What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-09-22 compared with 2021-09-16 · 7 added, 327 removed, 13 unchanged (96% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

common stock is traded on The Nasdaq Global Market under the symbol “GBS”.

of September 13, 2021, there are approximately 399 holders of record of our common stock.

As many of our shares of common

stock are held by brokers or other institutions on behalf of shareholders, we are unable to estimate the total number of individual shareholders

represented by the record holders.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

common stock is traded on The Nasdaq Capital Market under the symbol “GBS”.

of September 21, 2022, there were approximately 382 holders of record of our common stock.

As many of our shares of common stock are held

by brokers or other institutions on behalf of shareholders, we are unable to estimate the total number of individual shareholders represented

by the record holders.

have not paid any dividends on our common stock to date and we currently expect that, for the foreseeable future, all earnings (if any)

10 unchanged sentences

Authorized for Issuance Under Equity Compensation Plans

Security Ownership of Certain Beneficial Owners and Management Related Stockholders Matters ”

for information

“ Security Ownership of Certain Beneficial Owners and Management Related Stockholders Matters ” for information

with respect to our compensation plans under which equity securities are authorized for issuance.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

addition to historical information, this discussion contains forward-looking statements based upon management’s current expectations

that are subject to risks and uncertainties which may cause our actual results to differ materially from plans and results discussed

We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A.

“Risk Factors”

and “Cautionary Note Regarding Forward-Looking Statements”

included at the beginning of this Annual Report on Form 10-K.

caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.

In addition, statements that “we believe”

and similar statements reflect our beliefs and opinions on the relevant subject.

These statements are based upon information available to us as of the date of this report, and while we believe such information forms

a reasonable basis for such.

We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly

update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any

such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking

are a biosensor diagnostic technology company developing our COV2 test and across the Asia-Pacific region (“APAC”) and a

biosensor platform comprising of biochemistry, immunology, tumour markers, hormones, and nucleic acid diagnostic modalities.

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

Our headquarter is in New York.

We 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”)

currently are a 42.6% (as of June 30, 2021) owned (by voting rights) affiliate of Life Science Biosensor Diagnostics Pty

Ltd (“LSBD”or Licensor), an Australian company that owns the worldwide intellectual property rights to the biosensor

platform from University of Newcastle, Australia.

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, tumor markers and nucleic acid tests.

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.

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, 2021, 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 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.

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 share.

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.

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 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.

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.

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”).

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

completion of the initial public offering in December 2020, 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 59,800 Series A warrants and 1,400,995 Series

B warrants were exercised and converted into common stock.

In addition to this, a total of 1,700,000 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.

Point-of-Care

Test Commercialization Ecosystem Established

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

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

Key Developments

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;

study for the salivary collection protocol with Johns Hopkins University, Bloomberg School of Public Health;

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;

study for the salivary collection protocol with Johns Hopkins University, Bloomberg School of Public Health;

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

the device and usability;

development of prototyping for middleware and smart phone application;

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.

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’

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

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 the 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 September 13, 2021 is as follows:

of Issued Common Stock

of Series A warrants exercisable at $8.50

of Series B warrants exercisable at $17.00 (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

year three after the IPO)

Warrants issued to LSBD exercisable at $17.00

of Operations:

of the Years Ended June 30, 2021 and 2020

support income

support income increased by $1,910,663 to $1,980,484 from $69,821 for the year ended June 30, 2021 compared to same period in 2020.

increase was primarily attributable to GBS Inc.’s subsidiary companies having received and entitlements to receive Research and

Development tax incentives.

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 zero and $118,923 for the year ended June 30, 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 $1,155,940 to $3,359,065 from $2,203,125 for the year ended June 30, 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 2020).

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

contribution, consultancy, as well as an increase in employee related costs associated with a higher headcount.

and regulatory expenses

and regulatory expenses increased by $3,247,497 to $3,835,703 from $588,206 for the year ended June 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.

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 increased by $104,791 to $359,198 from $254,407 for the year ended June 30, 2021 as compared to the same

period in 2020.

This increase was attributable to final expenditures required by us in the first half of the current period to successfully

complete our IPO in December 2020.

income and expenses

expense increased by $635,863 to $1,093,608 from $457,745 for the year ended June 30, 2021 as compared to the same period in 2020.

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

This was partially offset by no interest expenses relating to convertible notes since the completion of the IPO due to their

conversion into common stock.

(income) from unconsolidated equity method investment

from unconsolidated equity method investment changed by $257,384 to a loss of $135,692 for the year ended June 30, 2021 compared to a

$121,692 gain for the same period in 2020.

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

BiosensX (North America) Inc.

foreign exchange gain (loss)

foreign exchange loss was $271,225 for the year ended June 30, 2021 compared to zero for 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 year ended June 30, 2021 and 2020, respectively, 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 loss increased by $150,228 to $297,309 from $147,081 for the year ended June 30, 2021 and 2020, respectively.

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

loss attributable to GBS Inc.

increased by $3,873,510 to $7,037,286 from $3,163,776 for the year ended June 30, 2021 compared

to the same period in 2020.

This increase is primarily driven by funding availability since completion of the IPO in December 2020.

has allowed the Company expand its operational activities in order to progress on its regulatory and development milestones.

and Capital Resources

use working capital and cash measures to evaluate the performance of our operations and our ability to meet our financial obligations.

We define Working Capital as current assets less current liabilities.

This measure should not be considered in isolation or as a substitute

for any standardized measure under GAAP.

This information is intended to provide investors with information about our liquidity.

companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

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 June 30, 2021, we had $12,573,685 in cash and cash equivalents and $14,524,391 in working capital.

“Initial public offering & share structure”

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

and remain in operation for at least 15 months.

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

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 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.

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, or

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.

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

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

effect on our results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital

Accounting Estimates

preparation of our 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

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

Actual results may differ from these estimates.

estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognized in the period

in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the

revision affects both current and future periods.

3 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, and incorporated herein by

reference, describes the Company’s accounting policies.

The following discussion should be read in conjunction with Note 3, as

it presents uncertainties involved in applying the accounting policies and provides insight into the quality of management’s estimates

and variability in the amounts recorded for these critical accounting estimates.

While all accounting policies impact the consolidated

financial statements, certain policies may be viewed to be critical.

Management believes that the accounting policies which involve more

significant judgments and estimates used in the preparation of our consolidated financial statements include research and development

and Development (R & D) tax refund

Company measures the research and development grant income and receivable by taking into account 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

issued Accounting Pronouncements

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

financial statements included in Part II, Item 8 of this Annual Report on Form 10-K and incorporated herein by reference.

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.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

consolidated financial statements required pursuant to this item are included in Part IV, Item 15 of this Annual Report on Form 10-K,

beginning on page F-1, and incorporated herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

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-K

Item 5. Market for Registrant’s Common Equity