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2022-06-30
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2021-12-31
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K/A
(Amendment
No: 1)
(Mark
One)
☒ |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended June 30, 2022
or
☐ |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the transition period from _____ to _____
Commission
File Number 001-39825
GBS
Inc.
(Exact
name of Registrant as specified in its Charter)
Delaware |
|
82-1512711 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(I.R.S.
Employer
Identification
No.) |
WeWork c/o GBS Inc
142
West, 57th Street,
11th
Floor,
New York,
NY |
|
10019 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (646) 828-8258
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, par value $0.01 per share |
|
GBS |
|
Nasdaq
Capital Market |
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐NO ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate
by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). YES ☒ NO ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer |
|
☐ |
|
Accelerated
filer |
|
☐ |
Non-accelerated
filer |
|
☒ |
|
Smaller
reporting company |
|
☒ |
|
|
|
|
Emerging
growth company |
|
☒ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒
The
aggregate market value of the voting and non-voting common equity on December 31, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, held by
nonaffiliates, was $17,348,826.
As
of October 6, 2022, there were 14,889,904 of the registrant’s Common Stock issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
Auditor Firm ID |
|
Auditor Name |
|
Auditor Location |
2256 |
|
BDO Audit Pty Ltd |
|
Sydney, Australia |
EXPLANATORY
NOTE
GBS
Inc. (the “Company,” “GBS,” “we,” “us” or “our”) is filing this Amendment
No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended June 30, 2022, as filed
with the Securities and Exchange Commission (the “SEC”) on September 22, 2022 (the “Original Form 10-K”).
The
purpose of this Amendment is solely to reflect the changes i) aggregated market value of the voting and non-voting common equity held
by non-affiliates on December 31 2021 on the cover page, and ii) the information required in Part II , Item 9A of the Original
Form 10-K, which information was previously omitted from the Original Form 10-K. Accordingly, we hereby amend and replace in its entirety
Part II, Item 9A of the Original Form 10-K.
In
addition, pursuant to the rules of the SEC, Item 15 of Part IV has been amended to include the currently dated certifications of the
Company’s principal executive officer and principal financial officer (Exhibits 31.3 and 31.4) required under Section 302 of the
Sarbanes-Oxley Act of 2002.
Table
of Contents
PART
II
ITEM
9A. CONTROLS AND PRECEDURES
| a) | Disclosure
and control procedures |
Our
management, with the participation of our Principal Executive Officer and Principal Financial and Accounting Officer, evaluated the effectiveness
of the design and operations of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) as of the end of the period covered by this report on Form 10-K/A, and have concluded that, based on such evaluation, our
disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting as
of June 30, 2022 as described below.
Notwithstanding
the conclusion that our disclosure controls and procedures were not effective as of the end of the period covered by this report, we
believe that our consolidated financial statements and other information contained in our annual report on Form 10-K present fairly,
in all material respects, our business, financial condition and results of operations for the periods presented.
| b) | Management’s
Report on Internal Control Over Financial Reporting |
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a
-15(f) under the Exchange Act. Our internal control was designed to provide reasonable assurance to our management and board of directors
regarding the preparation and fair presentation of published financial statements.
Internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s
internal control over financial reporting includes those policies and procedures that (i) pertain to assets of the Company; (ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial
statements.
A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is
a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not
be prevented or detected on a timely basis.
The
effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including
the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate
misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any
system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable,
not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must
reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits
of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate
for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial
reporting.
Management
assessed the effectiveness of our internal control over financial reporting as of June 30, 2022, based on the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on
this assessment, management concluded that our internal control over financial reporting was not effective as of June 30, 2022, due to
the material weaknesses described below.
Material
Weaknesses
As
a result of the assessment, management concluded that the Company’s internal control over financial reporting was ineffective as
of the evaluation date due to the following material weaknesses in control
environment, risk assessment, control activities, information and communication and monitoring:
● |
The
lack of sufficient financial reporting and accounting personnel with appropriate knowledge of US GAAP and SEC reporting requirements
to prepare consolidated financial statements and related disclosures in accordance with US GAAP and SEC reporting requirements. |
Remediation
Plan
Management
is committed to continuing with the steps necessary to remediate the control deficiencies that constituted the above material weaknesses.
Since the IPO, we made the following enhancements to our control environment:
a.
We added accounting and finance personnel to provide additional individuals to allow for segregation of duties in the preparation and
review of schedules, calculations, and journal entries that support financial reporting, to provide oversight, structure and reporting
lines, and to provide additional review over our disclosures;
b.
We enhanced our controls to improve the preparation and review over complex accounting measurements, and the application of GAAP to significant
accounts and transactions, and our financial statement disclosures;
c.
We plan to engage independent experts when complex transactions are entered;
d.
We plan to recruit additional financial reporting and accounting personnel with adequate knowledge of US GAAP and SEC rules; and
e.
We are in the process of engaging outside consultants to assist us in our evaluation of the design, implementation, and documentation
of internal controls that address the relevant risks, and that provide for appropriate evidence of performance of our internal controls
(including completeness and accuracy procedures).
Under
the direction of the audit committee of the board of directors, management will continue to take measures to remediate the material weakness
in the fiscal year 2023. As such, we will continue to enhance corporate oversight over process-level controls and structures to ensure
that there is appropriate assignment of authority, responsibility, and accountability to enable remediation of our material weakness.
As
we continue to evaluate, and work to improve, our internal control over financial reporting, management may determine that additional
measures to address control deficiencies or modifications to the remediation plan are necessary.
This
Annual report on Form 10K/A, does not include an attestation report of our independent registered public accounting firm due to a transition
period established by rules of the SEC for “emerging growth companies”.
Changes
in Internal Control Over Financial Reporting
Other
than the ongoing remediation effort, described above, there have been no changes to the Company’s internal controls over financial
reporting (as defined in Rules 13a-15(f) and 15d 15(f) under the Exchange Act) during the most recent fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting
PART
IV
ITEM
15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES
4.6# |
|
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. |
|
|
|
10.1* |
|
2019 Incentive Equity Plan ((incorporated by reference to Exhibit 10.1 to the Company’s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on August 2, 2019) |
|
|
|
10.2 |
|
Amended and Restated License Agreement between the Company and Life Science Biosensor Diagnostics Pty Ltd. ((incorporated by reference to Exhibit 10.2 to the Company’s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 13, 2020) |
|
|
|
10.3* |
|
Form of Employment Agreement between the Company and Mr. Simeonidis (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 15, 2022 |
|
|
|
10.4* |
|
Form of Employment Agreement between the Company and Mr. Sakiris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 15, 2022). |
|
|
|
10.5 |
|
Technology License Agreement between the Company and Life Science Biosensor Diagnostics Pty Ltd. ((incorporated by reference to Exhibit 10.13 to the Company’s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 13, 2020) |
|
|
|
10.6 |
|
Form of Exchange Agreement ((incorporated by reference to Exhibit 10.15 to the Company’s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020) |
|
|
|
10.7 |
|
Form of Registration Rights Agreement ((incorporated by reference to Exhibit 10.16 to the Company’s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020) |
|
|
|
10.8 |
|
Form of Purchase and Assignment Agreement ((incorporated by reference to Exhibit 10.17 to the Company’s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020) |
|
|
|
10.9 |
|
Option Agreement ((incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 2, 2021). |
|
|
|
10.10# |
|
Bridge Facility Agreement, dated as of June 16, 2022, between the Company and Intelligent Fingerprinting Limited. |
|
|
|
14.1 |
|
Code of Ethics ((incorporated by reference to Exhibit 14.1 to the Company’s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on August 6, 2020) |
|
|
|
21.1# |
|
List of Subsidiaries |
*Indicates
management contract or compensatory plan.
#
Filed with the original 10-K.
**
Filed herewith
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
GBS
Inc. |
|
|
|
Date:
October 7, 2022 |
By: |
/s/
Steven Boyages |
|
|
STEVEN
BOYAGES |
|
|
INTERIM
CHIEF EXECUTIVE OFFICER AND CHAIRMAN |
|
|
(Principal
Executive Officer) |
|
|
|
Date:
October 7, 2022 |
By: |
/s/
Spiro Sakiris |
|
|
SPIRO
SAKIRIS |
|
|
CHIEF
FINANCIAL OFFICER |
|
|
(Principal
Financial Officer) |
Pursuant
to the requirements of the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Signature
|
|
Title |
|
Date |
|
|
|
|
|
/s/
Steven Boyages |
|
Interim
Chief Executive Officer, Chairman and Director |
|
October 7, 2022 |
Steven
Boyages |
|
(Principal
Executive Officer) |
|
|
|
|
|
|
|
/s/
Spiro Sakiris |
|
Chief
Financial Officer |
|
October 7, 2022 |
Spiro
Sakiris |
|
(Principal
Financial Officer) |
|
|
|
|
|
|
|
/s/
Jonathan Hurd |
|
|
|
|
Jonathan
Hurd |
|
Director |
|
October 7, 2022 |
|
|
|
|
|
/s/
George Margelis |
|
|
|
|
Dr.
George Margelis |
|
Director |
|
October 7, 2022 |
|
|
|
|
|
/s/
Lawrence Fisher |
|
|
|
|
Lawrence
Fisher |
|
Director |
|
October 7, 2022 |
|
|
|
|
|
/s/
Christopher Towers |
|
|
|
|
Christopher
Towers |
|
Director |
|
October 7, 2022 |
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