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DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
should read the following discussion and analysis of our financial condition and results of operations together with our financial statements
and the related notes to those statements included in Exhibit 99.2 to this Form 6-K. This discussion and analysis contain forward-looking
statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve
risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives, expectations, forecasts and projections.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements
as a result of several factors, including those set forth under the section titled "Risk Factors" and elsewhere in our
Annual Report for the Year ended December 31, 2022 on Form 20-F, filed with the U.S. Securities and Exchange Commission on April 7, 2023.
You should carefully read the "Risk Factors" to gain an understanding of the important factors that could cause actual results
to differ materially from our forward-looking statements.
and Overview of Operations
develop in-vitro diagnostic ("IVD") tests for clinical diagnostics in the area of human genetics, focusing in the areas of
personalized medicine. Our flagship product is a colorectal cancer screening product sold under the brand name ColoAlert . We develop
and distribute our IVD kits to third-party laboratories, who in turn provide diagnostic analysis for their patients. Additionally, we
operate a clinical diagnostic laboratory for testing patient samples. Substantially all of our revenues in 2023 and 2022 were generated
from the sale of our ColoAlert kits and the analytics and delivery of results from testing patient samples.
addition, we conduct research and development in order to increase and diversify our product portfolio. During 2022 and 2023, we are
managing two government funded research and development projects, which provide us non-refundable grant income that covers a portion
of the individual project related costs. Our PancAlert product candidate research is partially funded with government programming and
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.
of the Three Months Ended September 30, 2023 and 2022
following table provides certain selected financial information for the periods presented:
| Three Months Ended September 30, | % | |||||||||||||||
| 2023 | 2022 | Change | Change | |||||||||||||
| Revenue | $ | 181,669 | $ | 96,791 | $ | 84,878 | 88 | % | ||||||||
| Cost of revenue | $ | 94,483 | $ | 78,178 | $ | 16,305 | 21 | % | ||||||||
| Gross profit | $ | 87,186 | $ | 18,613 | $ | 68,573 | 368 | % | ||||||||
| Gross margin | 48 | % | 19 | % | ||||||||||||
| Research and development | $ | 1,854,795 | $ | 909,003 | $ | 945,792 | 104 | % | ||||||||
| Sales and marketing | $ | 1,122,134 | $ | 605,844 | $ | 516,290 | 85 | % | ||||||||
| General and administrative | $ | 2,750,895 | $ | 3,979,359 | $ | (1,228,464 | ) | (31 | )% | |||||||
| Total operating expenses | $ | 5,727,824 | $ | 5,494,206 | $ | (233,618 | ) | 4 | )% | |||||||
| Loss from operations | $ | (5,640,638 | ) | $ | (5,475,593 | ) | $ | (165,045 | ) | (3 | )% | |||||
| Other expense | $ | 659,119 | $ | 120,634 | $ | 538,485 | 446 | % | ||||||||
| Net loss | $ | (6,299,757 | ) | $ | (5,596,227 | ) | $ | (703,530 | ) | (13 | )% | |||||
| Total comprehensive loss | $ | (5,818,294 | ) | $ | (5,532,128 | ) | $ | (286,166 | ) | (5 | )% | |||||
| Basic and dilutive loss per common share | $ | (0.39 | ) | $ | (0.39 | ) | $ | 0.00 | 0 | % | ||||||
| Weighted average number of common shares outstanding - basic and diluted | 15,967,714 | 14,286,157 |
for the three months ended September 30, 2023 was $181,669 as compared to $96,791 for the three months ended September 30,
2022, an increase of 88%. This increase was attributable to an increase in ColoAlert sales, primarily in Germany. We intend to continue
our efforts to grow the market for ColoAlert, both in Germany and extending to other countries in Europe and the rest of world.
of Revenue for the three months ended September 30, 2023 was $94,483 as compared to $78,178 for the three months ended September
30, 2022, a 21% increase. This increase was the result of increased ColoAlert sales volume.
profit increased to $87,186 in the three months ended September 30, 2023 compared to $18,613, for the three months ended September
30, 2022. This gross profit increase, resulting in an improvement of gross margin from 19% to 48%, was attributable to improved profits
resulting from lowered unit cost of goods sold which in turn was attributable to economies of scale from increased volumes.
and Development Expenses
and development expenses for the three months ended September 30, 2023, were $1,854,795 compared to $909,003 for the
three months ended September 30, 2022, an increase of $945,792. This increase was driven by increased payroll expenses of
$504,110 to support our ColoFuture and eAArly Detect feasibility studies in the U.S. and in Europe. Additionally, direct costs for
our studies increased by $76,363 for the three months ended September 30, 2023, compared to the same period in 2022. Further,
amortization of intangible assets related to our intellectual property increased by $131,200 and lab overhead increased by $185,302
for the three months ended September 30, 2023 compared to the comparable period of 2022.
and Marketing Expenses
and marketing expenses for the three months ended September 30, 2023, were $1,122,134 compared to $605,844 for the three months
ended September 30, 2022, an increase of $516,290. This net increase was the result of an increase in labor costs (salary and consulting)
of $848,559 to support the sale of our ColoAlert product and a decrease in advertising expenses of $374,831 in the three months ended
September 30, 2023 compared to the comparable period in 2022.
and Administrative Expenses
General and administrative expenses for the three months ended
September 30, 2023 were $2,750,895 compared to $3,979,359 for the three months ended September 30, 2022, a decrease of $1,228,464.
The decreased expenses were primarily the result of a decrease of $1,821,042 of non-cash stock option expenses, and increased overhead
to support both a larger employee base, as well as support of our clinical studies and European commercial efforts.
expenses, net for the three months ended September 30, 2023 was $659,119 compared to $120,634 for the three months ended September
30, 2022, resulting in increased other expenses (net) of $538,485. This increase was primarily the result of foreign currency transaction
losses and increased interest expenses related to our equipment financing program of approximately $86,000. Foreign currency transaction
losses result from the translation of net liabilities from Euro to U.S. Dollars.
of the Nine Months Ended September 30, 2023 and 2022
following table provides certain selected financial information for the periods presented:
| Nine Months Ended September 30, | % | |||||||||||||||
| 2023 | 2022 | Change | Change | |||||||||||||
| Revenue | $ | 680,718 | $ | 336,596 | $ | 344,122 | 102 | % | ||||||||
| Cost of revenue | $ | 305,793 | $ | 190,741 | $ | 115,052 | 60 | % | ||||||||
| Gross profit | $ | 374,925 | $ | 145,855 | $ | 229,070 | 157 | % | ||||||||
| Gross margin | 55 | % | 43 | % | ||||||||||||
| Research and development | $ | 7,591,168 | $ | 1,702,491 | $ | 5,888,677 | 346 | % | ||||||||
| Sales and marketing | $ | 5,207,795 | $ | 3,393,858 | $ | 1,813,937 | 53 | % | ||||||||
| General and administrative | $ | 7,630,246 | $ | 13,104,566 | $ | (5,474,320 | ) | (42 | )% | |||||||
| Total operating expenses | $ | 20,429,209 | $ | 18,200,915 | $ | 2,228,294 | 12 | % | ||||||||
| Loss from operations | $ | (20,054,284 | ) | $ | (18,055,060 | ) | $ | (1,999,224 | ) | (11 | )% | |||||
| Other expense | $ | 1,058,116 | $ | 143,614 | $ | 914,502 | 637 | % | ||||||||
| Net loss | $ | (21,112,400 | ) | $ | (18,198,674 | ) | $ | (2,913,726 | ) | (16 | )% | |||||
| Total comprehensive loss | $ | (20,781,533 | ) | $ | (18,051,932 | ) | $ | (2,729,601 | ) | (15 | )% | |||||
| Basic and dilutive loss per common share | $ | (1.38 | ) | $ | (1.32 | ) | $ | (0.06 | ) | (5 | )% | |||||
| Weighted average number of common shares outstanding - basic and diluted | 15,924,040 | 13,821,914 |
Revenue for the nine months ended September
30, 2023 was $680,718 as compared to $336,596 for the nine months ended September 30, 2022, an increase of 102%. This increase was primarily
attributable to an increase in ColoAlert sales, which were primarily in Germany. We intend to continue our efforts to grow the market
for ColoAlert, both in Germany and extending to other countries in Europe and the rest of world.
Cost of Revenue for the nine months ended September
30, 2023 was $305,793 as compared to $190,741 for the nine months ended September 30, 2022, a 60% increase. This increase was the result
of increased ColoAlert sales volume.
Gross profit increased to $374,925 in the nine months ended September
30, 2023 compared to $145,855, for the nine months ended September 30, 2022. This gross profit increase, resulting in an improvement of
gross margin from 43% to 55%, was attributable to improved profits resulting from lowered unit cost of goods sold attributable to economies
of scale with increased volumes.
and Development Expenses
and development expenses for the nine months ended September 30, 2023 were $7,591,168 compared to $1,702,491 for the nine months
ended September 30, 2022, an increase of $5,888,677. This increase was driven by increased payroll expenses of $1,975,576 to support
our ColoFuture and eAArly Detect feasibility studies in the U.S. and in Europe. Additionally, direct costs for our studies increased
by $2,724,812 for the nine months ended September 30, 2023, compared to the same period in 2022. Further, amortization of intangible
assets related to our intellectual property increased by $342,075 and lab overhead increased by $675,028 for the nine months ended
September 30, 2023 compared to the comparable period of 2022.
and Marketing Expenses
and marketing expenses for the nine months ended September 30, 2023, were $5,207,795 compared to $3,393,858 for the nine months ended
September 30, 2022, an increase of $1,813,937. This increase was related to labor costs (salary and consulting) to support the sale of
our ColoAlert product, which increased by $2,205,539 and a decrease in advertising expenses of $445,165 for the nine months ended September
30, 2023 compared to the comparable period in 2022.
and Administrative Expenses
General and administrative expenses for the nine months ended September
30, 2023 were $7,630,246 compared to $13,104,566 for the nine months ended September 30, 2022, a decrease of $5,474,320. The decreased
expenses were primarily the result of a decrease of $5,046,819 of non-cash stock option expense, and decreased salary and consulting costs
of $1,156,776, related to legal, banking, and accounting fees primarily related to our capital raising efforts in the first nine months
expenses, net for the nine months ended September 30, 2023 was $1,058,116 compared to $143,614 for the nine months ended September 30,
2022, resulting in increased other expenses (net) of $914,502. This increase was the result of commitment fees and expenses related to
our June 28, 2023 financing of $280,000, foreign currency transaction losses and increased interest expenses related to our equipment
financing program of approximately $230,000. Foreign currency transaction losses result from the translation of net liabilities from
Euro to U.S. Dollars.
and Capital Resources
principal liquidity requirements are for working capital and operating losses. We fund our liquidity requirements primarily through cash
on hand, cash flows from operations and debt and equity financing. As of September 30, 2023, we had $9,320,381 of cash and cash equivalents,
with $17,141,775 as of December 31, 2022.
following table summarizes our cash flows from operating, investing and financing activities:
| Nine Months Ended September 30, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| Cash used in operating activities | $ | (17,283,658 | ) | $ | (10,057,242 | ) | $ | (7,226,416 | ) | |||
| Cash used in investing activities | $ | (1,637,033 | ) | $ | (643,637 | ) | $ | (933,396 | ) | |||
| Cash provided by financing activities | $ | 10,760,886 | $ | 24,052,931 | $ | (13,292,045 | ) |
Flow from Operating Activities
the nine months ended September 30, 2023, cash flows used in operating activities was $17,283,658 compared to $10,057,242 used during
the nine months ended September 30, 2022. The increase in cash flows used in operating activities of $7,226,416 was primarily the result