Quantum Cyber N.V 6-K, filed Aug 15, 2023
Quantum Cyber N.V. (QUCY)
About this 6-K
Quantum Cyber N.V filed this 6-K on August 15, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the three months ended
Commission File No.
(Translation of registrant’s name into English)
Robert Koch Strasse 50
55129 Mainz
Germany
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F
Form 20-F ☒ Form 40-F ☐
Other Events
On August 15, 2023, Mainz Biomed N.V. made available its Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2023. A copy of the report is attached hereto as Exhibit 99.1.
On August 15, 2023, Mainz Biomed N.V. made available its unaudited Financial Statements for the three and six months ended June 30, 2023. A copy of the report is attached hereto as Exhibit 99.2.
Furnished as Exhibit 99.3 to this Report on Form 6-K is a press release of Mainz Biomed N.V. (the “Company”) dated August 15, 2023, announcing the Company’s results for the three and six months ended June 30, 2023.
This current report on Form 6-K and exhibits 99.1 and 99.2 hereto are hereby incorporated by reference into the Company’s Registration Statement on Form F-3 (File No. 333-269091).
| Exhibit No. | Exhibit | |
| 99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations of Mainz Biomed N.V. for the three and six months ended June 30, 2023 | |
| 99.2 | Unaudited Financial Statements of Mainz Biomed N.V. as of and for the three and six months ended June 30, 2023 | |
| 99.3 | Press Release dated August 15, 2023 | |
| 101.INS | Inline XBRL Instance Document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 15, 2023 | By: | /s/ William J. Caragol |
| Name: | William J. Caragol | |
| Title | Chief Financial Officer |
2
Exhibit 99.1
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes to those statements included in Exhibit 99.2 to this Form 6-K. This discussion and analysis contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives, expectations, forecasts and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the section titled “Risk Factors” and elsewhere in our Annual Report for the Year ended December 31, 2022 on Form 20-F, filed with the Securities and Exchange Commission on April 7, 2023. You should carefully read the “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
Organization and Overview of Operations
We develop in-vitro diagnostic (“IVD”) tests for clinical diagnostics in the area of human genetics, focusing in the areas of personalized medicine. Our flagship product is a colorectal cancer screening product sold under the brand name ColoAlert™. We develop and distribute our IVD kits to third-party laboratories, who in turn provide diagnostic analysis for their patients. Additionally, we operate a clinical diagnostic laboratory for testing patient samples. Substantially all of our revenues in 2023 and 2022 were generated from the sale of our ColoAlert kits and the analytics and delivery of results from testing patient samples.
In addition, we conduct research and development in order to increase and diversify our product portfolio. During 2022 and 2023, we are managing two government funded research and development projects, which provide us non-refundable grant income that covers a portion of the individual project related costs. Our PancAlert product candidate research is partially funded with government programming and Company funds.
On November 9, 2021, we completed our initial public offering whereby we sold 2,300,000 ordinary shares for gross proceeds of $11,500,000. On January 28, 2022 we completed a follow-on public offering whereby we sold 1,725,000 ordinary shares for gross proceeds of $25,875,000.
Results of Operations
Comparison of the Three Months Ended June 30, 2023 and 2022
The following table provides certain selected financial information for the periods presented:
| Three Months Ended June 30, | ||||||||||||||||
| 2023 | 2022 | Change | % Change | |||||||||||||
| Revenue | $ | 248,945 | $ | 139,240 | $ | 109,705 | 79 | % | ||||||||
| Cost of revenue | $ | 100,147 | $ | 58,427 | $ | 41,720 | 71 | % | ||||||||
| Gross profit | $ | 148,798 | $ | 80,813 | $ | 67,985 | 84 | % | ||||||||
| Gross margin | 60 | % | 58 | % | ||||||||||||
| Research and development | $ | 3,478,595 | $ | 229,916 | $ | 3,248,679 | 1,413 | % | ||||||||
| Sales and marketing | $ | 1,799,569 | $ | 1,866,384 | $ | (66,815 | ) | (4 | )% | |||||||
| General and administrative | $ | 2,796,724 | $ | 4,932,422 | $ | (2,135,698 | ) | (43 | )% | |||||||
| Total operating expenses | $ | 8,074,888 | $ | 7,028,722 | $ | 1,046,166 | 15 | % | ||||||||
| Loss from operations | $ | (7,926,090 | ) | $ | (6,947,909 | ) | $ | (978,181 | ) | (14 | )% | |||||
| Other income (expense) | $ | (325,637 | ) | $ | 9,198 | $ | (334,835 | ) | (3,640 | )% | ||||||
| Net loss | $ | (8,251,727 | ) | $ | (6,938,711 | ) | $ | (1,313,016 | ) | (19 | )% | |||||
| Total comprehensive loss | $ | (8,341,751 | ) | $ | (6,892,507 | ) | $ | (1,449,244 | ) | (21 | )% | |||||
| Basic and dilutive loss per common share | $ | (0.56 | ) | $ | (0.48 | ) | $ | (0.08 | ) | (17 | )% | |||||
| Weighted average number of common shares outstanding – basic and diluted | 14,915,905 | 14,286,157 | ||||||||||||||
Revenue
Revenue for the three months ended June 30, 2023 was $248,945 as compared to $139,240 for the three months ended June 30, 2022, an increase of 79%. This increase was attributable to ColoAlert sales, primarily in Germany. We intend to continue our efforts to grow the market for ColoAlert, both in Germany and extending to other countries in Europe and the rest of world.
Cost of Revenue
Cost of Revenue for the three months ended June 30, 2023 was $100,147 as compared to $58,427 for the three months ended June 30, 2022, a 71% increase. This increase was the result of increased ColoAlert sales volume.
Gross profit
Gross profit increased to $148,798 in the three months ended June 30, 2023 compared to $80,813, for the three months ended June 30, 2022. This gross profit increase, resulting in an improvement of gross margin from 58% to 60%, was attributable to improved profits resulting from lowered unit cost of goods sold with attributable to economies of scale from increased volumes.
Research and Development Expenses
Research and development expenses for the three months ended June 30, 2023, were $3,478,595 compared to $229,916 for the three months ended June 30, 2022, an increase of $3,248,679. This increase was driven by the cost of our ColoFuture and eAArlyDetect feasibility studies in the U.S. and in Europe. During the three months ended June 30, 2023, clinical study expenses increased $1,831,286 from the comparable period in 2022. Additionally, our increased staffing resulted in higher labor costs, which increased by $668,020 for the three months ended June 30, 2023, compared to the same period in 2022. Increased labor expenses are the result of our continued development of our ColoAlert product and research related to our PancAlert product candidate. As a result of our increased lab capacity and overhead, our lab expenses increased by $495,050 for the three months ended June 20, 2023 compared to the comparable period of 2022.
Sales and Marketing Expenses
Sales and marketing expenses for the three months ended June 30, 2023, were $1,799,569 compared to $1,866,384 for the three months ended June 30, 2022, a decrease of $66,815. This net decrease was the result of an increase in labor costs (salary and consulting) to support the sale of our ColoAlert product of $709,191 and a decrease in advertising expenses of $812,238 in the three months ended June 30, 2023 compared to the comparable period in 2022.
General and Administrative Expenses
General and administrative expenses for the three months ended June 30, 2023 were $2,796,724 compared to $4,932,422 for the three months ended June 30, 2022, a decrease of $2,135,698. The decreased expenses were primarily the result of a decrease of $1,266,730 of non-cash stock option expense, and decreased salary and consulting costs of $854,651, related to legal, banking, and accounting fees primarily related to our capital raising efforts in the first half of 2022.
Other Expense
Other expense, net for the three months ended June 30, 2023 was $325,637 compared to income of $9,198 for the three months ended June 30, 2022, resulting in increased other expenses (net) of $334,835. This increase was primarily the result of commitment fees and expenses related to our June 28, 2023 financing of $280,000.
Comparison of the Six Months Ended June 30, 2023 and 2022
The following table provides certain selected financial information for the periods presented:
| Six Months Ended June 30, | ||||||||||||||||
| 2023 | 2022 | Change | % Change | |||||||||||||
| Revenue | $ | 499,049 | $ | 239,805 | $ | 259,244 | 108 | % | ||||||||
| Cost of revenue | $ | 211,310 | $ | 112,563 | $ | 98,747 | 88 | % | ||||||||
| Gross profit | $ | 287,739 | $ | 127,242 | $ | 160,497 | 126 | % | ||||||||
| Gross margin | 58 | % | 53 | % | ||||||||||||
| Research and development | $ | 5,736,373 | $ | 793,488 | $ | 4,942,885 | 623 | % | ||||||||
| Sales and marketing | $ | 4,085,661 | $ | 2,788,014 | $ | 1,297,647 | 47 | % | ||||||||
| General and administrative | $ | 4,879,351 | $ | 9,125,207 | $ | (4,245,856 | ) | (47 | )% | |||||||
| Total operating expenses | $ | 14,701,385 | $ | 12,706,709 | $ | 1,994,676 | 16 | % | ||||||||
| Loss from operations | $ | (14,413,646 | ) | $ | (12,579,467 | ) | $ | (1,834,179 | ) | (15 | )% | |||||
| Other expense | $ | (398,997 | ) | $ | (22,980 | ) | $ | (376,017 | ) | (1,636 | )% | |||||
| Net loss | $ | (14,812,643 | ) | $ | (12,602,447 | ) | $ | (2,210,196 | ) | (18 | )% | |||||
| Total comprehensive loss | $ | (14,963,239 | ) | $ | (12,519,804 | ) | $ | (2,443,435 | ) | (20 | )% | |||||
| Basic and dilutive loss per common share | $ | (1.01 | ) | $ | (0.91 | ) | $ | (0.09 | ) | (10 | )% | |||||
| Weighted average number of common shares outstanding – basic and diluted | 14,803,243 | 13,821,914 | ||||||||||||||
2
Revenue
Revenue for the six months ended June 30, 2023 was $499,049 as compared to $239,805 for the six months ended June 30, 2022, an increase of 108%. This increase was primarily attributable to ColoAlert sales, which were primarily in Germany. We intend to continue our efforts to grow the market for ColoAlert, both in Germany and extending to other countries in Europe and the rest of world.
Cost of Revenue
Cost of Revenue for the six months ended June 30, 2023 was $211,310 as compared to $112,563 for the six months ended June 30, 2022, an 88% increase. This increase was the result of increased ColoAlert sales volume.
Gross profit
Gross profit increased to $287,739 in the six months ended June 30, 2023 compared to $127,242, for the six months ended June 30, 2022. This gross profit increase, resulting in an improvement of gross margin from 53% to 58%, was attributable to improved profits resulting from lowered unit cost of goods sold attributable to economies of scale with increased volumes.
Research and Development Expenses
Research and development expenses for the six months ended June 30, 2023 were $5,736,373 compared to $793,488 for the six months ended June 30, 2022, an increase of $4,942,885. This increase was driven by the cost of our ColoFuture and eAArly Detect feasibility studies in the U.S. and in Europe. During the six months ended June 30, 2023, clinical study expenses increased $2,648,449 from the comparable period in 2022. Additionally, our increased staffing resulted in higher labor costs, which increased by $1,471,466 for the six months ended June 30, 2023, compared to the same period in 2022. Increased labor expenses are the result of our continued development of our ColoAlert product and research related to our PancAlert product candidate. As a result of our increased lab capacity and overhead, our lab expenses increased by $463,078 for the six months ended June 30, 2023 compared to the comparable period of 2022.
Sales and Marketing Expenses
Sales and marketing expenses for the six months ended June 30, 2023, were $4,085,661 compared to $2,788,014 for the six months ended June 30, 2022, an increase of $1,297,647. This increase was related to labor costs (salary and consulting) to support the sale of our ColoAlert product, which increased by $1,356,980 for the six months ended June 30, 2023 compared to the comparable period of 2022.
General and Administrative Expenses
General and administrative expenses for the six months ended June 30, 2023 were $4,879,351 compared to $9,125,207 for the six months ended June 30, 2022, a decrease of $4,245,856. The decreased expenses were primarily the result of a decrease of $3,225,777 of non-cash stock option expense, and decreased salary and consulting costs of $1,068,694, related to legal, banking, and accounting fees primarily related to our capital raising efforts in the first half of 2022.
Other Expense
Other expense, net for the six months ended June 30, 2023 was $398,997 compared to $22,980 for the six months ended June 30, 2022, resulting in increased other expenses (net) of $376,017. This increase was primarily the result of commitment fees and expenses related to our June 28, 2023 financing of $280,000, and other income from a government grant program under which we earned $36,288 in the six months ended June 30, 2022, which program ended during 2022.
3
Liquidity and Capital Resources
Our principal liquidity requirements are for working capital and operating losses. We fund our liquidity requirements primarily through cash on hand, cash flows from operations and, debt and equity financing. As of June 30, 2023, we had $10,911,087 of cash and cash equivalents, with $17,141,775 as of December 31, 2022.
The following table summarizes our cash flows from operating, investing and financing activities:
| Six Months Ended June 30, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| Cash used in operating activities | $ | (10,778,125 | ) | $ | (6,456,904 | ) | $ | (4,321,221 | ) | |||
| Cash used in investing activities | $ | (1,524,555 | ) | $ | (252,446 | ) | $ | (1,272,109 | ) | |||
| Cash provided by financing activities | $ | 6,192,507 | $ | 24,091,651 | $ | (17,899,144 | ) | |||||
Cash Flow from Operating Activities
For the six months ended June 30, 2023, cash flows used in operating activities was $10,778,126 compared to $6,456,904 used during the six months ended June 30, 2022. The increase in cash flows used in operating activities of $4,321,221 was primarily the result of our operating loss for the six months ended June 30, 2023, net of non-cash stock-based compensation, depreciation and amortization, and timing differences for the settlement of assets and liabilities. A primary driver of this increased loss was the increase in clinical study expenses which increased $2,648,449 in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.
Cash Flows from Investing Activities
During the six months ended June 30, 2023, we used $1,524,555 in investing activities compared to $252,446 used during the six months ended June 30, 2022. The increase in cash flows used in investing activities of $1,272,109 was the result of increased capital expenditures of $772,109 related to the expansion of our office and lab space, and the payment of $500,000 for the first installment related to the purchase of our ColoAlert intellectual property in February of 2023.
Cash Flows from Financing Activities
During the six months ended June 30, 2023, we had cash flow provided by financing activities of $6,192,507 compared to cash flow provided by financing activities of $24,091,651 for the six months ended June 30, 2022, a decrease of $17,899,144. This decrease was primarily the result of our sale of 1,725,000 ordinary shares on January 28, 2022, for net proceeds of $23,865,6,890, and the issuance of a convertible note on June 28, 2023, for net proceeds of $5,060,000.
Working Capital Discussion
We had recurring losses, accumulated deficit totaling $57,844,937 and negative cash flows used in operating activities of $10,778,125 as of and for the six months ended June 30, 2023. We also had $10,911,087 of cash on hand on June 30, 2023, and working capital, excluding liabilities expected to be settled with ordinary shares, of $6,431,978.
These conditions are indicators that impact the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. If the Company is unable to obtain funding, the Company could be forced to further delay, reduce or eliminate its research and development, regulatory, and commercial efforts which could adversely affect its future business prospects and its ability to continue as a going concern.
We plan to fund our cash flow and working capital needs through current cash on hand and future debt and/or equity financings which we may obtain through one or more public or private equity offerings, debt financings, government or other third-party funding, strategic alliances or collaboration agreements. In December 2022, we entered into a $50,000,000 Controlled Equity Offering; we raised $1.9 million of net cash from this facility during the six months ended June 30, 2023. Additionally, on June 28, 2023, we entered into a Pre-Paid Advance Agreement and issued a $5.5 million convertible promissory note, for net proceeds of $5.1 million.
Management believes that our expense reduction plans, coupled with the availability of our Controlled Equity Offering and/or Pre Paid Advance Agreement, and ability to execute a financing after the reporting of results from our clinical studies, will provide the financing necessary to fund our working capital needs for the foreseeable future.
4
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this prospectus, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
We believe our most critical accounting policies and estimates relate to the following:
| ● | Revenue Recognition |
| ● | Foreign Currency Translation |
| ● | Stock Option Compensation |
| ● | Lease Accounting |
| ● | Financial Instruments |
Revenue Recognition
Our revenue is primarily derived through providing our ColoAlert genetic diagnostic test kits to customers. We recognize revenue in accordance with International Financial Reporting Standards (“IFRS”) 15 “Revenue from Contracts with Customers”.
In accordance with IFRS 15, revenue is recognized upon the satisfaction of performance obligations. Performance obligations are satisfied at the point at which control of the promised goods or services are transferred to customers, in an amount that reflects the consideration we expect to be entitled to receive for those goods and services.
We provide a genetic diagnostic testing service and testing kits which are not considered separately identifiable from each other as we use the testing kits to collect samples in order to deliver the diagnostic test results to the customer. Accordingly, we have one performance obligation which is fulfilled upon the delivery of the test results to the customer and revenue is recognized at that point in time.
We also receive income from government sponsored R&D grants. Income is recognized on these programs when funds are received and all performance obligations, as defined in the grant, are completed. This income is included in the Statements of Comprehensive Loss as Other Income.
Foreign Currency Translation
The functional currency is determined using the currency of the primary economic environment in which that entity operates. The functional, as determined by our management, is the Euro (EUR).
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in the statement of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive income to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income. Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.
Our reporting currency is the US dollar. For presentation purposes, all amounts are translated from the Euro functional currency to the US dollar presentation currency for each period using the exchange rate at the end of each reporting period for the statement of financial position. Revenues and expenses are translated on the basis of average exchange rates during the year.
Exchange gains and losses arising from translation to our presentation currency are recorded as exchange differences on translation to reporting currency, which is included in other comprehensive income (loss).
5
Stock Option Compensation
We have adopted our 2021 Omnibus Incentive Plan and 2022 Omnibus Incentive Plan (the (“Plans”). Under the Plans, we are authorized to issue equity incentives in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units, share appreciation rights, performance units or performance shares under separate award agreements. Under the Plans, the aggregate number of shares underlying awards that we could issue cannot exceed, 2,800,000 ordinary shares.
On November 4, 2021, we awarded 1,484,650 stock options under the Plans, with a strike price of $5.00, the per share price in our November 2021 initial public offering. Such stock options were granted to all of our current employees, directors, advisors and senior management team. Such stock options for our non-senior management team, independent directors and advisors will begin vesting on November 4, 2022 and stop vesting on November 4, 2025 at the latest. Such stock options for the four members of our senior management team began vesting in portions equal to 25% of such options granted if, prior to November 4, 2025, the four-year anniversary of our initial public offering, for ten consecutive trading days (with at least 100,000 shares traded per trading day) the volume-weighted average price of the ordinary shares on the principal market is at least:
| ● | $7.50; |
| ● | $10.00; |
| ● | $12.50, provided that such options cannot vest until the twelve-month anniversary of our initial public offering at the earliest; and |
| ● | $15.00, provided that such options cannot vest until the twelve-month anniversary of our initial public offering at the earliest. |
100% of these options were fully vested on November 5, 2022.
We have valued these stock options as follows: (a) for those options that have time-based vesting, we will use the Black-Scholes method to value the stock options at the time of award and record the compensation expense in our Statement of Operations over the vesting period, and (b) for options issued with milestone based vesting criteria, we will use a Monte Carlo simulation to value the options at the time of issuance and each subsequent reporting date until fully vested or expired, with any change in compensation expense measured by such method to be recorded in our Statement of Operations.
The Black-Scholes option pricing model considers, among other factors, the expected term of the award and the expected volatility of our stock price. Due to the lack of an adequate history of a public market for the trading of our ordinary shares, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded with historical share price information sufficient to meet the expected life of the stock-based awards. The Monte Carlo simulation approach is a class of computational algorithms that rely on repeated random sampling to compute their results. This approach allows the calculation of the value of such stock options based on a large number of possible stock price path scenarios. Expense for the market-condition stock options will be recognized over the derived service period as determined through the Monte Carlo simulation model.
Lease Accounting
We assess at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. We apply a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. We recognize lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
At the commencement date of the lease, we recognize lease liabilities measured at the present value of lease payments to be made over the lease term. Lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. Lease payments also include the exercise price of a purchase option reasonably certain to be exercised by us and payments of penalties for terminating the lease, if the lease term reflects us exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, we use our incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
We recognize right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
6
Financial Instruments
(a) Classification
We classify our its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. We determine the classification of financial assets at initial recognition. The classification of debt instruments is driven by our business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition we can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if we have opted to measure them at FVTPL.
(b) Measurement
Financial assets and liabilities at amortized cost
Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.
Financial assets and liabilities at FVTPL
Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of loss and comprehensive loss in the period in which they arise.
Debt investments at FVTOCI
These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVTOCI
These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.
7
Exhibit 99.2
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
(Expressed in US Dollars).
| June 30, | December 31, | |||||||||||
| Note | 2023 | 2022 | ||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash | $ | $ | ||||||||||
| Trade and other receivables, net | 4 | |||||||||||
| Inventories | ||||||||||||
| Prepaid expenses | 5 | |||||||||||
| Total current assets | ||||||||||||
| Property and equipment, net | 6 | |||||||||||
| Intangible assets | 7 | |||||||||||
| Right-of-use assets | 8 | |||||||||||
| Other assets | ||||||||||||
| Total assets | $ | $ | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Current Liabilities | ||||||||||||
| Accounts payable and accrued liabilities | 9 | $ | $ | |||||||||
| Convertible loan | 11 | |||||||||||
| Convertible promissory note at fair value | 11 | |||||||||||
| Convertible debt - related party | 10 | |||||||||||
| Silent partnership | 12 | |||||||||||
| Silent partnership - related party | 12 | |||||||||||
| Payable for acquisition of intangible asset current portion – related party | 7 | |||||||||||
| Lease liabilities | 8 | |||||||||||
| Total current liabilities | ||||||||||||
| Silent partnerships | 12 | |||||||||||
| Silent partnerships - related party | 12 | |||||||||||
| Lease liabilities | 8 | |||||||||||
| Intellectual property acquisition liability - related party | 7 | |||||||||||
| Total liabilities | ||||||||||||
| Shareholders’ equity | ||||||||||||
| Share capital | 13 | |||||||||||
| Share premium | 13 | |||||||||||
| Reserve | 13 | |||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||||||
| Total shareholders’ equity | ||||||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Profit and Loss and Comprehensive Loss
(Unaudited)
(Expressed in US Dollars)
| Three months ended | Six months ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| Note | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||||||
| Cost of revenue | 14 | |||||||||||||||||||
| Gross profit | ||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Sales and marketing | 19 | |||||||||||||||||||
| Research and development | 19 | |||||||||||||||||||
| General and administrative | 19 | |||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ||||||||||||||||||||
| Other income | 16 | |||||||||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Income taxes provision | ||||||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||
| Foreign currency translation gain (loss) | ( | ) | ( | ) | ||||||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||
| $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
| Weighted average number of ordinary shares outstanding | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
(Unaudited)
(Expressed in US Dollars)
For the Three and Six months ended June 30, 2023
| Accumulated | Total | |||||||||||||||||||||||||||||||
| Number of | Share | Share | Accumulated | Other Comprehensive | Shareholders’ Equity | |||||||||||||||||||||||||||
| Note | Shares | Capital | Premium | Reserve | Deficit | Income (loss) | (Deficit) | |||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Sale of ordinary shares | 13 | |||||||||||||||||||||||||||||||
| Share based expenses | 13 | |||||||||||||||||||||||||||||||
| Stock option expense | 13 | - | ||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Sale of ordinary shares | 13 | |||||||||||||||||||||||||||||||
| Share based expenses | 13 | |||||||||||||||||||||||||||||||
| Ordinary shares issued for acquisition of intangible asset | 7, 13 | |||||||||||||||||||||||||||||||
| Ordinary shares issued for commission of issuance of convertible debt | 11, 13 | |||||||||||||||||||||||||||||||
| Ordinary shares issued for cashless exercise of warrants | 13 | ( | ) | |||||||||||||||||||||||||||||
| Stock option expense | 13 | - | ||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
3
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
(Unaudited)
(Expressed in US Dollars)
For the Three and Six months ended June 30, 2022
| Accumulated | Total | |||||||||||||||||||||||||||
| Number of | Share | Share | Accumulated | Other Comprehensive | Shareholders’ Equity | |||||||||||||||||||||||
| Shares | Capital | Premium | Reserve | Deficit | Income (loss) | (Deficit) | ||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
| Sale of ordinary shares | ||||||||||||||||||||||||||||
| Issuance of ordinary shares for exercise of warrants | ( | ) | ||||||||||||||||||||||||||
| Share based expense | ||||||||||||||||||||||||||||
| Stock option expense | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||
| Balance, March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
| Issuance of ordinary shares for exercise of warrants | ( | ) | ||||||||||||||||||||||||||
| Share based expense | - | |||||||||||||||||||||||||||
| Stock option expense | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in US Dollars)
| Six months ended | ||||||||||||
| June 30, | ||||||||||||
| Note | 2023 | 2022 | ||||||||||
| Cash Flows From Operating Activities | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Share based compensation | 13 | |||||||||||
| Depreciation and amortization | ||||||||||||
| Bad debt expense | ||||||||||||
| Accretion expense | 7,12 | |||||||||||
| Change in fair value of convertible debt | ( | ) | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Trade and other receivables | ( | ) | ||||||||||
| Inventory | ( | ) | ( | ) | ||||||||
| Prepaid expenses and other assets | ||||||||||||
| Accounts payable and accrued liabilities | ||||||||||||
| Deferred revenue | ( | ) | ||||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||||||
| Cash Flows From Investing Activities | ||||||||||||
| Purchase of intangible asset | ( | ) | ||||||||||
| Purchase of property and equipment | 6 | ( | ) | ( | ) | |||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||||||
| Cash Flows From Financing Activities | ||||||||||||
| Sale of ordinary shares | 13 | |||||||||||
| Warrant exercise proceeds | ||||||||||||
| Proceeds from issuance of convertible debt | ||||||||||||
| Repayment of loans payable | ( | ) | ( | ) | ||||||||
| Payment of lease obligations | 8 | ( | ) | ( | ) | |||||||
| Net cash provided by financing activities | ||||||||||||
| Effect of changes in exchange rates | ( | ) | ( | ) | ||||||||
| Net change in cash | ( | ) | ||||||||||
| Cash at beginning of period | ||||||||||||
| Cash at end of period | $ | $ | ||||||||||
| Non-Cash Investing And Financing Activities | ||||||||||||
| Right of use asset additions | 8 | $ | $ | |||||||||
| Acquisition of intangible asset for payable and stock payable | 7 | $ | $ | |||||||||
| Interest expense paid | $ | $ | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Mainz Biomed N.V.
Notes to the Condensed Interim Consolidated Financial Statements
(Unaudited)
(Expressed in US dollars)
June 30, 2023
NOTE 1. NATURE OF OPERATIONS AND GOING CONCERN
Mainz Biomed N.V. (the “Company”) is domiciled in the Netherlands. The Company’s registered office is at Keizersgracht 391A, EJ Amsterdam and its headquarters are in Mainz, Germany. The Company was formed to acquire the business of Mainz Biomed Germany GmbH (f/k/a PharmGenomics GmbH (“PharmaGenomics”, “PG”)). In September 2021, the Company completed such acquisition.
We develop in-vitro diagnostic (“IVD”) tests for clinical diagnostics in the area of human genetics, focusing in the areas of personalized medicine, led by our flagship ColoAlert™ product in European markets. We additionally operate a clinical diagnostic laboratory. We develop and distribute our IVD kits to third-party laboratories and through our on-line store.
Throughout these consolidated financial statements, Mainz Biomed N.V. and its wholly owned subsidiaries, Mainz Biomed USA, Inc. and Mainz Biomed GmbH (f/k/a PharmGenomics GmbH), are referred to, collectively and individually as “Mainz”, “Mainz Biomed”, or the “Company”.
Share Exchange
On August 3, 2021, the Company entered into
a contribution agreement (the “Contribution Agreement”) between Mainz Biomed B.V. (“Mainz”), which was a private
company with limited liability under Dutch law incorporated for the purpose of acquiring PharmGenomics. Under the Contribution Agreement,
IPO and Follow-on Equity Offering
In November 2021, the Company completed its initial
public offering (“IPO”) of its ordinary shares on the Nasdaq Capital Market, selling
Going Concern
The Company has recurring losses, accumulated
deficit totaling $
The Company plans to fund its cash flow and working
capital needs through current cash on hand and future debt and/or equity financings which it may obtain through one or more public or
private equity offerings, debt financings, government or other third-party funding, strategic alliances or collaboration agreements. In
December 2022, the Company entered into a $
6
Management believes that the availability of its Controlled Equity Offering and/or Pre Paid Advance Agreement, combined with the potential to execute a financing after the reporting of results from its clinical studies, will provide the financing necessary to fund the Company’s working capital needs for the foreseeable future.
These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. These financial statements do not reflect the adjustments to the carrying values of assets and liabilities, the reported revenues and expenses, and the statement of financial position classifications used, that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.
COVID-19 Impact
On March 11, 2020, the outbreak of the novel strain of coronavirus specifically identified as “COVID-19” was declared a pandemic by the World Health Organization. The outbreak has resulted in governments worldwide enacting emergency measures to combat the spread of the virus which in turn have caused material disruption to business globally. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions and the severity and frequency of new strains of the coronavirus. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.
NOTE 2. BASIS OF PRESENTATION
Basis of Presentation and Statement of Compliance
These condensed interim financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34, “Interim Financial Reporting” using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and International Financial Reporting Interpretations Committee (“IFRIC”). These condensed interim financial statements do not include all of the information required of a full set of annual financial statements and are intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that these condensed interim financial statements be read in conjunction with the annual financial statements of the Company for the year ended December 31, 2022 and notes thereto contained in the Company’s Form 20-F.
These condensed interim financial statements have been prepared on a historical cost basis, modified where applicable. In addition, these condensed interim financial statements have been prepared using the accrual basis of accounting except for cash flow information.
The condensed unaudited interim financial statements were authorized for issuance by the Audit Committee of the Board of Directors on August 11, 2023.
NOTE 3. ACCOUNTING POLICIES, ESTIMATES AND SIGNIFICANT MANAGEMENT JUDGMENTS
Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on a weighted average cost and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
7
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current period presentation.
Critical Accounting Estimates and Significant Management Judgments
The preparation of financial statements in accordance with IFRS requires the Company to use judgment in applying its accounting policies and make estimates and assumptions about reported amounts at the date of the financial statements and in the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.
Useful lives of property and equipment
Estimates of the useful lives of property and equipment are based on the period over which the assets are expected to be available for use. The estimated useful lives are reviewed annually and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence, not electing to exercise renewal options on Leases, and legal or other limits on the use of the relevant assets. In addition, the estimation of the useful lives of the relevant assets may be based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in the factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the property and equipment would increase the recorded expenses and decrease the non-current assets.
Provision for expected credit losses on trade receivables
The provision for expected credit losses on trade receivables are estimated based on historical information, customer concentrations, customer solvency, current economic and geographical trends, and changes in customer payment terms and practices. The Company will calibrate its provision matrix to adjust the historical credit loss experience with forward-looking information. The assessment of the correlation between historical observed default rates, forecast economic conditions and expected credit losses is a significant estimate. The amount of expected credit losses is sensitive to changes in circumstances and of forecast economic conditions. The Company’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.
Estimating the incremental borrowing rate on leases
The Company cannot readily determine the interest rate implicit in leases where it is the lessee. As such, it uses its incremental borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of comparable value to the right-of-use asset in a similar economic environment. IBR therefore reflects what the Company “would have to pay”, which requires estimation when no observable rates are available or where the applicable rates need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.
Estimating the fair value of share-based payment transactions
The Company utilizes a Black-Scholes model, or where appropriate, a Monte-Carlo Simulation to estimate the fair value of its share-based payments. In applying these models, management must estimate the expected future volatility of the Company’s estimated share price and makes such assumptions based on a proxy of publicly-listed entities under an expectation that historical volatility is representative of the expected future volatility. Additionally, estimates have been made by management, in respect of the performance warrants, regarding the length of the vesting period as well as the number of performance warrants that are likely to vest.
8
Estimating the fair value of financial instruments
When the Company recognizes a financial instrument, where there is no active market for such instrument, the Company utilizes alternative valuation methods. The Company utilizes inputs from observable markets to the extent that an appropriate market can be identified, but when there is a lack of such a market, the Company applies judgment to determine a fair value. Such judgments require those such as risk and volatility, of which changes in such assumptions may impact the fair value of the financial instrument.
Other significant judgments
The preparation of these financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s financial statements include:
| ● | The assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty; |
| ● | The determination of the lease term of contracts with renewal and termination options; |
| ● | Determination of the extent to which it is probable that future taxable income will be available to allow all or part of the temporary differences and net operating losses to be utilized; |
| ● | Whether there are indicators of impairment of the Company’s long-lived assets; |
| ● | Development costs do not meet the conditions for capitalization in accordance with IAS 38 and therefore all research and development costs have been expensed as incurred. |
NOTE 4. TRADE AND OTHER RECEIVABLES
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Accounts receivable, net | ||||||||
| VAT receivable, net | ||||||||
| Other | ||||||||
| $ | $ | |||||||
For the six months ended June 30, 2023, the Company
recorded bad debt reserve of $
NOTE 5. PREPAID AND OTHER CURRENT ASSETS
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Other prepaid expense | ||||||||
| Security deposit | ||||||||
| $ | $ | |||||||
9
NOTE 6. PROPERTY AND EQUIPMENT
| Laboratory equipment | Office equipment | Construction in progress | Total | |||||||||||||
| Cost | ||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | $ | ||||||||||||
| Additions | ||||||||||||||||
| Disposal | ||||||||||||||||
| Effects of currency translation | ||||||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | $ | ||||||||||||
| Accumulated depreciation | ||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | $ | ||||||||||||
| Depreciation | ||||||||||||||||
| Disposal | ||||||||||||||||
| Effects of currency translation | ||||||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | $ | ||||||||||||
| Net book value at June 30, 2022 | $ | $ | $ | $ | ||||||||||||
| Net book value at June 30, 2023 | $ | $ | $ | $ | ||||||||||||
NOTE 7. INTANGIBLE ASSET
Our flagship product is ColoAlert, a colorectal
cancer (“CRC”) screening test. On January 1, 2019, we entered into an exclusive licensing agreement (the “Licensing
Agreement”) with ColoAlert AS to license the intellectual property related to the ColoAlert test. On February 11, 2021, we obtained
an option exercisable for three years to acquire the intellectual property for the ColoAlert test for (i) either a one-time cash payment
of €
On February 15, 2023, we entered into an Intellectual
Property Asset Purchase Agreement (“IPA”), which supersedes the Licensing and Options Agreements. Pursuant to the IPA, we
acquired the intellectual property underlying the ColoAlert test. Pursuant to the IPA, we were able to reduce the price paid for the intellectual
property to (i) $
NOTE 8. LEASES
Right-of-Use Assets
| Office | Laboratory | Lab and | ||||||||||||||||||
| Equipment | Equipment | Vehicle | Office Space | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| Additions | ||||||||||||||||||||
| Effects of currency translation | ||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | $ | $ | |||||||||||||||
| Accumulated amortization | ||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| Depreciation | ||||||||||||||||||||
| Effects of currency translation | ||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | $ | $ | |||||||||||||||
| Net book value at June 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| Net book value at June 30, 2023 | $ | $ | $ | $ | $ | |||||||||||||||
As of June 30, 2023, management assessed that there were no events or changes in circumstances that would require impairment testing.
10
The carrying amount of the right-of-use assets
is amortized on a straight-line basis over the life of the leases, which at June 30, 2023, had an average expected life of
Lease Liabilities
| Total | ||||
| Balance as of December 31, 2022 | $ | |||
| Additions | ||||
| Interest expenses | ||||
| Lease payments | ( | ) | ||
| Effects of currency translation | ||||
| Balance as of June 30, 2023 | $ | |||
| Lease liabilities | June 30, 2023 | December 31, 2022 | ||||||
| Current portion | $ | $ | ||||||
| Long-term portion | ||||||||
| Total lease liabilities | $ | $ | ||||||
| Maturity analysis | June 30, 2023 | |||
| Less than one year | $ | |||
| One to two years | ||||
| Two to three years | ||||
| Three to four years | ||||
| Four to five years | ||||
| More than five years | ||||
| Total undiscounted lease liabilities | $ | |||
| Amount representing implicit interest | ( | ) | ||
| Lease obligations | $ | |||
11
NOTE 9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Payroll liabilities | ||||||||
| $ | $ | |||||||
NOTE 10. CONVERTIBLE DEBT – RELATED PARTY
During the years ended December 31, 2019 and 2020,
the Company entered into loan agreements with related parties totaling EUR
The 2019 and 2020 Convertible Loans were determined
to be a financial instrument comprising an equity classified conversion feature with a host debt component. On initial recognition, the
Company used the residual value method to allocate the principal amount of the 2019 and 2020 Convertible Loans between the two components.
The host debt component was valued first, based on similar debt securities without an embedded conversion feature and the residual was
allocated to the equity-classified conversion feature. The Company recognized debt discounts totaling EUR
As of June 30, 2023 and December 31, 2022, the
Company’s Convertible Debt – Related Party is $
NOTE 11. CONVERTIBLE DEBT
Convertible Loans
In November 2017, the Company entered into
loan agreements with two shareholders of the Company for loans totaling EUR
Convertible Promissory Note
On June 28, 2023, we
entered into a Pre-Paid Advance Agreement (the “PPA”) with YA II PN, Ltd. (“Holder”). Pursuant to the PPA, we
may request that the Holder purchase from us up to $
12
Each Promissory Notes
matures
The Promissory Notes
are convertible at the Holder’s discretion into our ordinary shares at a conversion price (the “Conversion Price”) equal
to the lower of (a) (I) $
Under the Promissory
Notes, a “Trigger Event” occurs if the trading price of an ordinary share is lower than the applicable Floor Price for any
five of seven consecutive trading days. Within five trading days of a Trigger Event, we must make a monthly cash payment to the Holder
in connection with the Promissory Notes (the “Monthly Payment”) equal to the lesser of (i) $
In connection
with the execution of the PPA, we agreed to pay a commitment fee of $
The Company elected to
account for the Promissory Note at fair value as of the June 28, 2023 issuance date. Management believes that the fair value option appropriately
reflects the underlying economics of the Promissory Notes. Under the fair value election, changes in fair value will be reported in the
consolidated statements of operations, under change in fair value of debt instrument, in each reporting period subsequent to the issuance
of the Promissory Note. The Initial Promissory Note has a face value of $
We classified this fair value as a Level 3 fair value measurement and used a fair value pricing model to calculate the fair value as of June 28, 2023 and June 30, 2023. Key inputs for the fair value model are summarized below.
| June 28, | June 30, | |||||||
| 2023 | 2023 | |||||||
| Stock price | $ | $ | ||||||
| Expected life in years | ||||||||
| Risk free rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Discount rate | % | % | ||||||
13
NOTE 12. SILENT PARTNERSHIPS
During the year ended December 31, 2020,
During the year ended December 31, 2020, the Company
entered into silent partnership agreements whereby the lender agreed to lend a total of EUR
In 2010, the Company entered into a silent partnership
agreement whereby the lender agreed to lend the Company EUR
14
| 3% SPAs | 3.5% SPAs | 8.5% SPAs | 8% SPAs | Total | ||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| Issued during the year | ||||||||||||||||||||
| Extinguished during the year | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Discount | ||||||||||||||||||||
| Accretion | ||||||||||||||||||||
| Interest expense | ||||||||||||||||||||
| Effects of currency translation | ||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | |||||||||||||||
NOTE 13. EQUITY
Ordinary shares
The Company has
Controlled Equity Offering
In December 2022, the Company entered into a Controlled
Equity Offering, known as an “ATM” facility. Pursuant to the ATM, the Company at its discretion and subject to an effective
registration statement with the U.S. Securities and Exchange Commission, may sell through its agent ordinary shares at market prices,
for a fee of
In addition, during the six months ended June 30, 2023, the Company issued ordinary shares as follows:
| ● |
| ● |
| ● |
| ● |
Warrants
During the year ended December 31, 2021, in conjunction
with private sales units, which included ordinary shares and warrants, the Company issued
| Stock price at time of issuance | $ | |||
| Exercise price | $ | |||
| Expected term | ||||
| Expected average volatility | % | |||
| Expected dividend yield | ||||
| Risk-free interest rate | % |
15
| Warrant | Weighted-Average | Weighted-Average | ||||||||||
| Outstanding | Exercise Price | Life (years) | ||||||||||
| Balance as of December 31, 2022 | $ | | ||||||||||
| Grants | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Expired | ||||||||||||
| Balance as of June 30, 2023 | $ | |||||||||||
Stock options
During 2021, we adopted our 2021 Omnibus Incentive
Plan, and on June 28, 2022 we adopted our 2022 Omnibus Incentive Plan (the “Plans”). Under the Plans, we are authorized to
issue equity incentives in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units,
share appreciation rights, performance units or performance shares under separate award agreements. Under the Plans, the aggregate number
of shares underlying awards that we could issue cannot exceed
During the six months ended June 30, 2023, the
Company granted
During the six months ended June 30, 2023, the
Company recorded stock based compensation of $
For the six months ended June 30, 2023, the estimated fair values of the stock options are as follows:
| June 30, | ||||
| 2023 | ||||
| Exercise price | $ | | ||
| Expected term | ||||
| Expected average volatility | % | |||
| Expected dividend yield | - | |||
| Risk-free interest rate | % |
A summary of activity during the six months ended June 30, 2023 follows:
| Stock options | Weighted-Average | Weighted-Average | ||||||||||
| Outstanding | Exercise Price | Life (years) | ||||||||||
| Balance as of December 31, 2022 | $ | | | |||||||||
| Grants | ||||||||||||
| Exercised | ||||||||||||
| Forfeited | ( | ) | ||||||||||
| Expired | ||||||||||||
| Balance as of June 30, 2023 | $ | |||||||||||
| Exercisable as of June 30, 2023 | $ | |||||||||||
16
NOTE 14. COST OF REVENUE
For the six months ended June 30, 2023 and 2022, cost of revenue consisted of test kit materials, both patient collection kits and lab based PCR kits.
NOTE 15. RELATED PARTY TRANSACTIONS
Key management personnel include those persons
having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has
determined that key management personnel consist of members of the Company’s Board, its Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer, Chief Commercial Officer and Chief Scientific Officer.
| Six months ended | ||||||||
| June 30, | ||||||||
| 2023 | 2022 | |||||||
| Salaries and benefits | $ | $ | ||||||
| Six months ended | ||||||||
| June 30, | ||||||||
| 2023 | 2022 | |||||||
| Salaries and benefits | $ | $ | ||||||
During the six months ended June 30, 2023 and
2022, the Company incurred interest expense of $
During the six months ended June 30, 2023 and
2022, the Company incurred accretion expense of $
During the six months ended June 30, 2023 and
2022, we recorded expenses of $
NOTE 16. GOVERNMENT GRANTS
The Company receives government grants related
to its research and development activities.
| Six months ended | ||||||||
| June 30, | ||||||||
| Research and Development Projects | 2023 | 2022 | ||||||
| Rapid detection of antibody-based pathogens | $ | $ | ||||||
| Multi-marker test for the early detection of pancreatic cancer | ||||||||
| $ | $ | |||||||
As of June 30, 2023 and December 31, 2022, the
grants for rapid detection of antibody-based pathogens and a multi-marker test for the early detection of pancreatic cancer had remaining
grant balances of approximately $
17
NOTE 17. FINANCIAL INSTRUMENT RISK MANAGEMENT
Basis of Fair Value
Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:
| ● | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
| ● | Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and |
| ● | Level 3 — Inputs that are not based on observable market data. |
The Company’s financial instruments consist of cash, trade and other receivables, accounts payable and accrued liabilities, lease liabilities, convertible debentures, and loans payable. With the exception of convertible debentures and loans payable, the carrying value of the Company’s financial instruments approximate their fair values due to their short-term maturities. The fair value of convertible debentures and notes payable approximate their carrying value, excluding discounts, due to minimal changes in interest rates and the Company’s credit risk since issuance of the instruments.
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures.
Credit Risk
The Company’s principal financial assets
are cash and trade receivables. The Company’s credit risk is primarily concentrated in its cash which is held with institutions
with a high credit worthiness. The Company carries cash balances at US financial institutions that exceed the federally insured limit
of $
Management believes that the Company is not exposed to any significant credit risk with respect to its cash.
The Company mitigates its credit risk on receivables
by actively managing and monitoring its receivables. During the six months ended June 30, 2023, the Company incurred $
Liquidity Risk
Liquidity risk is the risk that the Company will
not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine
the funds required to support the Company’s normal operating requirements on an ongoing basis. As of June 30, 2023, the Company
had an unrestricted cash balance of $
Historically, the Company’s primary source of funding has been the issuance of ordinary shares and credit facility borrowings. The Company’s access to financing is always uncertain. There can be no assurance of continued access to equity or debt financing.
18
| Within | More than | More than | ||||||||||
| one year | one year | five years | ||||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | |||||||||
| Convertible promissory note to be settled with ordinary shares | ||||||||||||
| Convertible loans | ||||||||||||
| Silent partnerships | ||||||||||||
| Lease liabilities | ||||||||||||
| Payable for acquisition of intangible asset - related party | ||||||||||||
| $ | $ | $ | ||||||||||
Foreign Exchange Risk
Foreign currency risk is the risk that the fair
values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective
functional currency.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as its financial liabilities carry interest at fixed rates.
Capital Management
In the management of capital, the Company includes components of stockholders’ equity. The Company aims to manage its capital resources to ensure financial strength and to maximize its financial flexibility by maintaining strong liquidity and by utilizing alternative sources of capital including equity, debt and bank loans or lines of credit to fund continued growth. The Company sets the amount of capital in proportion to risk and based on the availability of funding sources. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. As a young growth company, issuance of equity has been the primary source of capital to date. Additional debt and/or equity financing may be pursued in future as deemed appropriate to balance debt and equity. To maintain or adjust the capital structure, the Company may issue new shares, take on additional debt or sell assets to reduce debt.
NOTE 18. CONCENTRATIONS
Major customers are defined as customers that
each individually account for greater than
19
NOTE 19. OPERATING EXPENSES
| Six months Ended | ||||||||
| June 30, | ||||||||
| Research and development | 2023 | 2022 | ||||||
| Payroll expenses | $ | $ | ||||||
| Clinical study expenses | ||||||||
| Depreciation and amortization | ||||||||
| Travel expenses | ||||||||
| Lab consumables | ||||||||
| Other expenses | ||||||||
| $ | $ | |||||||
| Six months Ended | ||||||||
| June 30, | ||||||||
| Sales and marketing | 2023 | 2022 | ||||||
| Payroll | $ | $ | ||||||
| Consulting services | ||||||||
| Product and brand advertising | ||||||||
| Other expenses | ||||||||
| $ | $ | |||||||
| Six months Ended | ||||||||
| June 30, | ||||||||
| General and administrative | 2023 | 2022 | ||||||
| Payroll | $ | $ | ||||||
| Stock option expense | ||||||||
| Depreciation and amortization | ||||||||
| Travel and car expenses | ||||||||
| Consulting services | ||||||||
| IT expense | ||||||||
| Training | ||||||||
| Insurance and taxes | ||||||||
| Rent and Premises | ||||||||
| Other expenses | ||||||||
| $ | $ | |||||||
NOTE 20. SUBSEQUENT EVENTS
Subsequent to June 30, 2023, pursuant to the PPA
(see Note 11), the Holder converted $
20
Exhibit 99.3
Mainz Biomed Announces Financial Half Year Results 2023 and Provides Corporate Update
ColoAlert® Revenue Increases 108% Year Over Year in the First Six Months of 2023
ColoFuture and eAArly Detect Studies on Track to Report Results in September and in Q4, 2023
BERKELEY, US – MAINZ, Germany – August 15, 2023 — Mainz Biomed N.V. (NASDAQ:MYNZ) (“Mainz Biomed” or the “Company”), a molecular genetics diagnostic company specializing in the early detection of cancer, announced today the results of the first six months and second quarter ending June 30, 2023 and provided a corporate update.
Key Highlights During Q2 2023
| ● | ColoAlert® revenues for the first six months of 2023 were USD $499,049, representing an increase of 108% compared to the first half of 2022. |
| ● | Expanded international commercialization for ColoAlert®, a highly efficacious and easy-to-use DNA-based detection test for colorectal cancer (CRC) being sold via the Company’s unique business model of marketing products via partnerships with third-party laboratories versus the traditional methodology of operating a single facility. |
| ● | Launched ColoAlert®’s commercial activities in Poland, Portugal, and Romania while growing its network of laboratory partnerships in established markets across Europe in Q2 as well as post-period. |
| ● | Grew corporate health program within Germany’s “BGM” system which provides health services to employees – Germany’s total BGM market represents a €1 billion per annum opportunity. |
| ● | U.S. Pivotal Clinical Trial (ReconAAsense) remains on track to commence patient enrollment – Opportunity to achieve gold-standard status for self-administered CRC screening. |
| ● | Continued executing European and U.S. clinical studies (ColoFuture/eAArly DETECT) evaluating portfolio of novel gene expression (mRNA) biomarkers for potential inclusion in ReconAAsense – Company plans to report results from its ColoFuture and eAArly DETECT feasibility studies in September and in the fourth quarter of 2023. |
| ● | Established partnership with Microba Life Sciences to explore the discovery and potential integration of novel microbiome biomarkers into pipeline asset PancAlert, a potential first-in-class screening test for pancreatic cancer. |
“I’m extremely pleased with the progress achieved during the second quarter as we execute our ambitious corporate growth strategy anchored by ColoAlert®’s commercial franchise and our product development pipeline,” commented Guido Baechler, Chief Executive Officer of Mainz Biomed “We head into the second half of 2023 with a great deal of momentum as ColoAlert® continues to gain commercial traction across Europe and in select international territories, we ramp-up enrollment planning for the ReconAAsense U.S. pivotal CRC study, execute our clinical trials evaluating a portfolio of proprietary novel gene expression (mRNA) biomarkers for potential inclusion into ReconAAsense, and advance PancAlert, a next-generation pancreatic cancer detection test.”
Commercial Update: Launched ColoAlert® in three European markets, expanded network of laboratory partners in existing territories & grew corporate health program in Germany
During the quarter, Mainz Biomed continued ColoAlert®’s European commercial roll-out by entering the Polish, Portuguese, and Romanian markets. In Poland, the Company established its footprint by partnering with TESTDNA Sp. z o.o. Sp. k. Katowice, one of the Country’s leading independent laboratories. The total addressable market in Poland is estimated to be 21 million patients and, according to Digestive Cancers Europe, Poland shows a particularly high need for reliable non-invasive screening methods, with only about one in five patients willing to use colonoscopy for screening. Furthermore, the incidence in Poland of 19,000 new cases diagnosed annually with approximately 12,000 colorectal cancer-related deaths, confirms the need for at-home screening tests with good early-stage detection.
In Romania, Mainz Biomed launched ColoAlert®’s commercialization through a partnership with Bioclinica, a state-of-the art diagnostics company and supplier of healthcare products. Bioclinica manages 15 laboratories and 146 collection points across the country. Summarizing from data contained in the United Nations, Department of Economic and Social Affairs population statistics, ColoAlert® screening has the potential to benefit over six million individuals aged between 50 and 74 years in Romania where the CRC incidence rates are among the highest in Europe.
In Portugal, Mainz BioMed commenced commercialization by expanding its partnership with Instituto de Microecologia which initially launched ColoAlert® in Spain (February 2023). For more than 60 years, the Instituto de Microecologia has been a pioneer in microbiota studies and food sensitivity, focused on disseminating the importance of intestinal health through microbiological analysis and diagnosis of microbiota profiles and specific health parameters. According to the World Cancer Research Fund International, CRC is the third most common cancer worldwide and Portugal ranks seventh in total global CRC rates with 10,501 cases reported in 2020.
Mainz Biomed is providing ColoAlert® to TESTDNA, Bioclinica and Instituto de Microecologia under the standard terms of the Company’s partnership agreements.
In addition to commercial launches of ColoAlert® in new European markets, a key highlight during the second quarter was the continued expansion of Mainz Biomed’s network of independent laboratories in countries where the Company has already established a commercial foothold. In its home market, the Company announced a partnership with Eurofins GeLaMed which manages four locations throughout Germany and is part of Eurofins Scientific, an international laboratory group with more than 61,000 employees in 61 countries, conducting more than 450 million tests annually. According to GeLaMed, in the German market, it processes over 15,000 orders each working day covering more than 2,000 different analytical methods from its laboratory medicine and microbiology portfolios under the direction of medical specialists.
2
Throughout the second quarter, the Company continued to ramp-up its corporate health program through its flagship initiative in Germany via integration of its test into BGM (“betriebliches Gesundheitsmanagement”), an established corporate health initiative providing services to employees at 48 of the 50 largest companies in the country. Through corporate health management programs such as BGM, best-in-class companies in Germany offer employees healthcare services ranging from gym memberships to diabetes management to counseling, all to better their health. Key highlights during the quarter included adding three new companies to the program and commencing patient processing from a CRC screening campaign being conducted in partnership with Zöller-Kipper GmbH, part of the Kirchhoff group with more than 2,500 employees. Using Mainz Biomed’s online portal which was built to serve participants in the Company’s corporate health program, Zöller-Kipper employees registered to be mailed the ColoAlert® test. Once the sample was received and processed, confidential test results were sent back to the employee through the portal, along with an explanation of the results. If an employee had approved for a physician to be notified of test results, then the doctor could directly follow-up with the patient. As part of its commitment to the BGM program, Mainz Biomed provided education to employees and physicians on CRC and recommendations for next steps.
Product Development Update: ReconAAsense U.S. pivotal clinical trial, ColoFuture/eAArly DETECT clinical studies & pancreatic test development
Throughout the second quarter, Mainz Biomed continued to prepare for commencing patient enrollment in the ReconAAsense study (ClinicalTrials.gov Identifier: NCT05636085). This U.S. pivotal clinical trial assessing Mainz Biomed’s CRC test will form the basis of the data package for review by the U.S. Food and Drug Administration (FDA) to achieve marketing authorization. It will include approximately 15,000 subjects from 150 sites across the U.S. The study’s primary objectives include calculating sensitivity, specificity, positive predictive value (PPV) and negative predictive value (NPV) in average-risk subjects for CRC and AA.
Additionally, Mainz Biomed continued executing its ColoFuture (Europe) and eAArly DETECT (U.S.) studies evaluating the Company’s proprietary portfolio of novel gene expression (mRNA) biomarkers for possible inclusion in the ReconAAsense trial because they have previously demonstrated ability to detect CRC lesions, including Advanced Adenoma, a type of pre-cancerous polyp often attributed to this deadly disease.
The eAArly DETECT clinical trial, remains on track to report results during Q4, 2023. The multi-center feasibility study is enrolling 250 subjects across 25 sites in the U.S. The international multi-center ColoFuture study continued enrolling patients in Europe (recruiting over 600 patients in the age range of 40-85) with results expected during Q3, 2023. If any of the biomarkers are integrated into the ReconAAsense trial and the study produces positive results, this next iteration of Mainz Biomed’s CRC test will be positioned as one of the most robust and accurate at-home diagnostic screening solution on the market, as it will not only detect cancerous polyps with a high degree of accuracy but has the potential to prevent CRC through early detection of precancerous adenomas. To this end, a promising research milestone was achieved during the first quarter when Mainz Biomed announced positive results from an independent feasibility study conducted in collaboration with members of the Early Detection Research Network (EDRN) to evaluate the same portfolio of gene expression biomarkers. Key findings included Mainz Biomed’s proprietary nucleic acid extraction and PCR process proved to be highly effective, and two of the mRNA biomarkers were found to be particularly valuable in detecting disease signals in advanced adenoma samples.
3
During the quarter, Mainz Biomed continued to conduct pre-clinical work on PancAlert, the Company’s novel and potential first-in-class early detection test for pancreatic cancer, a malignant neoplasm of the pancreas with one of the highest mortality rates of all major cancers. An important highlight, in the context of optimizing the technical profile of the test, was the establishment of a research partnership with Microba Life Sciences (ASX: MAP), a precision microbiome company that is built around a unique metag platform technology with the ability to produce comprehensive and accurate species profiles of human gastrointestinal samples. The collaboration is focusing on leveraging this sequencing technology and bioinformatic tool to potentially discover novel microbiome biomarkers for pancreatic cancer detection for integration into PancAlert’s technical configuration.
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
During the six months ended June 30, 2023, the Company saw its revenue from ColoAlert® grow 108% compared to the same period of 2022, with gross margins expanding from 53% to 58%. During the reporting period, the Company’s operating loss grew from USD 12.6 million to USD 14.7 million, when compared to the first six months of 2022. This increased loss was attributable to growth of sales and marketing and research and development (R&D) costs, mitigated by a decrease in general and administrative costs. Sales and marketing expenses increased as planned due to the expansion of the Company’s commercial activities in Europe. The increased research and development expenses are attributable to the continued development of Mainz Biomed’s next generation colorectal cancer screening test and increased R&D costs related to the peak enrollment in its eAArly Detect and ColoFuture studies.
The Company has filed a current report on Form 6-K on August 15, 2023, with the U.S. Securities and Exchange Commission, which includes both consolidated financial statements and management’s discussion and analysis of its financial results for the second quarter of 2023. Summary financial tables are included below.
4
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Financial Position (Unaudited)
(in U.S. Dollars)
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 10,911,087 | $ | 17,141,775 | ||||
| Trade and other receivables, net | 370,931 | 259,138 | ||||||
| Inventories | 387,178 | 175,469 | ||||||
| Prepaid expenses | 455,934 | 801,959 | ||||||
| Total Current Assets | 12,125,130 | 18,378,341 | ||||||
| Property and equipment, net | 1,617,228 | 661,692 | ||||||
| Intangible asset | 3,630,384 | — | ||||||
| Right-of-use asset | 1,932,258 | 1,177,695 | ||||||
| Other asset | 106 | 23,275 | ||||||
| Total assets | $ | 19,305,106 | $ | 20,241,003 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 4,720,145 | $ | 2,916,679 | ||||
| Current maturities of long term debt | 5,515,240 | 1,040,573 | ||||||
| Lease liabilities | 472,767 | 285,354 | ||||||
| Total current liabilities | 10,708,152 | 4,242,606 | ||||||
| Long term debt | 984,461 | 943,214 | ||||||
| Lease liabilities | 1,560,408 | 959,116 | ||||||
| Intellectual property acquisition liability - related party | 874,698 | — | ||||||
| Total Liabilities | 14,127,719 | 6,144,936 | ||||||
| Shareholders’ equity | ||||||||
| Share capital | 175,785 | 164,896 | ||||||
| Share premium | 43,212,004 | 38,831,542 | ||||||
| Reserve | 19,732,949 | 18,079,741 | ||||||
| Accumulated deficit | (57,844,937 | ) | (43,032,294 | ) | ||||
| Accumulated other comprehensive income | (98,414 | ) | 52,182 | |||||
| Total shareholders’ equity | 5,177,387 | 14,096,067 | ||||||
| Total liabilities and shareholders’ equity | $ | 19,305,106 | $ | 20,241,003 | ||||
5
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Profit and Loss and Comprehensive Loss (Unaudited)
(in U.S. Dollars)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | $ | 248,945 | $ | 139,240 | $ | 499,049 | $ | 239,805 | ||||||||
| Cost of revenue | 100,147 | 58,427 | 211,310 | 112,563 | ||||||||||||
| Gross Profit | 148,798 | 80,813 | 287,739 | 127,242 | ||||||||||||
| 60 | % | 58 | % | 58 | % | 53 | % | |||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 1,799,569 | 1,866,384 | 4,085,661 | 2,788,014 | ||||||||||||
| Research and development | 3,478,595 | 229,916 | 5,736,373 | 793,488 | ||||||||||||
| General and administrative | 2,796,724 | 4,932,422 | 4,879,351 | 9,125,207 | ||||||||||||
| Total operating expenses | 8,074,888 | 7,028,722 | 14,701,385 | 12,706,709 | ||||||||||||
| Loss from operations | (7,926,090 | ) | (6,947,909 | ) | (14,413,646 | ) | (12,579,467 | ) | ||||||||
| Other income (expense) | (325,637 | ) | 9,198 | (398,997 | ) | (22,980 | ) | |||||||||
| Income (loss) before income tax | (8,251,727 | ) | (6,938,711 | ) | (14,812,643 | ) | (12,602,447 | ) | ||||||||
| Income taxes provision | — | — | — | — | ||||||||||||
| Net loss | $ | (8,251,727 | ) | $ | (6,938,711 | ) | $ | (14,812,643 | ) | $ | (12,602,447 | ) | ||||
| Foreign currency translation gain (loss) | (90,024 | ) | 46,204 | (150,596 | ) | 82,643 | ||||||||||
| Comprehensive loss | $ | (8,341,751 | ) | $ | (6,892,507 | ) | $ | (14,963,239 | ) | $ | (12,519,804 | ) | ||||
| Basic and dilutive loss per ordinary share | $ | (0.56 | ) | $ | (0.48 | ) | $ | (1.01 | ) | $ | (0.91 | ) | ||||
| Weighted average number of ordinary shares outstanding | 14,915,905 | 14,286,157 | 14,803,243 | 13,821,914 | ||||||||||||
About Mainz Biomed NV
Mainz Biomed develops market-ready molecular genetic diagnostic solutions for life-threatening conditions. The Company’s flagship product is ColoAlert®, an accurate, non-invasive and easy-to-use, early-detection diagnostic test for colorectal cancer based on real-time Polymerase Chain Reaction-based (PCR) multiplex detection of molecular-genetic biomarkers in stool samples. ColoAlert® is currently marketed across Europe. The Company is running a pivotal FDA clinical study for US regulatory approval. Mainz Biomed’s product candidate portfolio also includes PancAlert, an early-stage pancreatic cancer screening test. To learn more, visit mainzbiomed.com or follow us on LinkedIn, Twitter/X and Facebook.
For media inquiries -
In Europe:
MC Services AG
Anne Hennecke/Caroline Bergmann
+49 211 529252 20
mainzbiomed@mc-services.eu
In the U.S.:
Josh Stanbury
+1 416 628 7441
josh@sjspr.co
For investor inquiries, please contact info@mainzbiomed.com
6
Forward-Looking Statements
Certain statements made in this press release are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, actual results may differ materially from the Company’s expectations or projections. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: (i) the failure to meet projected development and related targets; (ii) changes in applicable laws or regulations; (iii) the effect of the COVID-19 pandemic on the Company and its current or intended markets; and (iv) other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with the Securities and Exchange Commission (the “SEC”) by the Company. Additional information concerning these and other factors that may impact the Company’s expectations and projections can be found in its initial filings with the SEC, including its annual report on Form 20-F filed on April 7, 2023. The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov. Any forward-looking statement made by us in this press release is based only on information currently available to Mainz Biomed and speaks only as of the date on which it is made. Mainz Biomed undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.
7