiving COVID-19 related government support in the

previous financial year which was discontinued in April 2021.

support income decreased by $160,673 to $177,791 from $338,464 for the six months ended December 31, 2021 compared to same period in

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

in the previous financial year which was discontinued in April 2021.

and administrative expenses

and administrative expenses increased by $811,517 to $1,332,520 from $521,003 for the quarter ended September 30, 2021 compared to the

and administrative expenses increased by $331,794 to $1,003,244 from $671,450 for the quarter ended December 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 December

and administrative expenses increased by $1,143,311 to $2,335,764 from $1,192,453 for the six months ended December 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 December 2020.

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

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and regulatory expenses

and regulatory expenses increased by $75,861 to $106,799 from $30,938 for the quarter ended September 30, 2021 compared to the same period

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.

and regulatory expenses increased by $2,299,362 to $2,641,182 from $341,820 for the quarter ended December 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 expensing of the prepaid R&D contribution of $ 2,600,000.

and regulatory expenses increased by $2,375,223 to $2,747,981 from $372,758 for the six months ended December 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 expensing of the prepaid R&D contribution of $ $2,600,000.

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 from $166,481 to zero for the quarter ended September 30, 2021 compared to the same period in

and capital raising expenses decreased by $187,093 to zero from $187,093 for the quarter ended December 31, 2021 compared to the same

period in 2020.

This decrease was attributable to final expenditures required by us in the first half of the last financial year to successfully

complete our IPO in December 2020.

and capital raising expenses decreased by $353,574 to zero from $353,574 for the six months ended December 31, 2021 compared to the same

period in 2020.

This decrease was attributable to final expenditures required by us in the first half of the last financial year to successfully

complete our IPO in December 2020.

income and expenses

expense decreased from $85,828 to zero for the quarter ended September 30, 2021 as compared to the same period in 2020.

This decrease

was attributable to the conversion of convertible notes into common shares after the completion of the IPO in December 2020.

expense decreased by $986,185 to $675 from $986,860 for the quarter ended December 31, 2021 as compared to the same period in 2020.

decrease was attributable to the conversion of convertible notes into common shares after the completion of the IPO in December 2020.

expense decreased by $1,072,013 to $675 from $1,072,688 for the six months ended December 31, 2021 as compared to the same period in

This decrease was attributable to the conversion of convertible notes into common shares after the completion of the IPO in December

foreign exchange gain (loss)

foreign exchange loss decreased by $189,352 to $3,118 from $192,470 for the quarter ended September 30, 2021 compared to the same period

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

during the same period in 2020.

foreign exchange gain (loss) increased by $86,651 to a gain of $14 from a loss of $86,637 for the quarter ended December 31, 2021 compared

to the same period in 2020.

This increase was largely attributable to the favorable foreign exchange translations on capital raisings

from AUD to USD during the same period in 2020.

foreign exchange loss deceased by $276,003 to a loss of $3,104 from a loss of $279,107 for the six months ended December 31, 2021 compared

to the same period in 2020.

This increase was largely attributable to the unfavorable foreign exchange translations on capital

raisings from AUD to USD during the same period in 2020.

tax (expense) benefit

was no income tax expense for the quarter ended September 30, 2021, and 2020, respectively, and the Company has established a full valuation

allowance for all of its deferred tax assets.

was no income tax expense for the three and six months ended December 31, 2021 and 2020, respectively, and the Company has established

a full valuation allowance for all of its deferred tax assets.

comprehensive income

currency translation gain (loss)

foreign currency translation loss increased by $16,914 to $67,482 from $50,568 for the three months ended September 30, 2021 and 2020,

respectively.

It is calculated based on the Company’s unsettled transactions in currencies other than its functional currency.

loss increased by $360,142 to $1,432,652 from $1,072,510 for the quarter ended September 30, 2021 compared to the same period in 2020.

foreign currency translation gain (loss) decreased by $26,501 to a $7,355 gain from a $33,856 gain for the quarter ended December 31,

2021 as compared to the same period in 2020.

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

than its functional currency.

foreign currency translation loss increased by $43,415 to a loss of $60,127 from a loss of $16,712 for the six months ended December

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

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

than its functional currency.

loss increased by $1,473,434 to $3,463,832 from $1,990,389 for the quarter ended December 31, 2021 compared to the same period in 2020.

This increase is primarily driven by the expansion of the Company’s operational activities in order to progress on its regulatory

and development milestones.

loss increased by $1,834,359 to $4,901,663 from $3,067,304 for the six months ended December 31, 2021 compared to the same period in

This increase is primarily driven by the expansion of the Company’s operational activities in order to progress on its regulatory

and development milestones.

and Capital Resources

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the incurrence of debt.

As of September 30, 2021, we had $12,608,468 in cash and cash equivalents and $13,027,563 in working capital.

According 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,

we will have sufficient capital resources to enable us to continue to implement our business plan and remain in operation for at least

up to first half of 2023.

During this time, we expect to use the net proceeds available to us for the following purposes:

As of December 31, 2021, we had $11,190,622 in cash and cash equivalents and $10,075,538 in working capital.

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, we will have sufficient capital resources to enable us to continue to implement our business plan

and remain in operation for at least up to the first half of 2023.

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;

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

See “Initial public offering” above for details about our

“Initial public offering” above for details about our IPO.

Transition Period for “Emerging Growth Companies”

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Sheet Arrangements

of September 30, 2021, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a material

current or future effect on our results of operations or financial condition, revenues, expenses, results of operations, liquidity,

cash requirements or capital resources.

of December 31, 2021, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a material current

or future effect on our results of operations or financial condition, revenues, expenses, results of operations, liquidity, cash requirements

or capital resources.

Accounting Policies and Use of Estimates

preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make judgments, estimates

and assumptions that impact the amounts reported in our consolidated financial statements and accompanying notes that are not readily

apparent from other sources.

The estimates and associated assumptions are based on historical experience and other factors that are considered

preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires management to make judgments,

estimates and assumptions that impact the amounts reported in our consolidated financial statements and accompanying notes that are not

readily apparent from other sources.

The estimates and associated assumptions are based on historical experience and other factors that

are considered relevant.

Actual results may differ from these estimates.

critical accounting policies are described in our Annual Report on Form 10-K filed with the SEC on September 15, 2021, and 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.

the three months ended September 30, 2021, there were no material changes to our critical accounting policies from those in

our June 30, 2021 Annual Report on Form 10-K filed with the SEC on September 15, 2021.

critical accounting policies are described in the 2021 Form 10-K, and 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 and incorporated herein by

the three and six months ended December 31, 2021, there were no material changes to our critical accounting policies from those in the

2021 Form 10-K.

issued Accounting Pronouncements

the impact of recently issued accounting pronouncements on the Company’s consolidated financial statements, see Note 3 to the condensed

consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q and incorporated herein by reference.

the impact of recently issued accounting pronouncements on the Company’s consolidated financial statements, see Note 3 to the unaudited

condensed consolidated financial statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report

on Form 10-Q and incorporated herein by reference.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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 2. Management’s Discussion and Analysis