Full Press Release Details
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
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
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".
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 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
| 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 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 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.
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
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
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.
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.