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 six 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 ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) ☐
Other Events
On September 7, 2022, Mainz BioMed N.V. made available its Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2022. A copy of the report is attached hereto as Exhibit 99.1.
On September 7, 2022, Mainz BioMed N.V. made available its Half-Year Statements for the six months ended June 30, 2022. 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 September 7, 2022, announcing the Company’s results for the six months ended June 30, 2022.
| Exhibit No. | Exhibit | |
| 99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations of Mainz BioMed N.V. for the six months ended June 30, 2022 | |
| 99.2 | Half-Year Financial Statements of Mainz BioMed N.V. for the six months ended June 30, 2022 | |
| 99.3 | Press Release dated September 7, 2022 | |
| 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). |
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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: September 7, 2022 | By: | /s/ William J. Caragol |
| Name: | William J. Caragol | |
| Title | Chief Financial Officer |
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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, 2021 on Form 20-F, filed with the Securities and Exchange Commission on May 3, 2022. 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
Mainz Biomed N.V. was incorporated for the purpose of acquiring Mainz Biomed Germany GmbH (f/k/a PharmGenomics GmbH). On August 3, 2021, we entered into a contribution agreement (the “Contribution Agreement”) with PharmGenomics GmbH. Under the Contribution Agreement, 100% of the shares of the PharmGenomics GmbH were acquired in exchange for 6,000,000 shares of Mainz Biomed N.V. Upon the closing of the Contribution Agreement on September 20, 2021, PharmGenomics GmbH became a wholly owned subsidiary of Mainz Biomed N.V., with the former shareholders of the PharmGenomics GmbH holding approximately 62% of the outstanding shares of Mainz Biomed N.V. at the closing of the Contribution Agreement.
Pursuant to the accounting guidance provided by IFRS 10 and IFRS 3.7 and B13, we have determined that for accounting purposes the merger of Mainz BioMed N.V. and PharmGenomics GmbH should be treated as a reverse acquisition by PharmGenomics GmbH, with PharmGenomics being the accounting acquirer, and Mainz BioMed N.V. as the acquired company. As such, the assets and liabilities of PharmGenomics have been presented at their historical carrying values. Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we refer to Mainz Biomed N.V. and its wholly owned subsidiaries, Mainz Biomed Germany GmbH (f/k/a PharmGenomics GmbH) and Mainz Biomed USA, Inc., as “Mainz Biomed” or the “Company”.
We develop in-vitro diagnostic (“IVD”) tests for clinical diagnostics in the area of human genetics, focusing in the areas of personalized medicine. We additionally operate a clinical diagnostic laboratory. We develop and distribute our IVD kits to third party laboratories, who in turn provide diagnostic analysis for their patients. The majority of our revenues in 2022 comes from the sale of our IVD kits under the brand name ColoAlert™.
In addition, we conduct research and development in order to increase and diversify our product portfolio. Currently, we are managing two government funded research and development projects, which provide us non-refundable grant income that covers a percentage of the individual project related costs. Our PancAlert product candidate research is 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 Six Months Ended June 30, 2022 and 2021
The following table provides certain selected financial information for the periods presented:
| Six Months Ended June 30, | ||||||||||||||||
| 2022 | 2021 | Change | % Change | |||||||||||||
| Revenue | $ | 239,805 | $ | 417,311 | $ | (177,506 | ) | (43 | )% | |||||||
| Cost of revenue | $ | 119,005 | $ | 64,772 | $ | 54,233 | 84 | % | ||||||||
| Gross profit | $ | 120,800 | $ | 352,539 | $ | (231,739 | ) | (86 | )% | |||||||
| Gross Margin | 50 | % | 84 | % | ||||||||||||
| Research and Development | $ | 911,716 | $ | 206,146 | $ | 705,570 | 342 | % | ||||||||
| Sales and Marketing | $ | 2,520,496 | $ | 150,335 | $ | 2,370,161 | 1,577 | % | ||||||||
| General and Administrative | $ | 9,268,054 | $ | 250,692 | $ | 9,017,362 | 3,597 | % | ||||||||
| Total operating expenses | $ | 12,700,266 | $ | 607,173 | $ | 12,093,093 | 1,992 | % | ||||||||
| Loss from operations | $ | (12,579,466 | ) | $ | (254,634 | ) | $ | (12,324,832 | ) | (4,840 | )% | |||||
| Other expense | $ | 22,981 | $ | 7,087 | $ | (15,894 | ) | (224 | )% | |||||||
| Net loss | $ | (12,602,447 | ) | $ | (261,721 | ) | $ | (12,340,726 | ) | (4,715 | )% | |||||
| Total Comprehensive Loss | $ | (12,519,804 | ) | $ | (178,758 | ) | $ | (12,341,046 | ) | (6,904 | )% | |||||
| Basic and dilutive loss per common share | $ | (0.91 | ) | $ | (0.05 | ) | $ | (0.86 | ) | (1,720 | )% | |||||
| Weighted average number of common shares outstanding – basic and diluted | 13,821,914 | 5,607,246 | ||||||||||||||
Revenue
Revenue for the six months ended June 30, 2022 was $239,805 as compared to $417,311 for the six months ended June 30, 2021, a decrease of $177,506. This decrease was the result of our ceasing third-party laboratory testing and lab support related to support of COVID-19 diagnostic testing during the pandemic, and other non-core sales. Our revenue attributable to ColoAlert was $238,255 for the six-month ended June 30, 2022, compared to $104,851 during the comparable period last year, an increase of 127%. Our ColoAlert revenue in both six-month periods 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.
Our revenue by product and service category is as follows:
| Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| ColoAlert | $ | 238,255 | $ | 104,851 | ||||
| Third-party lab testing and support | - | 261,019 | ||||||
| Research use only product sales | - | 37,812 | ||||||
| Other revenue | 1,550 | 13,630 | ||||||
| Total Revenue | $ | 239,805 | $ | 417,311 | ||||
Cost of Revenue
Cost of Revenue for the six months ended June 30, 2022 was $119,005 as compared to $64,772 for the six months ended June 30, 2021, an 84% increase. This increase was the result of increased ColoAlert sales volume.
Gross profit
Gross profit decreased to $120,800 from $352,539, for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021. This gross profit decrease was due to the decrease in total revenue as the result of our ceasing third-party laboratory testing and lab support related to support of COVID-19 diagnostic testing during the pandemic.
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Research and Development Expenses
Research and development expenses for the six months ended June 30, 2022 were $911,716 compared to $206,146 for the six months ended June 30, 2021, an increase of $705,570. This increase was driven by increases in labor costs and office and lab lease expenses to support our increased staffing. Labor costs (salary and consulting costs) increased by $506,781 for the six months ended June 30, 2022, compared to the same period in 2021. Lab and office expenses increased by $116,007 for the six months ended June 30, 2022, compared to the same period in 2021; and material used in our research programs was $71,503 in the six months ended June 30, 2022, and nil in the same period of 2021. Our increases in research and development expenses are the result of our continued development of our ColoAlert product and research related to our PancAlert product candidate.
Sales and Marketing Expenses
Sales and marketing expenses for the six months ended June 30, 2022, were $2,520,496 compared to $150,335 for the six months ended June 30, 2021, an increase of $2,370,161. This increase was the result of an increase in marketing and advertising expenses of approximately $2.2 million and an increase of $170,943 related to labor costs (salary and consulting) to support the sale of our ColoAlert product.
General and Administrative Expenses
General and administrative expenses for the six months ended June 30, 2022 were $9,268,054 compared to $250,692 for the six months ended June 30, 2021, an increase of $9,017,362. The increased expenses were primarily the result of $4.9 million of non-cash stock option expense, , increases of $2.1 million related to labor costs (salary and consulting), and $1.6 million related to legal, banking, and accounting fees primarily related to our capital raising efforts.
Other Income (expense)
Other income (expense) for the six months ended June 30, 2022 was $22,981 compared to $7,087 for the six months ended June 30, 2021, resulting in increased other expenses (net) of $15,894.
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 equity financing. As of June 30, 2022, we had $26,006,609 of cash and cash equivalents, with $8,727,542 as of December 31, 2021.
The following table summarizes our cash flows from operating, investing and financing activities:
| Six Months Ended June 30, | ||||||||||||
| 2022 | 2021 | Change | ||||||||||
| Cash used in operating activities | $ | (6,456,904 | ) | $ | (132,530 | ) | $ | (6,324,374 | ) | |||
| Cash used in investing activities | $ | (252,446 | ) | $ | (4,580 | ) | $ | (247,866 | ) | |||
| Cash provided by financing activities | $ | 24,091,651 | $ | 217,029 | $ | 23,874,622 | ||||||
Cash Flow from Operating Activities
For the six months ended June 30, 2022, cash flows used in operating activities was $6,456,904 compared to $132,530 used during the six months ended June 30, 2021. The increase in cash flows used in operating activities of $6,324,374 was primarily the result of our operating loss for the six months ended June 30, 2022, net of non-cash stock-based compensation, and timing differences for the settlement of assets and liabilities.
Cash Flows from Investing Activities
During the six months ended June 30, 2022, we used $252,446 in investing activities compared to $4,580 used during the year ended six months ended June 30, 2021. Cash used for investing activities in both periods was for the purchase of fixed assets and the build out of new lab and office space.
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Cash Flows from Financing Activities
During the six months ended June 30, 2022, we had cash flow provided by financing activities of $24,091,651 compared to cash flow provided by financing activities of $217,029 for the six months ended June 30, 2021, an increase of $23,874,622. This increase was primarily the result of our sale of 1,725,000 ordinary shares on January 28, 2022, for net proceeds of $23,865,890.
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 selling 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.
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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).
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 this offering at the earliest; and |
| ● | $15.00, provided that such options cannot vest until the twelve-month anniversary of this offering at the earliest. |
As of June 30, 2022, all of these criteria had been met, resulting in 100% of these options being 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.
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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.
Of the 1,484,650 stock options granted prior to this offering, 393,000 were granted with simple time-based vesting. Using the Black-Scholes method, we have estimated the compensation costs related to these options to be approximately $1.3 million, which will be recognized over the vesting period in our Condensed Interim Consolidated Statements of Profit and loss and Comprehensive Loss. The remaining options for our senior management team vest, as described above, based on milestones tied to increased shareholder value as measured by increases in our stock price. The accounting for the 1,091,650 options issued to our senior management team, were measured at the time of issuance ($10,861,918). During the six months ended June 30, 2022, $2,996,852 of this amount was expensed, and during the six months ended December 31, 2022, the remaining unamortized balance of $1,817,597 will be expensed. All expenses are or will be recorded in the Company’s Consolidated Statements of Profit and loss and Comprehensive Loss.
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.
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Financial Instruments
(a) Classification
The Company classifies 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. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s 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 the Company 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 the Company has 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.
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Exhibit 99.2
INDEX TO FINANCIAL STATEMENTS
| Page | ||
| MAINZ BIOMED N.V. | ||
| Six Month Ended June 30, 2022 and 2021 | ||
| Financial Statements (Unaudited): | ||
| Condensed Interim Consolidated Statements of Financial Position | F-2 | |
| Condensed Interim Consolidated Statements of Profit and Loss and Comprehensive Loss | F-3 | |
| Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficit) | F-4 | |
| Condensed Interim Consolidated Statements of Cash Flows | F-5 | |
| Notes to the Unaudited Condensed Interim Consolidated Financial Statements | F-6 |
F-1
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
(Expressed in US Dollars).
| June 30, | December 31, | |||||||||
| Note | 2022 | 2021 | ||||||||
| ASSETS | ||||||||||
| Current Assets | ||||||||||
| Cash | $ | $ | ||||||||
| Trade and other receivables, net | 4 | |||||||||
| Inventories | ||||||||||
| Prepaid expenses | 5 | |||||||||
| Total Current Assets | ||||||||||
| Property and equipment | ||||||||||
| Right-of-use asset | 6 | |||||||||
| Other asset | ||||||||||
| Total assets | $ | $ | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current Liabilities | ||||||||||
| Accounts payable and accrued liabilities | 7 | $ | $ | |||||||
| Accrued payroll | ||||||||||
| Accounts payable - related party | 13 | |||||||||
| Convertible debt - related party | 8 | |||||||||
| Loans payable | 9 | |||||||||
| Loans payable - related party | 9 | |||||||||
| Silent partnership | 10 | |||||||||
| Silent partnership - related party | 10 | |||||||||
| Lease liabilities | 6 | |||||||||
| Total current liabilities | ||||||||||
| Silent partnerships | 10 | |||||||||
| Silent partnerships - related party | 10 | |||||||||
| Lease liabilities | 6 | |||||||||
| Total Liabilities | ||||||||||
| Shareholder’s equity | ||||||||||
| Share capital | 11 | |||||||||
| Share premium | 11 | |||||||||
| Reserve | 11 | |||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Accumulated other comprehensive income | ||||||||||
| Total shareholders’ equity | ||||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||||
Nature of operations and going concern (Note 1)
Subsequent events (Note 21)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Profit and loss and Comprehensive Loss
(Unaudited)
(Expressed in US Dollars)
| Six months ended | ||||||||||
| June 30, | ||||||||||
| Note | 2022 | 2021 | ||||||||
| Revenue | $ | $ | ||||||||
| Cost of revenue | 12 | |||||||||
| Gross profit | ||||||||||
| Operating expenses | ||||||||||
| General and administrative | 17 | |||||||||
| Sales and marketing | 17 | |||||||||
| Research and development | 17 | |||||||||
| Total operating expenses | ||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||
| Other income (expense) | ||||||||||
| Accretion expense | 8, 9, 10 | ( | ) | ( | ) | |||||
| Government grant – research and development | 14 | |||||||||
| Government grant – below market financing | ||||||||||
| Interest expense | ( | ) | ( | ) | ||||||
| Other income | ||||||||||
| Total other expense | ( | ) | ( | ) | ||||||
| Loss before income tax | ( | ) | ( | ) | ||||||
| Income taxes provision | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||||
| Foreign currency translation gain | ||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||||
| $ | ( | ) | $ | ( | ) | |||||
| Weighted average number of ordinary shares outstanding | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
(Unaudited)
(Expressed in US Dollars)
For the Six Months Ended June 30, 2022
| Accumulated Other | Total | |||||||||||||||||||||||||||||
| Number of | Share | Share | Accumulated | comprehensive | Shareholders’ | |||||||||||||||||||||||||
| Note | shares | Capital | Premium | Reserve | Deficit | Income | Equity | |||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||
| Sale of ordinary shares | 11 | |||||||||||||||||||||||||||||
| Issuance of ordinary shares for exercise of warrants | 11 | ( | ) | |||||||||||||||||||||||||||
| Share based expense | 11 | |||||||||||||||||||||||||||||
| Stock option expense | 11 | - | ||||||||||||||||||||||||||||
| Net loss | - | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||
For the Six Months Ended June 30, 2021
| Accumulated Other | Total | |||||||||||||||||||||||||
| Number of | Share | Share | Accumulated | comprehensive | Shareholders’ | |||||||||||||||||||||
| shares | Capital | Premium | Reserve | Deficit | Income (loss) | Deficit | ||||||||||||||||||||
| Balance, December 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Issuance of ordinary shares for conversion of debt | ||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
Mainz Biomed N.V.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in US Dollars)
| Six months ended | ||||||||||
| June 30, | ||||||||||
| Note | 2022 | 2021 | ||||||||
| Cash Flows From Operating Activities | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| Stock based compensation | 11 | |||||||||
| Depreciation and amortization | ||||||||||
| Bad debt expense | ||||||||||
| Accretion expense | 8, 9, 10 | |||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Trade and other receivables | ( | ) | ( | ) | ||||||
| Inventory | ( | ) | ||||||||
| Prepaid expenses and other assets | ||||||||||
| Accounts payable and accrued liabilities | ||||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||||
| Cash Flows From Investing Activities | ||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||||
| Cash Flows From Financing Activities | ||||||||||
| Sale of ordinary shares and warrants | 11 | |||||||||
| Warrant exercise proceeds | 11 | |||||||||
| Proceeds from silent partnerships | 11 | |||||||||
| Repayment of loans payable | 9 | ( | ) | |||||||
| Repayment of lease obligations | 6 | ( | ) | ( | ) | |||||
| 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 | $ | $ | ||||||||
| Issuance of common stock for conversion of debt and accrued interest | $ | $ | ||||||||
| Supplemental Cash Flow Disclosures: | ||||||||||
| Interest paid | $ | $ | ||||||||
| Tax paid | $ | $ | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
Mainz Biomed N.V.
Notes to the Condensed Interim Consolidated Financial Statements
(Unaudited)
(Expressed in US dollars)
June 30, 2022
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. 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,
Going Concern
The
Company has recurring losses, accumulated deficit totaling $
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.
F-6
2. BASIS OF PRESENTATION
Basis of Presentation and Statement of Compliance
These condensed interim financial statements, including comparatives, 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, 2021 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 interim financial statements were authorized for issuance by the Audit Committee of the Board of Directors on September 1, 2022.
New Accounting Standards
Standards, interpretations and amendments to standards and interpretations in the reporting period not yet effective and not yet applied
| ● | In February 2021, the International Accounting Standards Board issued narrow-scope amendments to IAS 1, Presentation of Financial Statements, IFRS Practice Statement 2, Making Materiality Judgements and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The amendments are effective for annual periods beginning on or after January 1, 2023, although earlier application is permitted. The amendments will require the disclosure of material accounting policy information rather than disclosing significant accounting policies and clarify how to distinguish changes in accounting policies from changes in accounting estimates. We are currently assessing the impacts of the amended standards, but do not expect that our financial disclosure will be materially affected by the application of the amendments. |
| ● | In May 2021, the International Accounting Standards Board issued targeted amendments to IAS 12, Income Taxes. The amendments are effective for annual periods beginning on or after January 1, 2023, although earlier application is permitted. With a view to reducing diversity in reporting, the amendments will clarify that companies are required to recognize deferred taxes on transactions where both assets and liabilities are recognized, such as with leases and asset retirement (decommissioning) obligations. Based upon our current facts and circumstances, we do not expect our financial performance or disclosure to be materially affected by the application of the amended standard. |
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.
F-7
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year 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.
F-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; |
| ● | That Mainz Biomed N.V. did not constitute a business at the time of the contribution agreement; and |
| ● | 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. |
4. TRADE AND OTHER RECEIVABLES
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Accounts receivable, net | ||||||||
| VAT receivable | ||||||||
| Other | ||||||||
| $ | $ | |||||||
5. PREPAID AND OTHER CURRENT ASSETS
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Other prepaid expense | ||||||||
| Security deposit | ||||||||
| $ | $ | |||||||
F-9
6. LEASES
Right-of-Use Assets
The Company’s leases certain assets under lease agreements.
| Office | Laboratory | |||||||||||||||||||
| Equipment | Equipment | Vehicles | Office lease | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| Balance at January 1, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Additions | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Additions | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Balance at June 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| Accumulated amortization | ||||||||||||||||||||
| Balance at January 1, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Amortization | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Amortization | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Balance at June 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
As of June 30, 2022, management assessed that there were no events or changes in circumstances that would require impairment testing.
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, 2022, had an average expected life of
Lease Liabilities
The Company’s lease liabilities consist
of office and laboratory equipment and office space. The present value of future lease payments were measured using an incremental borrowing
rate of
| Total | ||||
| Balance as of January 1, 2021 | $ | |||
| Additions | ||||
| Interest expenses | ||||
| Lease payments | ( | ) | ||
| Effects of currency translation | ( | ) | ||
| As of December 31, 2021 | $ | |||
| Additions | ||||
| Interest expenses | ||||
| Lease payments | ( | ) | ||
| Effects of currency translation | ( | ) | ||
| As of June 30, 2022 | $ | |||
F-10
| Lease liabilities | June
30, | December 31, 2021 | ||||||
| Current portion | $ | $ | ||||||
| Long-term portion | ||||||||
| Total lease liabilities | $ | $ | ||||||
At June 30, 2022, the Company is committed to minimum lease payments as follows:
| Maturity analysis | June 30, 2022 | |||
| 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 | $ | |||
7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Payroll liabilities | ||||||||
| Bonus accrual | ||||||||
| VAT payable | ||||||||
| $ | $ | |||||||
8. 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
In November 2017,
F-11
During the year ended December 31, 2021, the loan
amount of EUR
A continuity of the Company’s Convertible Debt – Related Party is as follows:
| 2019 and 2020 Convertible Loans | 2017 Convertible Loans | Total | ||||||||||
| Balance, January 1, 2021 | $ | $ | $ | |||||||||
| Accretion | ||||||||||||
| Conversion | ( | ) | ( | ) | ( | ) | ||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ||||||
| Balance, December 31, 2021 | $ | $ | $ | |||||||||
| Accretion | ||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ||||||
| Balance, June 30, 2022 | $ | $ | $ | |||||||||
9. LOANS PAYABLE
During the year ended December 31, 2020, the Company
entered into a loan agreement for the principal amount of EUR
Between the years of 2011 to 2013, the Company
received loans from related parties totaling EUR
In 2017, the Company obtained a line of credit
of up to EUR
During the six months ended June 30, 2022, loans payable was fully paid off.
A continuity of the Company’s loans payable is as follows:
| 0.1% Loan | Related
party | Related
party | Total | |||||||||||||
| Balance, January 1, 2021 | $ | $ | $ | $ | ||||||||||||
| Issued during the year | ||||||||||||||||
| Extinguished during the year | ( | ) | ( | ) | ||||||||||||
| Accretion | ||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ||||||||||||
| Extinguished during the year | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | ||||||||||||
F-12
10. 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
Between the years of 2013 to 2016, the Company entered into silent partnership agreements for loans totaling EUR 798,694 (approximately $915,383) (the “8.5% SPAs”). Under the 8.5% SPAs, the Company is to repay EUR 398,634 (approximately $408,496) of the loans by June 30, 2023 and EUR 400,000 (approximately $409,859) of the loans matures on December 31, 2025. The Company must pay a minimum of 8.5% interest per annum on the loans. The lenders are entitled to 1.66% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the lenders do not partake in the Company’s losses. At maturity, the lenders of the 8.5% SPAs have the option to demand an additional payment equal to 30% of the principal of the loans as a Final Remuneration. The Final Remuneration is considered to be cost of issuing the debt and as such, the initial fair value of the 8.5% SPAs was determined to be EUR 772,568 (approximately $85,440), determined using an estimated effective interest rate of 11.5%. Under the agreements, the lenders also agreed to invest in the Company and contributed EUR 676,366 (approximately $775,183) to acquire 27,752 shares of the Company between the years of 2013 and 2016. During the year ended December 31, 2020, EUR 80,000 (approximately $99,527) of the 8.5% SPAs was extinguished as the lender, who is also a customer of the Company, elected to offset the debt amount against amounts in trade receivables due to the Company. The debtor did not demand the Final Remuneration and the Company recognized a gain on the extinguishment of $8,214.
In 2010, the Company entered into a silent partnership
agreement whereby the lender agreed to lend the Company EUR
F-13
A continuity of the Company’s silent partnerships is as follows:
| 3% SPAs | 3.5% SPAs | 8.5% SPAs | 8% SPAs | Total | ||||||||||||||||
| Balance, January 1, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Issued during the year | ||||||||||||||||||||
| Discount | ( | ) | ( | ) | ||||||||||||||||
| Accretion | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Accretion | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
11. EQUITY
Ordinary shares
The Company has
During the six months ended June 30, 2022, the Company issued ordinary shares as follows:
| ● |
| ● |
| ● |
Warrants
During the year ended December 31, 2021, in conjunction
with private sales of ordinary shares, the Company issued
For the year ended December 31 2021, the estimated fair values of the warrants measured are as follows:
| December 31, | ||||
| 2021 | ||||
| Stock price at time of issuance | $ | |||
| Exercise price | $ | |||
| Expected term | ||||
| Expected average volatility | % | |||
| Expected dividend yield | ||||
| Risk-free interest rate | % | |||
F-14
A summary of activity during the six months ended June 30, 2022 is as follows:
| Warrants | Weighted-Average | Weighted-Average | ||||||||||
| Outstanding | Exercise Price | Life (years) | ||||||||||
| Balance as of December 31, 2021 | $ | |||||||||||
| Grants | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Expired | ||||||||||||
| Balance as of June 30, 2022 | $ | |||||||||||
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 year ended December 31, 2021, the Company
granted
During the six months ended June 30, 2022, the
Company granted
During the six months ended June 30, 2022, the
Company recorded share-based compensation of $
For the six months ended June 30, 2022, the estimated fair values of the stock options are as follows:
| June 30, | ||||
| 2022 | ||||
| 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, 2022 follows:
| Stock Options | Weighted-Average | Weighted-Average | ||||||||||
| Outstanding | Exercise Price | Life (years) | ||||||||||
| Balance as of December 31, 2021 | $ | |||||||||||
| Grants | ||||||||||||
| Exercised | ||||||||||||
| Expiry | ||||||||||||
| Balance as of June 30, 2022 | $ | |||||||||||
| Exercisable as of June 30, 2022 | $ | |||||||||||
F-15
12. COST OF REVENUE
For the six-month periods ended June 30, 2022 and 2021, cost of revenue consisted of test kit materials.
13. 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 and Chief Scientific Officer. The remuneration of directors and key management personnel during the six months ended June 30, 2022 and 2021 was as follows:
| Six months ended | ||||||||
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| Salaries and benefits | $ | $ | ||||||
Remuneration paid to related parties other than key personnel during the six months ended June 30, 2022 and 2021 was as follows:
| Six months ended | ||||||||
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| Salaries and benefits | $ | $ | ||||||
During the six months ended June 30, 2022 and
2021, the Company incurred interest expense of $
During the six months ended June 30, 2022 and
2021, the Company incurred accretion expense of $
As at June 30, 2022, EUR 30,000 (approximately $31,452) with a carrying value of $30,848 (2021 – $33,767) of the 2019 and 2020 Convertible Loans were owing to the Chief Scientific Officer of the Company and a major shareholder of the Company, respectively. The amounts are due on September 30, 2022.
As at June 30, 2022, EUR 350,000 (approximately $366,940) (2021 – EUR 350,000) with a carrying value of $445,174 (2021 – $498,972) of the 8.5% SPAs were owing to major shareholders of the Company. EUR 150,000 of the loan is due on June 30, 2023 and EUR 200,000 of the loan is due on December 31, 2025.
During the six months ended June 30, 2022 and 2021, we recorded expenses of $126,173 and $0, respectively, for the cost of royalties and other associated costs owed to ColoAlert AS, the company from which we exclusively license the ColoAlert product. Our Board Chairman is also a significant equity holder of ColoAlert AS. During the six months ended June 30, 2022 and 2021, we paid ColoAlert AS $27,335 and $0, respectively. On June 30, 2022 and December 31, 2021, we had liabilities recorded for unpaid costs to ColoAlert AS of $104,840 and $84,750, respectively, recorded as Accounts payable – related party.
F-16
14. GOVERNMENT GRANTS
The Company receives government grants related to its research and development activities. The amount of government grants received during the periods ended June 30, 2022 and 2021 and recognized as research grant revenue were as follows:
| Six months ended | ||||||||
| June 30, | ||||||||
| Research and Development Projects | 2022 | 2021 | ||||||
| Rapid detection of antibody-based pathogens | $ | $ | ||||||
| Multi-marker test for the early detection of pancreatic cancer | ||||||||
| $ | $ | |||||||
As of June 30, 2022 and December 31, 2021, 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 $
15. 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 more than 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. The Company has been determined that no credit loss provision is required, as all
amounts outstanding are considered collectible. During the six months ended June 30, 2022, the Company incurred $
F-17
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 at June 30, 2022, the Company
had an unrestricted cash balance of $
Historically, the Company’s primary source of funding has been the issuance of equity securities for cash, primarily through 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.
The following is an analysis of the contractual maturities of the Company’s financial liabilities as at June 30, 2022:
| Within | Between one and | More than | ||||||||||
| one year | five years | five years | ||||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | |||||||||
| Accounts payable - related party | ||||||||||||
| Convertible debt - related party | ||||||||||||
| Silent partnerships | ||||||||||||
| Lease liabilities | ||||||||||||
| $ | $ | $ | ||||||||||
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.
16. CONCENTRATIONS
Major customers are defined as customers that
each individually account for greater than
F-18
17. OPERATING EXPENSES
For the years ended June 30, 2022 and 2021, operating expenses consisted of the follows,
| General and administrative | 2022 | 2021 | ||||||
| Bad Debt | $ | $ | ||||||
| Consulting expenses | ||||||||
| Depreciation and amortization | ||||||||
| Office expenses | ||||||||
| Professional fees | ||||||||
| Salaries and benefits | ||||||||
| Employee stock option expense | ||||||||
| Travel and entertainment | ||||||||
| Royalty expenses | ||||||||
| $ | $ | |||||||
| Sales and marketing | 2022 | 2021 | ||||||
| Marketing and advertising | $ | $ | ||||||
| Consulting expenses | ||||||||
| Depreciation and amortization | ||||||||
| Office expenses | ||||||||
| Salaries and Benefits | ||||||||
| $ | $ | |||||||
| Research and development | 2022 | 2021 | ||||||
| Consulting expenses | $ | $ | ||||||
| Depreciation and amortization | ||||||||
| Lab and office expenses | ||||||||
| Salaries and benefits | ||||||||
| Materials for clinical study | ||||||||
| $ | $ | |||||||
F-19
Exhibit 99.3
Mainz Biomed Reports First Half 2022 Financial Results
| ● | 127% year-over-year increase in ColoAlert revenue | |
| ● | Mid-year cash balance of $26 Million |
BERKELEY, US – MAINZ, Germany – September 7, 2022 — 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 financial results for the first half of the fiscal year ended June 30, 2022.
Key Corporate & Product Development Highlights
| ● | Accelerated international commercial activities for ColoAlert, the Company’s highly efficacious and easy-to-use detection test for colorectal cancer (CRC) | |
| ● | Appointed Darin Leigh, former Abbott and Luminex executive, as Chief Commercial Officer | |
| ● | Established partnership with Dante Labs to market ColoAlert in Italy and the United Arab Emirates | |
| ● | Initiated and enrolled the first patient in an international clinical study (ColoFuture) evaluating the integration of novel mRNA biomarkers into ColoAlert – potentially upgrading its technical profile to achieve “gold standard” status for CRC at-home testing | |
| ● | Received supportive feedback from the U.S. Food and Drug Administration (FDA) on ColoAlert’s pre-submission package for its U.S. pivotal clinical trial set to commence in Q4 2022 | |
| ● | Achieved multiple preclinical milestones supporting the continued development of PancAlert, a potential first-in-class screening test for pancreatic cancer | |
| ● | Executed a $25.8 million (gross) public follow-on offering | |
| ● | Expanded Strategic Advisory Board of global leaders in molecular diagnostic development and commercialization |
“At the outset of 2022, we established ambitious commercial and product development objectives for the year, mostly around our flagship product ColoAlert. I’m pleased to report that we achieved all of our corporate growth goals for the first half period,” commented Guido Baechler, Chief Executive Officer of Mainz Biomed. “The Company is financially well positioned to maintain momentum as ColoAlert continues to gain impressive commercial traction across Europe and select international territories, and as we ramp up to launch its U.S. pivotal clinical trial by the end of the year.”
Commercial Update: ColoAlert continues to grow market presence via a unique business model
Throughout the first half of 2022, Mainz executed its differentiated commercial plan of partnering with third-party laboratories for test kit processing versus the traditional methodology of operating a single facility. Under the standard terms of all partnerships, Mainz is providing ColoAlert to the respective labs, including co-branding with key accounts, whereby each facility purchases Mainz’s customized polymerase chain reaction (PCR) assay kits on an on-demand basis and provides their respective network of physicians and patients with a comprehensive solution for advanced CRC detection.
The Company hired former Abbott and Luminex executive Darin Leigh as its Chief Commercial Officer (April) to drive growth. Mr. Leigh brings over 30 years of In Vitro Diagnostic (IVD) and life science experience to Mainz and is currently responsible for driving ColoAlert’s market expansion in Europe and international territories.
The Company is pleased to report key commercial highlights during the first half of 2022, including announcing high-profile partnerships with leading laboratories such as Labor MVZ Dr. Stein + Kollegen, commonly referred to as “Laboratory Mönchengladbach” (February), covering the North Rhine-Westphalia region (NRW) of Germany, and Dante Labs (May) for Italy and the United Arab Emirates (UAE). Laboratory Mönchengladbach is one of the largest diagnostics laboratories in Germany, servicing over 2,500 physicians, processing over five million samples annually and screening approximately 1,000 patients per week specifically for CRC. Dante Labs is a global leader in genome sequencing with a product development and commercial franchise focused on providing preventive healthcare solutions to consumers and healthcare professionals. Inherent to Dante Lab’s business model is managing state-of-the-art genomic sequencing laboratories in multiple international regions and operating a robust e-commerce platform. With the addition of Laboratory Mönchengladbach and Dante Labs, Mainz now has five core partnerships, including GANZIMMUN Diagnostics AG, one of Europe’s leading laboratories for preventive and complementary medicine which processes approximately 5,500 laboratory orders daily.
ColoAlert R&D Update: ColoFuture study evaluating acquired mRNA biomarkers
In June 2022, Mainz announced the first patient was enrolled in ColoFuture, an international multi-center clinical study assessing the potential to integrate a portfolio of novel gene expression (mRNA) biomarkers into ColoAlert. The mRNA biomarkers were acquired from the Université de Sherbrooke in January 2022 and are the result of the institution’s pioneering work in the field, where researchers tested multiple novel transcriptional biomarkers using colorectal cancer and precancerous lesion samples. The results from these studies demonstrated that the mRNA targets chosen by Mainz provided a market-leading combination of sensitivity and specificity of detection (Herring et al. 2021). The ColoFuture study is evaluating the effectiveness of these biomarkers to enhance ColoAlert’s technical profile to extend its capability to identify advanced adenomas (AA), a type of pre-cancerous polyp often attributed to CRC, while increasing ColoAlert’s rates of diagnostic sensitivity and specificity.
The ColoFuture study is enrolling over 600 patients in the age range of 40-85, and the Company is targeting reporting study results in early 2023. If successful, ColoAlert will be positioned as the most robust and accurate at-home diagnostic screening test 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. Additionally, data results from ColoFuture will potentially be incorporated into ColoAlert’s pivotal U.S. clinical study.
ColoAlert’s U.S. Regulatory Approval Update: Pre-submission for pivotal trial design receives feedback from the FDA, and the medical reimbursement process launched with CMS
In March 2022, Mainz announced that it received supportive feedback from the U.S. Food & Drug Administration on its pre-submission package for ColoAlert. The Company will continue working with its clinical team to finalize the study’s protocols and prepare for the multi-center study, which is on track to commence in late 2022. As part of the Company’s activities to prepare for the initiation of the pivotal trial, Mainz also announced the formal commencement of its medical reimbursement process for ColoAlert by scheduling an initial meeting with the Centers for Medicare and Medicaid Services (CMS). CMS is a federal agency in the U.S. Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children’s Health Insurance Program (CHIP), and health insurance portability standards.
2
PancAlert R&D Update: Novel screening test for pancreatic cancer achieved multiple preclinical milestones
In May, Mainz announced that PancAlert met multiple preclinical milestones that support the continued development of this potential first-in-class diagnostic for this deadly cancer indication. Multiple predefined milestones for the PancAlert project were accomplished, including achievement of specificity target, collection of a set of characterized clinical samples, selection of potential biomarker candidates, and the development of a prototype biomarker test. The Company is continuing PancAlert’s R&D to determine if a clinical trial is warranted.
PancAlert’s technical profile may include functioning as a stool-based test, mirroring the Company’s flagship product ColoAlert. Given the growing understanding of the role of the microbiome in pancreatic cancer, Mainz will evaluate real-time Polymerase Chain Reaction (“PCR”)-based multiplex detection of molecular-genetic biomarkers and other testing methods in stool samples and will also evaluate other collection methodologies including saliva, urine and blood.
The PancAlert project commenced in 2020 with a grant from the German Federal Ministry of Education and Research to develop a non-invasive early detection test for pancreatic cancer, a malignant neoplasm of the pancreas with one of the highest mortality rates of all major cancers. Each year, about 466,000 lives are taken globally, and it’s the seventh leading cause of cancer-related death worldwide.1 It has one of the lowest cancer survival rates, with typically late detection and poor outcomes with standard-of-care treatment(s). The 5-year overall survival rate is approximately 11% in the U.S.2 and 9% globally.3 However, if diagnosis occurs in the early stages of the disease, the survival rate is significantly higher, hence the rationale behind launching the PancAlert initiative.
Corporate Update: Successful follow-on offering, key appointments to management team & Strategic Advisory Board of global leaders in molecular diagnostic development and commercialization
In January 2022, the Company announced a $25.8 million public follow-on offering consisting of 1,725,000 of ordinary shares priced at $15.00 per share.
Throughout the first half of 2022, the Company continued to bolster its leadership team highlighted by the appointments of former Abbott Diagnostics executive Steve Quinn as Vice President of Business Development (January) and Jane Edwards (June), as Vice President of Clinical Affairs. Ms. Edwards, who brings over 20 years of senior experience developing clinical trial strategies in diagnostics and medical devices, will lead all of the Company’s clinical trials in the U.S. and Europe including ColoAlert’s forthcoming U.S. pivotal study. An integral part of Mainz’s corporate operational methodology is access to a Strategic Advisory Board (SAB). To this end, Mainz appointed two high profile additions to the SAB in the first quarter of 2022: In January, Dr. Michele Pedrocchi joined, followed by the February appointment of Dr. Rainer Metzger. Dr. Pedrocchi is the former Head of Roche Diagnostics Business Development and brings to the SAB over 25 years of international experience at Roche spanning in vitro diagnostics, digital health, and personalized medicine. Dr. Metzger is a former Danaher, Roche and QIAGE executive with over 25 years of experience within the pharmaceutical and diagnostic industries.
References
| 1. | Sung H, Ferlay J, Siegel RL, Laversanne M, Soerjomataram I, Jemal A, Bray F. Global Cancer Statistics 2020: GLOBOCAN Estimates of Incidence and Mortality Worldwide for 36 Cancers in 185 Countries. CA Cancer J Clin. 2021 May;71(3):209-249. doi: 10.3322/caac.21660. Epub 2021 Feb 4. PMID: 33538338. The online GLOBOCAN 2020 database is accessible at http://gco.iarc.fr/, as part of IARC’s Global Cancer Observatory. | |
| 2. | National Cancer Institute, Surveillance, Epidemiology and End Results Program (SEER). Cancer Stat Facts: Pancreatic Cancer. July 2021. https://seer.cancer.gov/statfacts/html/pancreas.html | |
| 3. | Rawla P, Sunkara T, Gaduputi V. Epidemiology of Pancreatic Cancer: Global Trends, Etiology and Risk Factors. World J Oncol. 2019;10(1):10-27. doi:10.14740/wjon1166 |
3
Financial Results Overview
Mainz Biomed N.V.
Condensed Consolidated Statements of Financial Position
June 30, 2022 and December 31, 2021
(unaudited)
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 26,006,609 | $ | 8,727,542 | ||||
| Trade and other receivables, net | 332,918 | 111,842 | ||||||
| Other assets | 458,784 | 769,825 | ||||||
| TOTAL CURRENT ASSETS | 26,798,311 | 9,609,209 | ||||||
| Fixed and other assets | 817,041 | 431,586 | ||||||
| TOTAL ASSETS | $ | 27,615,352 | $ | 10,040,795 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other accrued liabilities | $ | 1,205,788 | $ | 784,786 | ||||
| Current maturities of long-term debt | 1,108,658 | 278,183 | ||||||
| Other current liabilities | 159,116 | 288,786 | ||||||
| TOTAL CURRENT LIABILITIES | 2,473,562 | 1,351,755 | ||||||
| Long term debt | 894,832 | 1,940,119 | ||||||
| Other liabilities | 475,148 | 387,766 | ||||||
| TOTAL LIABILITIES | 3,843,542 | 3,679,640 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) | 23,771,810 | 6,361,155 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ | 27,615,352 | $ | 10,040,795 | ||||
4
Mainz Biomed N.V.
Condensed Consolidated Statements of Profit and Loss and Comprehensive Loss
For the Six Months Ended June 30, 2022 and 2021
(unaudited)
| Six months ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| REVENUE | ||||||||
| ColoAlert revenue | $ | 238,255 | $ | 104,851 | ||||
| Other revenue | 1,550 | 312,460 | ||||||
| TOTAL REVENUE | 239,805 | 417,311 | ||||||
| Cost of Revenue | 119,005 | 64,772 | ||||||
| GROSS PROFIT | 120,800 | 352,539 | ||||||
| OPERATING EXPENSES | ||||||||
| Research and Development | 911,716 | 206,146 | ||||||
| Sales and Marketing | 2,520,496 | 150,335 | ||||||
| General and Administration | 9,268,054 | 250,692 | ||||||
| TOTAL OPERATING EXPENSES | 12,700,266 | 607,173 | ||||||
| OPERATING LOSS | (12,579,466 | ) | (254,634 | ) | ||||
| Other Expenses | 22,981 | 7,087 | ||||||
| NET LOSS | $ | (12,602,447 | ) | $ | (261,721 | ) | ||
| TOTAL COMPREHENSIVE LOSS | $ | (12,519,804 | ) | $ | (178,758 | ) | ||
| BASIC AND DILUTE LOSS PER COMMON SHARE | $ | (0.91 | ) | $ | (0.05 | ) | ||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING | 13,821,914 | 5,607,243 | ||||||
5
About ColoAlert
ColoAlert detects colorectal cancer (CRC) via a simple-to-administer test with a sensitivity and specificity nearly as high as the invasive colonoscopy*. The test utilizes proprietary methods to analyze cell DNA for specific tumor markers combined with the fecal immunochemical test (FIT) and is designed to detect tumor DNA and CRC cases in their earliest stages. The product is CE-IVDR marked (complying with EU safety, health and environmental requirements). The product is commercially available in a selection of countries in the European Union and in the United Arab Emirates. Mainz Biomed currently distributes ColoAlert through a number of clinical affiliates. Once approved in the U.S., the Company’s commercial strategy is to establish scalable distribution through a collaborative partner program with regional and national laboratory service providers across the country.
| * | Dollinger MM et al. (2018) |
About Colorectal Cancer
Colorectal cancer (CRC) is the second most lethal cancer in the U.S. and Europe, but also the most preventable with early detection providing survival rates above 90%. Annual testing costs per patient are minimal, especially when compared to late-stage treatments of CRC which cost patients an average of $38,469 per year. The American Cancer Society estimated that in 2021 there were approximately 149,500 new cases of colon and rectal cancer in the U.S. with 52,980 resulting in death. Recent FDA decisions suggest that screening with stool DNA tests such as ColoAlert in the US should be conducted once every three years starting at age 45. Currently there are 112 million Americans aged 50+, a total that is expected to increase to 157 million within 10 years. Appropriately testing these US-based 50+ populations every three years as prescribed equates to a US market opportunity of approximately $3.7 Billion per year.
About Pancreatic Cancer
Each year, about 466,000 lives are taken globally, and it’s the seventh leading cause of cancer-related death worldwide.1 It has one of the lowest survival rates of any cancer, with typically late detection and poor outcomes with standard of care treatment(s). The 5-year overall survival rate is approximately 11% in the U.S.2 and 9% globally.3 However, if diagnosis occurs in the early stages of the disease, the survival rate is significantly higher, hence the rationale behind launching the PancAlert initiative
6
About Mainz Biomed N.V.
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. ColoAlert is currently marketed across Europe and in the United Arab Emirates with the intention of beginning its pivotal FDA clinical study in 2022 for U.S. regulatory approval. Mainz Biomed’s product candidate portfolio includes PancAlert, an early-stage pancreatic cancer screening test based on Real-Time Polymerase Chain Reaction-based (PCR) multiplex detection of molecular-genetic biomarkers in stool samples.
For more information, please visit www.mainzbiomed.com
For media enquiries, please contact press@mainzbiomed.com
For investor enquiries, please contact ir@mainzbiomed.com
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 registration statement on Form F-1 filed on January 21, 2022. 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
Document And Entity Information |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Document Information Line Items | |
| Entity Registrant Name | MAINZ BIOMED N.V. |
| Document Type | 6-K |
| Current Fiscal Year End Date | --12-31 |
| Amendment Flag | false |
| Entity Central Index Key | 0001874252 |
| Document Period End Date | Jun. 30, 2022 |
| Document Fiscal Year Focus | 2022 |
| Document Fiscal Period Focus | Q2 |
| Entity File Number | 001-41010 |
Condensed Interim Consolidated Statements of Profit and Loss and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares |
6 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Profit or loss [abstract] | ||
| Basic and dilutive loss per ordinary share | $ (0.91) | $ (0.05) |
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficit) (Unaudited) - USD ($) |
Share Capital |
Share Premium |
Reserve |
Accumulated Deficit |
Accumulated Other comprehensive Income (loss) |
Total |
|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2020 | $ 64,265 | $ 41,846 | $ 2,309,684 | $ (4,954,860) | $ (202,490) | $ (2,741,555) |
| Balance (in Shares) at Dec. 31, 2020 | 5,607,243 | |||||
| Issuance of ordinary shares for conversion of debt | $ 4,784 | 3,115 | 500,338 | 508,237 | ||
| Issuance of ordinary shares for conversion of debt (in Shares) | 392,757 | |||||
| Net loss | (261,721) | (261,721) | ||||
| Foreign currency translation | 82,963 | 82,963 | ||||
| Balance at Jun. 30, 2021 | $ 69,049 | 44,961 | 2,810,022 | (5,216,581) | (119,527) | (2,412,076) |
| Balance (in Shares) at Jun. 30, 2021 | 6,000,000 | |||||
| Balance at Dec. 31, 2021 | $ 141,075 | 13,126,493 | 9,736,066 | (16,644,958) | 2,479 | 6,361,155 |
| Balance (in Shares) at Dec. 31, 2021 | 12,010,001 | |||||
| Sale of ordinary shares | $ 15,525 | 23,850,364 | 23,865,889 | |||
| Sale of ordinary shares (in Shares) | 1,725,000 | |||||
| Issuance of ordinary shares for exercise of warrants | $ 6,210 | 492,704 | (116,414) | 382,500 | ||
| Issuance of ordinary shares for exercise of warrants (in Shares) | 689,973 | |||||
| Share based expense | $ 522 | 787,098 | 787,620 | |||
| Share based expense (in Shares) | 58,000 | |||||
| Stock option expense | 4,894,450 | 4,894,450 | ||||
| Net loss | (12,602,447) | (12,602,447) | ||||
| Foreign currency translation | 82,643 | 82,643 | ||||
| Balance at Jun. 30, 2022 | $ 163,332 | $ 38,256,659 | $ 14,514,102 | $ (29,247,405) | $ 85,122 | $ 23,771,810 |
| Balance (in Shares) at Jun. 30, 2022 | 14,482,974 |
Nature of Operations and Going Concern |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Nature of Operations and Going Concern [Abstract] | |
| NATURE OF OPERATIONS AND GOING CONCERN | 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. 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, 100% of the shares of PharmGenomics were acquired in exchange for 6,000,000 shares of the Company. Upon the closing of the Contribution Agreement, PharmGenomics became a wholly owned subsidiary of the Company and the former shareholders of PharmGenomics held approximately 62% of the outstanding shares of the Company prior to the Company’s initial public offering. On September 20, 2021 PharmGenomics and the Company closed the Contribution Agreement. In November 2021, the Company completed its initial public offering of its ordinary shares on the Nasdaq Capital Market, selling 2,300,000 shares at $5.00 per share. Upon its IPO, Mainz Biomed B.V. became Mainz Biomed N.V.
Going Concern
The Company has recurring losses, accumulated deficit totaling $29,247,405 and negative cash flows used in operating activities of $6,456,904 as of and for the six months ended June 30, 2022. The Company has sufficient cash on hand, including from the ordinary share offering completed in January 2022, to cover its current liabilities and the estimated cash to be used in operations based for the next twelve months. As a result of the actions noted above, management believes that it will have sufficient working capital to meet its planned operating cash flow requirements.
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. |
Basis of Presentation |
6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||
| Disclosure of Basis of Presentation [Abstract] | |||||||
| BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION
Basis of Presentation and Statement of Compliance
These condensed interim financial statements, including comparatives, 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, 2021 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 interim financial statements were authorized for issuance by the Audit Committee of the Board of Directors on September 1, 2022.
New Accounting Standards
Standards, interpretations and amendments to standards and interpretations in the reporting period not yet effective and not yet applied
|
Accounting Policies, Estimates and Significant Management Judgments |
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Jun. 30, 2022 | |||||||||||||||||||
| Significant accounting policies [Abstract] | |||||||||||||||||||
| ACCOUNTING POLICIES, ESTIMATES AND SIGNIFICANT MANAGEMENT JUDGMENTS | 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.
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year 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.
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:
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Trade and Other Receivables |
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| Trade and other receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TRADE AND OTHER RECEIVABLES | 4. TRADE AND OTHER RECEIVABLES
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Prepaid and Other Current Assets |
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| Disclosure of Prepaid and Other Current Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PREPAID AND OTHER CURRENT ASSETS | 5. PREPAID AND OTHER CURRENT ASSETS
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Leases |
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| Disclosure Of Leases Text Block Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES | 6. LEASES
Right-of-Use Assets
The Company’s leases certain assets under lease agreements.
As of June 30, 2022, management assessed that there were no events or changes in circumstances that would require impairment testing.
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, 2022, had an average expected life of 5 years.
Lease Liabilities
The Company’s lease liabilities consist of office and laboratory equipment and office space. The present value of future lease payments were measured using an incremental borrowing rate of 10% per annum as of January 1, 2021 and January 1, 2022.
At June 30, 2022, the Company is committed to minimum lease payments as follows:
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Accounts Payable and Accrued Expenses |
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| Accounts Payable And Accrued Expenses Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
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Convertible Debt – Related Party |
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| Disclosure Of Convertible Debt Explanatory Abstract | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE DEBT – RELATED PARTY | 8. CONVERTIBLE DEBT – RELATED PARTY
During the years ended December 31, 2019 and 2020, the Company entered into loan agreements with related parties totaling EUR 417,133 (approximately $467,154) (the “2019 and 2020 Convertible Loans”). The 2019 and 2020 Convertible Loans bear interest at 3.5% and have a maturity date of September 30, 2022. While the 2019 and 2020 Convertible Loans are outstanding, the lenders are entitled to 0.5% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the lenders do not partake in the Company’s losses. As the Company incurred losses during 2021, 2020 and 2019, no expense has been recorded in any period for profit sharing. At maturity, the 2019 and 2020 Convertible Loans are convertible into ordinary shares of the Company at EUR 1 per share.
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 13,064 on issuance of the 2019 and 2020 Convertible Loans.
In November 2017, the Company entered into loan agreements with two shareholders of the Company for loans totaling EUR 80,278 (approximately $92,007) (the “2017 Convertible Loans”). The loans are convertible at the option of the lender to shares totaling 4.25% of the Company’s common shares outstanding at the time of conversion. The loans are non-interest bearing, are unsecured and are due on demand. During the year ended December 31, 2019, principal in the amount of EUR 5,000 ($5,597) was exchanged for the 2019 and 2020 Convertible Loans and EUR 5,000 ($5,597) was extinguished as the lender elected to offset the debt amount against amounts in trade receivables due to the Company.
During the year ended December 31, 2021, the loan amount of EUR 417,272 ($508,237) were converted into 392,757 shares of share capital and the Company received cash of EUR 6,485 ($7,673) to issue shares.
A continuity of the Company’s Convertible Debt – Related Party is as follows:
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Loans Payable |
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| Loans Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LOANS PAYABLE | 9. LOANS PAYABLE
During the year ended December 31, 2020, the Company entered into a loan agreement for the principal amount of EUR 20,000 (approximately $22,828) (the “0.1% Loan). The 0.1% Loan bears interest at 0.1% per month and is due on demand and is secured against the Company’s trade receivables.
Between the years of 2011 to 2013, the Company received loans from related parties totaling EUR 35,000 (approximately $40,144) (the “Related Party 6% Loans”). The Loans have a stated interest rate of at 6.0%. EUR 10,000 (approximately $11,461) of the loans matured on July 31, 2020 and EUR 25,000 (approximately $28,653) of the loan matured on December 31, 2021. As the Related Party 6% Loans were received at below market interest rates, the initial fair value of the 3% Loan was determined to be EUR 21,936 (approximately $25,140), determined using an estimated effective interest rate of 11.5%.
In 2017, the Company obtained a line of credit of up to EUR 200,000 (approximately $229,224) (the “LOC”). The LOC accrues interest of 4% on amounts drawn, and a 0.5% fee if no amounts are drawn. The LOC was fully repaid in early 2022.
During the six months ended June 30, 2022, loans payable was fully paid off.
A continuity of the Company’s loans payable is as follows:
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Silent Partnerships |
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| Silent Partnerships Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SILENT PARTNERSHIPS | 10. SILENT PARTNERSHIPS
During the year ended December 31, 2020, the Company entered into silent partnership agreements whereby the lender agreed to lend a total of EUR 299,400 (approximately $341,740) (the “3% SPAs”). The Company is to repay the amount by December 31, 2025. The Company must pay a minimum of 3% interest per annum on the loans. The lender is entitled to 3% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the lender does not partake in the Company’s losses. Upon the amounts coming due, the lender of the 3% SPAs have the option to demand an additional payment equal to 15% of the contribution as a final remuneration (the “Final Renumeration”). The Final Remuneration is considered to be the cost of issuing debt. The 3% SPAs were received at below market interest rates as part of a government program for COVID-19 relief. The initial fair value of the 3% SPAs was determined to be EUR 218,120 (approximately $248,966), which was determined using an estimated effective interest rate of 11.5%. The difference between the face value and the fair value of the 3% SPAs of EUR 81,280 ($92,774) has been recognized as government grant income during the period. During the year ended December 31, 2021 the Company received the remaining EUR 200,000 ($236,640). The initial fair value of the 3.0% SPAs received was determined to be EUR 230,000 (approximately $272,136), determined using an estimated effective interest rate of 11.5%. The initial fair value of the 3.0% SPAs received in 2021 was determined to be EUR 156,549 (approximately $185,229), which was determined using an estimated effective interest rate of 11.5%. The difference between the face value and the fair value of the 3.0% SPAs received in 2021 of EUR 43,451 (approximately $51,410) has been recognized as government grant income during the period.
During the year ended December 31, 2020, the Company entered into silent partnership agreements whereby the lender agreed to lend a total of EUR 50,000 (approximately $57,071) (the “3.5% SPAs”). The Company is to repay the amount by June 30, 2025. The Company must pay a minimum of 3.5% interest per annum on the loans. The lender is entitled to 0.5% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the ender does not partake in the Company’s losses. The 3.5% SPAs are convertible to common shares of the Company at EUR 1 per share in the event that the Company is involved in any of the following transactions: capital increases, a share or asset deal or a public offering. Pursuant to the silent partnership agreement, the Company notified the holder, at which point the holder declined the opportunity to convert their loan into common shares. The 3.5% SPAs 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 3.5% SPAs 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.
Between the years of 2013 to 2016, the Company entered into silent partnership agreements for loans totaling EUR 798,694 (approximately $915,383) (the “8.5% SPAs”). Under the 8.5% SPAs, the Company is to repay EUR 398,634 (approximately $408,496) of the loans by June 30, 2023 and EUR 400,000 (approximately $409,859) of the loans matures on December 31, 2025. The Company must pay a minimum of 8.5% interest per annum on the loans. The lenders are entitled to 1.66% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the lenders do not partake in the Company’s losses. At maturity, the lenders of the 8.5% SPAs have the option to demand an additional payment equal to 30% of the principal of the loans as a Final Remuneration. The Final Remuneration is considered to be cost of issuing the debt and as such, the initial fair value of the 8.5% SPAs was determined to be EUR 772,568 (approximately $85,440), determined using an estimated effective interest rate of 11.5%. Under the agreements, the lenders also agreed to invest in the Company and contributed EUR 676,366 (approximately $775,183) to acquire 27,752 shares of the Company between the years of 2013 and 2016. During the year ended December 31, 2020, EUR 80,000 (approximately $99,527) of the 8.5% SPAs was extinguished as the lender, who is also a customer of the Company, elected to offset the debt amount against amounts in trade receivables due to the Company. The debtor did not demand the Final Remuneration and the Company recognized a gain on the extinguishment of $8,214.
In 2010, the Company entered into a silent partnership agreement whereby the lender agreed to lend the Company EUR 300,000 (approximately $343,830) (the “8% SPA”). The Company must repay the loan by January 31, 2023. The Company must pay a minimum of 8% interest per annum on the loan. The lender is entitled to 1.95% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the lender does not partake in the Company’s losses. At maturity, the lender of the 8% SPA has the option to demand an additional payment of up to 30% of the principal of the loan as a Final Remuneration. The Final Remuneration is considered to be cost of issuing the debt and as such, the initial fair value of the 8% SPA was determined to be EUR 289,900 (approximately $332,254), determined using an estimated effective interest rate of 11.5%.
A continuity of the Company’s silent partnerships is as follows:
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Equity |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EQUITY | 11. EQUITY
Ordinary shares
The Company has 45 million ordinary shares authorized. Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. The par value of share capital is EUR 0.01 per share.
During the six months ended June 30, 2022, the Company issued ordinary shares as follows:
Warrants
During the year ended December 31, 2021, in conjunction with private sales of ordinary shares, the Company issued 3,755,000 warrants and issued 140,000 underwriter warrants with its IPO, cumulatively valued at $754,286, which was recorded to Reserve in the Statement of Financial Position. The warrants were valued using the Black-Scholes pricing model. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement.
For the year ended December 31 2021, the estimated fair values of the warrants measured are as follows:
A summary of activity during the six months ended June 30, 2022 is as follows:
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 2,800,000 ordinary shares.
During the year ended December 31, 2021, the Company granted 1,504,650 stock options valued at $13,968,627. Stock options with time-based vesting were valued using the Black-Scholes pricing model, while stock options with market-based vesting were valued using the Monte Carlo simulation. During the year ended December 31, 2021, the Company recorded share-based compensation of $6,430,158 and the unamortized expense of $7,538,469 as of December 31, 2021. Forfeitures are estimated at the time of grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
During the six months ended June 30, 2022, the Company granted 487,000 stock options valued at $4,336,798. Stock options with time-based vesting were valued using the Black-Scholes pricing model.
During the six months ended June 30, 2022, the Company recorded share-based compensation of $4,894,450 and had unamortized expense of $6,952,548 as of June 30, 2022. Forfeitures are estimated at the time of grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
For the six months ended June 30, 2022, the estimated fair values of the stock options are as follows:
A summary of activity during the six months ended June 30, 2022 follows:
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Cost of Revenue |
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Jun. 30, 2022 | |
| Cost of Revenue [Abstract] | |
| COST OF REVENUE | 12. COST OF REVENUE
For the six-month periods ended June 30, 2022 and 2021, cost of revenue consisted of test kit materials. |
Related Party Transactions |
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| RELATED PARTY TRANSACTIONS | 13. 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 and Chief Scientific Officer. The remuneration of directors and key management personnel during the six months ended June 30, 2022 and 2021 was as follows:
Remuneration paid to related parties other than key personnel during the six months ended June 30, 2022 and 2021 was as follows:
During the six months ended June 30, 2022 and 2021, the Company incurred interest expense of $16,838 and $24,983 on balances owing to related parties, respectively.
During the six months ended June 30, 2022 and 2021, the Company incurred accretion expense of $7,885 and $9,908 on balances owing to related parties, respectively.
As at June 30, 2022, EUR 30,000 (approximately $31,452) with a carrying value of $30,848 (2021 – $33,767) of the 2019 and 2020 Convertible Loans were owing to the Chief Scientific Officer of the Company and a major shareholder of the Company, respectively. The amounts are due on September 30, 2022.
As at June 30, 2022, EUR 350,000 (approximately $366,940) (2021 – EUR 350,000) with a carrying value of $445,174 (2021 – $498,972) of the 8.5% SPAs were owing to major shareholders of the Company. EUR 150,000 of the loan is due on June 30, 2023 and EUR 200,000 of the loan is due on December 31, 2025.
During the six months ended June 30, 2022 and 2021, we recorded expenses of $126,173 and $0, respectively, for the cost of royalties and other associated costs owed to ColoAlert AS, the company from which we exclusively license the ColoAlert product. Our Board Chairman is also a significant equity holder of ColoAlert AS. During the six months ended June 30, 2022 and 2021, we paid ColoAlert AS $27,335 and $0, respectively. On June 30, 2022 and December 31, 2021, we had liabilities recorded for unpaid costs to ColoAlert AS of $104,840 and $84,750, respectively, recorded as Accounts payable – related party. |
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Government Grants |
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| GOVERNMENT GRANTS | 14. GOVERNMENT GRANTS
The Company receives government grants related to its research and development activities. The amount of government grants received during the periods ended June 30, 2022 and 2021 and recognized as research grant revenue were as follows:
As of June 30, 2022 and December 31, 2021, 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 $168,161 and $254,796, respectively. |
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Financial Instrument Risk Management |
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| FINANCIAL INSTRUMENT RISK MANAGEMENT | 15. 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:
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 more than the federally insured limit of $250,000 per institution and German €100,000 limit per institution. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.
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. The Company has been determined that no credit loss provision is required, as all amounts outstanding are considered collectible. During the six months ended June 30, 2022, the Company incurred $470 in bad debt expense (2021 - $0). The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers.
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 at June 30, 2022, the Company had an unrestricted cash balance of $26,006,609 to settle current liabilities of $2,473,562.
Historically, the Company’s primary source of funding has been the issuance of equity securities for cash, primarily through 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.
The following is an analysis of the contractual maturities of the Company’s financial liabilities as at June 30, 2022:
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. As the Company operates in Germany it holds a portion of its cash balances in Euro to approximate between three to twelve months estimated operating needs. The remainder of the Company’s cash is held in U.S. Dollars, the Company’s reporting currency, which we also expect to be the currency of the Company’s largest cash outlays over the next twenty-four months.
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. |
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Concentrations |
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| Concentrations Disclosure Abstract | |
| CONCENTRATIONS | 16. CONCENTRATIONS
Major customers are defined as customers that each individually account for greater than 10% of the Company’s annual revenues. For the six months ended June 30, 2022 and 2021, the Company had revenue from four and two customers that accounted for approximately 81% and 51% of revenue, respectively. |
Operating Expenses |
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| Disclosure Of Operating Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES | 17. OPERATING EXPENSES
For the years ended June 30, 2022 and 2021, operating expenses consisted of the follows,
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| Accounting Policies [Abstract] | |||||||||||||||||||
| Inventories | 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.
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| Reclassifications | Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year presentation.
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| Critical Accounting Estimates and Significant Management Judgments | 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.
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:
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Trade and Other Receivables (Tables) |
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| Schedule of trade and other receivables |
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| Schedule of prepaid and other current assets |
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Leases (Tables) |
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| Schedule of leases certain assets under lease agreements |
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| Schedule of future lease payments |
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| Schedule of lease liabilities |
|
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| Schedule of committed to minimum lease payments |
|
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Accounts Payable and Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts Payable And Accrued Expenses Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of accounts payable and accrued expenses |
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Convertible Debt – Related Party (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure Of Convertible Debt Explanatory Abstract | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of convertible debt |
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Loans Payable (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of loans payable |
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Silent Partnerships (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silent Partnerships Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of continuity of the company’s silent partnerships |
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Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of the estimated fair values of the warrants measured |
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| Schedule of activity during the year ended |
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Related Party Transactions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of remuneration of directors and key management personnel |
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| Schedule of remuneration paid to related parties |
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Government Grants (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Government Grants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of research and development |
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Financial Instrument Risk Management (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instrument Risk Management [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of contractual maturities financial liabilities |
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Operating Expenses (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of operating expenses |
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Nature of Operations and Going Concern (Details) - USD ($) |
1 Months Ended | 6 Months Ended | |
|---|---|---|---|
Aug. 03, 2021 |
Nov. 30, 2021 |
Jun. 30, 2022 |
|
| Nature of Operations and Going Concern [Abstract] | |||
| Agreement percentage | 100.00% | ||
| Share exchange | 6,000,000 | ||
| Outstanding shares percentage | 62.00% | ||
| Shares sold | 2,300,000 | ||
| Shares per share | $ 5 | ||
| Accumulated deficit total | $ 29,247,405 | ||
| Operating activities | $ 6,456,904 |
Trade and Other Receivables (Details) - Schedule of trade and other receivables - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
| Schedule Of Trade And Other Receivables Abstract | ||
| Accounts receivable | $ 59,768 | $ 17,995 |
| Less: allowance for doubtful accounts | (734) | (796) |
| Accounts receivable, net | 59,034 | 17,199 |
| VAT receivable | 271,694 | 94,085 |
| Other | 2,190 | 558 |
| Total | $ 332,918 | $ 111,842 |
Prepaid and Other Current Assets (Details) - Schedule of prepaid and other current assets - USD ($) |
Jun. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Schedule Of Prepaid And Other Current Assets Abstract | ||
| Prepaid insurance | $ 361,185 | $ 743,750 |
| Other prepaid expense | 31,665 | 12,590 |
| Security deposit | 29,240 | 13,485 |
| Total prepaid and other current assets | $ 422,090 | $ 769,825 |
Leases (Details) |
6 Months Ended | ||
|---|---|---|---|
Jan. 01, 2021 |
Jan. 01, 2020 |
Jun. 30, 2022 |
|
| Disclosure Of Leases Text Block Abstract | |||
| Average expected life | 5 years | ||
| Present value of future lease payments percentage | 10.00% | 10.00% |
Leases (Details) - Schedule of future lease payments - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
| Schedule Of Future Lease Payments Abstract | ||
| Balance at beginning | $ 442,844 | $ 495,051 |
| Additions | 235,221 | 32,955 |
| Interest expenses | 25,338 | 47,102 |
| Lease payments | (71,029) | (97,429) |
| Effects of currency translation | (42,557) | (34,835) |
| Balance at ending | $ 589,817 | $ 442,844 |
Leases (Details) - Schedule of lease liabilities - USD ($) |
Jun. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Schedule Of Lease Liabilities Abstract | ||
| Current portion | $ 114,669 | $ 55,076 |
| Long-term portion | 475,148 | 387,766 |
| Total lease liabilities | $ 589,817 | $ 442,842 |
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) |
Jun. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Schedule Of Accounts Payable And Accrued Expenses Abstract | ||
| Accounts payable | $ 503,181 | $ 747,768 |
| Accrued liabilities | 51,633 | 26,989 |
| Payroll liabilities | 50,974 | 6,812 |
| Bonus accrual | 600,000 | |
| VAT payable | 3,217 | |
| Total | $ 1,205,788 | $ 784,786 |
Convertible Debt – Related Party (Details) |
6 Months Ended | 12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
|
Jun. 30, 2022
€ / shares
|
Dec. 31, 2021
USD ($)
shares
|
Dec. 31, 2021
EUR (€)
shares
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
EUR (€)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2019
EUR (€)
|
Nov. 30, 2017 |
|
| Disclosure Of Convertible Debt Explanatory Abstract | ||||||||
| Loan agreements totalling | $ 467,154 | € 417,133 | $ 467,154 | € 417,133 | ||||
| Bear interest | 3.50% | |||||||
| Loans outstanding, percentage | 0.50% | |||||||
| Per share (in Euro per share) | € / shares | € 1 | |||||||
| Debt discount totalling | € | € 13,064 | € 13,064 | ||||||
| Loan agreements, description | the Company entered into loan agreements with two shareholders of the Company for loans totaling EUR 80,278 (approximately $92,007) (the “2017 Convertible Loans”). The loans are convertible at the option of the lender to shares totaling 4.25% of the Company’s common shares outstanding at the time of conversion. The loans are non-interest bearing, are unsecured and are due on demand. During the year ended December 31, 2019, principal in the amount of EUR 5,000 ($5,597) was exchanged for the 2019 and 2020 Convertible Loans and EUR 5,000 ($5,597) was extinguished as the lender elected to offset the debt amount against amounts in trade receivables due to the Company. | |||||||
| Loan amount | $ (508,237) | € 417,272 | ||||||
| Converted share capital (in Shares) | shares | 392,757 | 392,757 | ||||||
| Cash received | $ (7,673) | € 6,485 | ||||||
Convertible Debt – Related Party (Details) - Schedule of convertible debt - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
| Convertible Debt – Related Party (Details) - Schedule of convertible debt [Line Items] | ||
| Beginning balance | $ 77,887 | $ 533,370 |
| Accretion | 1,205 | 60,136 |
| Conversion | (508,237) | |
| Effects of currency translation | (6,162) | (7,382) |
| Ending balance | 72,930 | 77,887 |
| 2019 and 2020 Convertible Loans [Member] | ||
| Convertible Debt – Related Party (Details) - Schedule of convertible debt [Line Items] | ||
| Beginning balance | 32,221 | 447,181 |
| Accretion | 1,205 | 60,136 |
| Conversion | (471,528) | |
| Effects of currency translation | (2,578) | (3,568) |
| Ending balance | 30,848 | 32,221 |
| 2017 Convertible Loans [Member] | ||
| Convertible Debt – Related Party (Details) - Schedule of convertible debt [Line Items] | ||
| Beginning balance | 45,666 | 86,189 |
| Accretion | ||
| Conversion | (36,709) | |
| Effects of currency translation | (3,584) | (3,814) |
| Ending balance | $ 42,082 | $ 45,666 |
Loans Payable (Details) |
6 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
|
Jun. 30, 2022
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
EUR (€)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
EUR (€)
|
Jun. 30, 2022
EUR (€)
|
|
| Loans Payable [Abstract] | ||||||
| Principal amount | $ 22,828 | € 20,000 | ||||
| Loan amount in percentage | 0.10% | 0.10% | ||||
| Loan bears interest | 0.10% | 0.10% | ||||
| Trade receivables percentage | 0.10% | 0.10% | ||||
| Received loans from related parties | $ 40,144 | € 35,000 | ||||
| Related party loans percentage | 6.00% | |||||
| Loans payable description | The Loans have a stated interest rate of at 6.0%. EUR 10,000 (approximately $11,461) of the loans matured on July 31, 2020 and EUR 25,000 (approximately $28,653) of the loan matured on December 31, 2021. As the Related Party 6% Loans were received at below market interest rates, the initial fair value of the 3% Loan was determined to be EUR 21,936 (approximately $25,140), determined using an estimated effective interest rate of 11.5%. | |||||
| Line of credit | $ 229,224 | € 200,000 | ||||
| Accrues interest | 4.00% | 4.00% | ||||
| Line of control | 0.50% | 0.50% | ||||
Silent Partnerships (Details) |
6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
EUR (€)
€ / shares
|
Dec. 31, 2010
USD ($)
|
Dec. 31, 2010
EUR (€)
|
|
| Silent Partnerships (Details) [Line Items] | |||||
| Silent partnership agreements description | the Company entered into silent partnership agreements whereby the lender agreed to lend a total of EUR 299,400 (approximately $341,740) (the “3% SPAs”). The Company is to repay the amount by December 31, 2025. The Company must pay a minimum of 3% interest per annum on the loans. The lender is entitled to 3% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the lender does not partake in the Company’s losses. Upon the amounts coming due, the lender of the 3% SPAs have the option to demand an additional payment equal to 15% of the contribution as a final remuneration (the “Final Renumeration”). The Final Remuneration is considered to be the cost of issuing debt. The 3% SPAs were received at below market interest rates as part of a government program for COVID-19 relief. The initial fair value of the 3% SPAs was determined to be EUR 218,120 (approximately $248,966), which was determined using an estimated effective interest rate of 11.5%. The difference between the face value and the fair value of the 3% SPAs of EUR 81,280 ($92,774) has been recognized as government grant income during the period. During the year ended December 31, 2021 the Company received the remaining EUR 200,000 ($236,640). The initial fair value of the 3.0% SPAs received was determined to be EUR 230,000 (approximately $272,136), determined using an estimated effective interest rate of 11.5%. The initial fair value of the 3.0% SPAs received in 2021 was determined to be EUR 156,549 (approximately $185,229), which was determined using an estimated effective interest rate of 11.5%. The difference between the face value and the fair value of the 3.0% SPAs received in 2021 of EUR 43,451 (approximately $51,410) has been recognized as government grant income during the period | ||||
| Agreed to lend a total | $ 57,071 | € 50,000 | $ 343,830 | € 300,000 | |
| Convertible to common shares percentage | 3.50% | 8.00% | 8.00% | ||
| Amount repayment date | Jun. 30, 2025 | Jun. 30, 2025 | Jan. 31, 2023 | Jan. 31, 2023 | |
| Interest rate per annum | 3.50% | 8.00% | 8.00% | ||
| Net income percent | 0.50% | ||||
| Per share (in Euro per share) | € 1 | ||||
| Principal amount percentage | 3.50% | ||||
| Net income percent | 1.95% | 1.95% | |||
| Additional payment percentage | 30.00% | 30.00% | |||
| Initial fair value rate | 8.00% | 8.00% | |||
| Initial fair value amount | $ 332,254 | € 289,900 | |||
| SPAs [Member] | |||||
| Silent Partnerships (Details) [Line Items] | |||||
| Silent partnership agreements description | Between the years of 2013 to 2016, the Company entered into silent partnership agreements for loans totaling EUR 798,694 (approximately $915,383) (the “8.5% SPAs”). Under the 8.5% SPAs, the Company is to repay EUR 398,634 (approximately $408,496) of the loans by June 30, 2023 and EUR 400,000 (approximately $409,859) of the loans matures on December 31, 2025. The Company must pay a minimum of 8.5% interest per annum on the loans. The lenders are entitled to 1.66% of the Company’s net income each year should the Company be profitable and provided that the amount paid does not exceed the principal amount of the debt; the lenders do not partake in the Company’s losses. At maturity, the lenders of the 8.5% SPAs have the option to demand an additional payment equal to 30% of the principal of the loans as a Final Remuneration. The Final Remuneration is considered to be cost of issuing the debt and as such, the initial fair value of the 8.5% SPAs was determined to be EUR 772,568 (approximately $85,440), determined using an estimated effective interest rate of 11.5%. Under the agreements, the lenders also agreed to invest in the Company and contributed EUR 676,366 (approximately $775,183) to acquire 27,752 shares of the Company between the years of 2013 and 2016. During the year ended December 31, 2020, EUR 80,000 (approximately $99,527) of the 8.5% SPAs was extinguished as the lender, who is also a customer of the Company, elected to offset the debt amount against amounts in trade receivables due to the Company. The debtor did not demand the Final Remuneration and the Company recognized a gain on the extinguishment of $8,214. | ||||
| Convertible to common shares percentage | 3.50% | 8.00% | 8.00% | ||
| Interest rate per annum | 3.50% | 11.50% | 11.50% | ||
Related Party Transactions (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Related Party Transactions [Abstract] | ||
| Incurred interest expense | $ 16,838 | $ 24,983 |
| Incurred accretion expense | $ 7,885 | $ 9,908 |
| Related party balances description | As at June 30, 2022, EUR 30,000 (approximately $31,452) with a carrying value of $30,848 (2021 – $33,767) of the 2019 and 2020 Convertible Loans were owing to the Chief Scientific Officer of the Company and a major shareholder of the Company, respectively. The amounts are due on September 30, 2022. As at June 30, 2022, EUR 350,000 (approximately $366,940) (2021 – EUR 350,000) with a carrying value of $445,174 (2021 – $498,972) of the 8.5% SPAs were owing to major shareholders of the Company. EUR 150,000 of the loan is due on June 30, 2023 and EUR 200,000 of the loan is due on December 31, 2025. During the six months ended June 30, 2022 and 2021, we recorded expenses of $126,173 and $0, respectively, for the cost of royalties and other associated costs owed to ColoAlert AS, the company from which we exclusively license the ColoAlert product. Our Board Chairman is also a significant equity holder of ColoAlert AS. During the six months ended June 30, 2022 and 2021, we paid ColoAlert AS $27,335 and $0, respectively. On June 30, 2022 and December 31, 2021, we had liabilities recorded for unpaid costs to ColoAlert AS of $104,840 and $84,750, respectively, recorded as Accounts payable – related party. | |
Related Party Transactions (Details) - Schedule of remuneration of directors and key management personnel - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Schedule Of Remuneration Of Directors And Key Management Personnel Abstract | ||
| Salaries and benefits | $ 1,264,187 | $ 109,733 |
Related Party Transactions (Details) - Schedule of remuneration paid to related parties - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Schedule Of Remuneration Paid To Related Parties Abstract | ||
| Salaries and benefits | $ 61,116 | $ 943 |
Government Grants (Details) - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
| Government Grants [Abstract] | ||
| Multi-marker test | $ 168,161 | |
| Antibody-based pathogens | $ 254,796 |
Government Grants (Details) - Schedule of research and development - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Schedule Of Research And Development Abstract | ||
| Rapid detection of antibody-based pathogens | $ 19,072 | $ 64,596 |
| Multi-marker test for the early detection of pancreatic cancer | 50,037 | 79,116 |
| Total research and development projects | $ 69,109 | $ 143,712 |
Financial Instrument Risk Management (Details) |
6 Months Ended | ||
|---|---|---|---|
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2022
EUR (€)
|
Jun. 30, 2021
USD ($)
|
|
| Financial Instrument Risk Management [Abstract] | |||
| Federal insured limit | $ 250,000 | € 100,000 | |
| Bad debt expense | 470 | $ 0 | |
| Unrestricted cash | 26,006,609 | ||
| Current liabilities | $ 2,473,562 | ||
| Foreign exchange risk description | As the Company operates in Germany it holds a portion of its cash balances in Euro to approximate between three to twelve months estimated operating needs. The remainder of the Company’s cash is held in U.S. Dollars, the Company’s reporting currency, which we also expect to be the currency of the Company’s largest cash outlays over the next twenty-four months. | As the Company operates in Germany it holds a portion of its cash balances in Euro to approximate between three to twelve months estimated operating needs. The remainder of the Company’s cash is held in U.S. Dollars, the Company’s reporting currency, which we also expect to be the currency of the Company’s largest cash outlays over the next twenty-four months. | |
Concentrations (Details) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Concentrations Disclosure Abstract | ||
| Annual revenues percentage | 10.00% | |
| Number of customers | 4 | 2 |
| Revenue percentage | 81.00% | 51.00% |