Company To Hold Conference Call and Webcast
Today, Thursday, February 8, 2018 at 4:30 PM EST
Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the
"Company"), announced financial results for the fiscal 2018 first
quarter ended December 31, 2017.
“We made significant progress in the first quarter on the
execution of our growth strategy to expand our base of business in
our core markets and broaden the application of our molecular
tagging technology platform in adjacent markets, although our
results reflect a slow start to the fiscal year,” stated Dr. James
A. Hayward, chairman, president and CEO. “During and subsequent to
the end of the fiscal first quarter, we developed new, long-term
revenue opportunities, including the expansion of our cotton
business into international markets with our first sale of a DNA
Transfer System to an overseas ginner, and secured a contract award
from TheraCann that leverages our cotton expertise to better track
cannabis and its derivatives. Through our synthetic fiber customer
GHCL, we have also gained the attention of the largest integrated
producer of polyester fiber and yarn in the world on our CertainT
platform and, with the upcoming filing of our Drug Master File with
the FDA, we can now pursue revenue opportunities with
pharmaceutical companies in a much more vigorous manner.
“Looking ahead to the balance of fiscal 2018, the expansion of
our cotton business into a major overseas cotton-producing region
reflects the growing importance brands owners, retailers and
manufacturers place on the origin and authenticity of their
cotton-based products and the continued adoption of our proven
molecular taggant technology for textiles. This, together with
continued adoption of CertainT by the synthetic fiber market and
the imminent entry into the cannabis, pharmaceuticals, and other
adjacent market opportunities, give us reason for continued
optimism for this fiscal year. We, therefore, are reaffirming our
base revenue guidance for fiscal 2018 of $6.5 million with a
majority of revenue to be generated in our fiscal third and fourth
quarters that are our peak cotton quarters,” concluded Dr.
Hayward.
Fiscal First Quarter Financial Results:
- Revenues decreased 28% for the first
quarter of fiscal 2018 to $648 thousand, compared with $903
thousand reported in the first quarter of fiscal 2017, and
decreased 43% from the $1.1 million reported in the fourth fiscal
quarter ended September 30, 2017. The year-over-year and
quarter-over-quarter decrease in revenues resulted primarily from
the timing of shipments and the recognition of deferred revenue
related to our cotton contracts.
- Total operating expenses decreased to
$3.5 million for the first fiscal quarter of 2018, compared with
$4.6 million in the prior fiscal year’s first quarter. This
decrease is primarily attributable to a decrease in stock based
compensation expense.
- Net loss for the quarter ended December
31, 2017 was $3.2 million, or $0.12 per share, compared with a net
loss of $4.0 million, or $0.16 per share, for the quarter ended
December 31, 2016 and a net loss of $2.9 million, or $0.10 per
share for the quarter ended September 30, 2017.
- Excluding non-cash expenses, Adjusted
EBITDA was negative $2.8 million for the quarter ended December 31,
2017 and $2.3 million for the same quarter in the prior fiscal
year.
Recent Operational Highlights:
- On February 6, Applied DNA announced
that it had generated successful initial results of the Company’s
ability to detect its taggant throughout all points in the legal
cannabis supply chain. Applied DNA believes that its taggants will
serve as a unique forensic identifier that becomes part of a
blockchain transaction throughout the legal cannabis supply
chain.
- On January 31, the Company announced
the first international order of its patent-pending SigNature® T
DNA Transfer system for an overseas cotton market. The system will
be installed in Applied DNA’s fiscal second quarter and in advance
of expected orders for its molecular taggants for cotton.
- On January 29, Applied DNA announced
its collaboration with its customer GHCL and GHCL supplier Reliance
Industries Ltd. to launch CertainT® verified recycled PET bedding
products at New York Home Fashions week. Reliance’s involvement
underscores growing awareness and interest in Applied DNA’s
CertainT supply chain authentication platform by synthetic fiber
manufacturers.
- On January 25, the Company announced
the signing of an initial two-year, $1 million contract with
TheraCann International Benchmark Corporation for the integration
of Applied DNA’s SigNature molecular tagging and testing technology
into TheraCann’s blockchain-based, seed-to-sale Enterprise Resource
Platform (ERP) for legal cannabis operations. Under the terms of
the contract, the two companies have entered into a development and
marketing agreement whereby the Company will develop the
technologies necessary to tag and authenticate legal cannabis
throughout the supply chain and seamlessly integrate tagging and
authentication data into TheraCann’s ERP and Blockchain
platform.
- On January 23, Applied DNA announced
the establishment of a Central DNA Testing Laboratory in Ahmedabad,
India, to provide full forensic authentication services. The
laboratory, scheduled to open on February 15, 2018, supports the
Company’s growing global textile business in the Asia-Pacific
region with expansion capability for other supply chains present in
the region, such as fertilizer and pharmaceuticals.
- On January 18, Applied DNA announced
the introduction of a GeoTyping™ Beta Program for the month of
February, to brands and retailers interested in identifying
country-of-origin cases of cotton fiber substitution. The Company’s
high-resolution cotton GeoTyping assays are a complement to
SigNature T® tagging and serves as a means to identify the source
of cotton fiber substitution.
- On December 20, the Company entered
into a securities purchase agreement with certain institutional
investors to purchase an aggregate of 2,735,000 shares of common
stock and warrants to purchase an aggregate of 2,735,000 shares of
common stock in a registered direct offering. The offering closed
on December 22, 2017 with net proceeds of approximately $4.2
million, exclusive of warrant exercise proceeds. Applied DNA
intends to use the net proceeds of the offering for working
capital, capital expenditures, business development and research
and development expenditures and the acquisitions of new
technologies or businesses.
Fiscal First Quarter 2018 Conference Call Information
The Company will hold a conference call and webcast to discuss
its fiscal first quarter-end 2018 results on Thursday, February 8,
2018 at 4:30 PM ET. To participate on the conference call, please
follow the instructions below. While every attempt will be made to
answer investors’ questions on the Q&A portion of the call, due
to the large number of expected participants, not all questions may
be answered.
To Participate:
- Participant Toll
Free:1-844-887-9402
- Participant Toll: 1-412-317-6798
- Please ask to be joined to the Applied
DNA Sciences call
Live webcast:
https://services.choruscall.com/links/apdn180208.html
Replay (available 1 hour following the conclusion of the live
call through February 9, 2018):
- Participant Toll Free:
1-877-344-7529
- Participant Toll: 1-412-317-0088
- Participant Passcode: 10115974
- Webcast replay: https://services.choruscall.com/links/apdn180208.html
For those investors unable to attend the live call, a copy of
the presentation is expected to be posted by end of business on
February 8, 2018 and available under the ‘Events and Presentations’
section of the company’s Investor Relations web site:
http://adnas.com/adnas_home/investors/.
Information about Non-GAAP Financial Measures
As used herein, “GAAP” refers to accounting principles generally
accepted in the United States of America. To supplement our
condensed consolidated financial statements prepared and presented
in accordance with GAAP, this earnings release includes Adjusted
EBITDA, which is a non-GAAP financial measure as defined in Rule
101 of Regulation G promulgated by the Securities and Exchange
Commission. Generally, a non-GAAP financial measure is a numerical
measure of a company’s historical or future performance, financial
position, or cash flows that either excludes or includes amounts
that are not normally excluded or included in the most directly
comparable measure calculated and presented in accordance with
GAAP. The presentation of this non-GAAP financial information is
not intended to be considered in isolation or as a substitute for,
or superior to, the financial information presented in accordance
with GAAP. We use this non-GAAP financial measure for internal
financial and operational decision making purposes and as a means
to evaluate period-to-period comparisons of the performance and
results of operations of our core business. Our management believes
that these non-GAAP financial measures provide meaningful
supplemental information regarding the performance of our business
by excluding non-cash expenses that may not be indicative of our
recurring operating results. We believe this non-GAAP financial
measure is useful to investors as they allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making.
“EBITDA”- is defined as earnings (loss) before interest expense,
income tax expense and depreciation and amortization expense.
“Adjusted EBITDA”- is defined as EBITDA adjusted to exclude (i)
stock-based compensation and (ii) other non-cash expenses.
About Applied DNA Sciences
Applied DNA is a provider of molecular technologies that enable
supply chain security, anti-counterfeiting and anti-theft
technology, product genotyping and DNA mass production for
diagnostics and therapeutics.
We make life real and safe by providing innovative,
molecular-based technology solutions and services that can help
protect products, brands, entire supply chains, and intellectual
property of companies, governments and consumers from theft,
counterfeiting, fraud and diversion. The proprietary DNA-based
CertainT® platform can be used to identify, tag, test, and track
products, to help assure authenticity, origin, traceability,
sustainability and quality of products.
SigNature® DNA describes the core technology ingredient that is
at the heart of a family of uncopyable, security and authentication
solutions such as SigNature®T and fiberTyping®, targeted towards
textiles and apparel, BackTrac® and DNAnet®, for anti-theft and
loss prevention, and digitalDNA®, providing powerful
track-and-trace. All provide a forensic chain of evidence, and can
be used to prosecute perpetrators. Applied DNA Sciences is also
engaged in the large-scale production of specific DNA sequences
using the polymerase chain reaction.
Visit adnas.com for more information. Follow us
on Twitter and LinkedIn. Join our mailing
list.
Visit adnas.com for more information. Follow us
on Twitter and LinkedIn. Join our mailing
list.
Forward-Looking Statements
The statements made by Applied DNA in this press release may be
“forward-looking” in nature within the meaning of the Private
Securities Litigation Act of 1995. Forward-looking statements
describe Applied DNA’s future plans, projections, strategies and
expectations, and are based on assumptions and involve a number of
risks and uncertainties, many of which are beyond the control of
Applied DNA. Actual results could differ materially from those
projected due to our lack of significant revenues, limited
financial resources, limited market acceptance, history of net
losses, shifting enforcement priorities of US federal laws relating
to cannabis, market competition and various other factors detailed
from time to time in Applied DNA’s SEC reports and filings,
including our Annual Report on Form 10-K filed on December 28, 2017
and our subsequent quarterly report on Form 10-Q filed on February
8, 2018, which are available at www.sec.gov. Applied DNA
undertakes no obligation to update publicly any forward-looking
statements to reflect new information, events or circumstances
after the date hereof to reflect the occurrence of unanticipated
events, unless otherwise required by law.
APPLIED DNA SCIENCES, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2017
September 30,
2017
ASSETS Current assets: Cash and cash equivalents $ 4,764,553 $
2,959,781 Accounts receivable, net of allowance of $10,000 at
December 31, 2017 and September 30, 2017, respectively 2,155,737
2,587,969 Inventories 314,088 326,468 Prepaid expenses and other
current assets 540,048 366,954 Total current
assets 7,774,426 6,241,172 Property and equipment, net
500,452 523,688 Other assets: Deposits 62,453 61,626
Goodwill 285,386 285,386 Intangible assets, net 986,260 1,042,076
Total Assets $ 9,608,977 $ 8,153,948
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable and accrued liabilities $ 1,127,536 $ 944,133
Deferred revenue 342,960 351,735
Total current liabilities 1,470,496 1,295,868
Commitments and contingencies Stockholders’ Equity Preferred
stock, par value $0.001 per share; 10,000,000 shares authorized;
-0- shares issued and outstanding as of December 31, 2017 and
September 30, 2017 - - Series A Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; -0- issued and outstanding
as of December 31, 2017 and September 30, 2017 - - Series B
Preferred stock, par value $0.001 per share; 10,000,000 shares
authorized; -0- issued and outstanding as of December 31, 2017 and
September 30, 2017 - - Common stock, par value $0.001 per
share; 500,000,000 shares authorized; 30,112,057 and 27,377,057
shares issued and outstanding as of December 31, 2017 and September
30, 2017, respectively 30,112 27,377 Additional paid in capital
247,965,236 243,503,858 Accumulated deficit (239,856,867 )
(236,673,155 ) Total stockholders’ equity
8,138,481 6,858,080 Total Liabilities and
Stockholders’ Equity $ 9,608,977 $ 8,153,948
APPLIED DNA SCIENCES, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended December 31, 2017
2016 Revenues: Product revenues $350,133 $704,417 Service
revenues 297,544 198,591 Total revenues 647,677 903,008 Cost of
revenues 331,440 274,832 Operating expenses: Selling, general and
administrative 2,593,154 3,900,917 Research and development 740,067
518,628 Depreciation and amortization 157,648 161,977 Total
operating expenses 3,490,869 4,581,522 LOSS FROM OPERATIONS
(3,174,632) (3,953,346) Other income (expense): Interest income,
net - 1,331 Other (expense) income, net (9,080) (9,369) Loss before
provision for income taxes (3,183,712) (3,961,384) Provision for
income taxes - - NET LOSS
$ (3,183,712) $
(3,961,384) Net loss per share-basic and diluted
$
(0.12) $ (0.16) Weighted average shares
outstanding- Basic and diluted
27,674,340
25,427,407
APPLIED DNA SCIENCES, INC.
CALCULATION AND RECONCILIATION OF
ADJUSTED EBITDA
Three Months Ended December 31,
2017 2016 Net Loss $ (3,183,712) $ (3,961,384)
Interest income, net - (1,331) Depreciation
and amortization 157,648 161,977 Stock based compensation
expense 231,113 1,458,020 Bad debt expense - 5,646
Total non-cash items 388,761 1,624,312 Consolidated Adjusted
EBITDA (loss) $ (2,794,951) $ (2,337,072)
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version on businesswire.com: http://www.businesswire.com/news/home/20180208006061/en/
Investor:LHA Investor RelationsSanjay M. Hurry,
212-838-3777shurry@lhai.comorMedia:Dian Griesel
Int'l.Susan Forman,
212-825-3210sforman@dgicomm.comorWeb:www.adnas.comorTwitter:@APDN
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