– Revenues of $2.7 Million Compare with $0.6
Million a Year-Ago and $1.6 Million in the First Quarter of Fiscal
2021 –
Applied DNA Sciences, Inc. (NASDAQ: APDN) (the “Company”), a
leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing,
today announced consolidated financial results for the three and
six months ended March 31, 2021.
“We are pleased to deliver a strong fiscal second quarter with
year-over-year revenue growth of 384%, capping an impressive first
half of the fiscal year distinguished by demand for our COVID-19
diagnostics and surveillance testing offerings (cumulatively
“COVID-19 testing business”),” said Dr. James A. Hayward, president
and CEO, Applied DNA. “Our strategic and operational execution
across non-COVID-19 testing initiatives was also notable: we
launched our first-ever clinical trial for a therapeutic candidate
in the form of a LinearDNA™ COVID-19 vaccine candidate for the
veterinary market; advanced our cGMP capabilities and compliance
roadmap that is a precursor to securing more lucrative CMO
relationships and lays the foundation potentially to disrupt the
market for the manufacturing of nucleic acid-based therapies;
established a recurring revenue stream from the dietary supplements
industry via Nutrition21’s use of our CertainT platform;
strengthened our capital position, and deepened the management team
to support our growth goals.”
Continued Dr. Hayward, “Our COVID-19 testing strategy is
increasingly informed by the acceleration in vaccine distribution.
While traditional positive/negative testing remains a component of
our go-to-market strategy, we believe that we are well-positioned
despite increasing vaccination rates given our ability to detect
SARS-COV-2 mutations. The expansion of our COVID-19 product
portfolio with our Selective Genomic Surveillance™ (SGS™) Panel and
expanded intended use of our EUA for our LineaTM COVID-19 Assay Kit
to include asymptomatic serial screening testing reflects a
differentiated capability that expands our addressable market to
include populations that can serve as a nexus for vaccinated and
under-vaccinated populations coming together with increasing
frequency, such as skilled nursing facilities, and supports the
reopening of schools and workplaces. With our newly expanded
intended use, together with the receipt of a New York clinical
laboratory permit and CLIA certification for COVID-19 testing using
EUA-authorized methods and devices by our Applied DNA Clinical
Labs, LLC subsidiary, we believe our COVID-19 testing business
presents a compelling opportunity for continued top-line
growth.
“During the second half of the fiscal year, we will focus on
positioning our COVID-19 testing business for the expected ongoing
need for tests and services to support clients’ reopening
strategies. While today our SGS Panel is available on a research
use only (RUO) basis, our logical next step would be to seek an EUA
to bring this critical tool out from the lab and to every Emergency
Room and other healthcare providers that serve as the first line of
defense against coronavirus variants to potentially inform their
use of monoclonal antibody and convalescent plasma therapies.
Concurrently and in line with our phased approach to cGMP that is
further bolstered by preliminary positive neutralizing antibody
results in domestic felines in our LinearDNA COVID-19 vaccine
candidate clinical trial, we intend to explore an expansion of our
LinearDNA-based therapeutic pipeline into classes of therapies that
will best utilize the many benefits of our LinearDNA platform.
“While the speed and shape of the global recovery and timing of
its impact on our supply chain security business remain uncertain,
over the past year, we have seen brands and their supply chains put
more emphasis on supply chain security and transparency to enhance
their market position exiting the pandemic. We continue to position
our CertainT® platform as an enabler of the trust that both brands
and consumers seek in a post-pandemic world, which, following the
passage of the Uyghur Forced Labor Prevention Act, has further
catalyzed our interest in leveraging our deep expertise in cotton
genotyping and new next-generation sequencing capability to support
brands’ regulatory requirements and ethical responsibilities.”
Concluded Dr. Hayward, “Our strong balance sheet affords us
substantial strategic and operational flexibility, as well as the
ability to make both short- and longer-term investments in our
businesses. We believe these investments in R&D and
pre-commercial and commercial initiatives further enhance our
growth profile.”
Fiscal Second Quarter 2021 Financial Highlights:
- Revenues increased 384% for the second quarter of fiscal 2021
to $2.7 million, compared with $552 thousand reported in the same
period of the prior fiscal year and increased 65% from $1.6 million
for the first quarter of fiscal 2021. The increase in revenues year
over year was due primarily to an increase in service revenues of
approximately $1.4 million and an increase of $767 thousand in
product revenues. The increase in service revenue was primarily
from revenues derived from our safeCircle™ COVID-19 surveillance
testing. The increase in product revenue was mainly attributable to
an increase in sales of our Linea™ COVID-19 Assay Kit.
- Total operating expenses increased to $4.6 million for the
second fiscal quarter of 2021, compared with $3.0 million in the
prior fiscal year’s second quarter. This increase is primarily
attributable to an increase in payroll of $315 thousand for
staffing of Applied DNA Clinical Labs, LLC (ADCL), as well as an
increase of $277 thousand for supplies and equipment to operate the
ADCL laboratory. The increase in operating expenses also related to
an increase in stock-based compensation expense of $422 thousand
relating to officer stock option grants that vested immediately.
The increase is also the result of increases in research and
development expenses of $171 thousand and depreciation and
amortization of $133 thousand.
- Net loss applicable to common stockholders for the quarter
ended March 31, 2021 was $1.5 million, or $0.21 per share, compared
with a net loss of $3.0 million, or $0.79 per share, for the
quarter ended March 31, 2020.
- Excluding non-cash expenses, Adjusted EBITDA was negative $1.5
million and negative $2.6 million for the quarters ended March 31,
2021 and 2020, respectively. See below for information regarding
non-GAAP measures.
- Cash and cash equivalents stood at $13.9 million on March 31,
2021, compared to $7.8 million as of September 30, 2020.
Six-Month Financial Highlights:
- Revenues increased 262% for the first six months of fiscal 2021
to $4.3 million, compared with $1.2 million reported in the same
period of the prior fiscal year. The increase in revenues year over
year was due primarily to an increase in service revenues of
approximately $2.0 million and an increase of $1.1 million in
product revenues. The increase in service revenue was primarily
from revenues derived from our safeCircle COVID-19 surveillance
testing. The increase in product revenue was mainly attributable to
an increase in sales of our Linea Assay Kit.
- Total operating expenses increased to $9.0 million for the
first six months of fiscal 2021, compared with $6.1 million in the
same period of the prior fiscal year. This increase is primarily
attributable to an increase in payroll of $1 million. The increase
in payroll relates to additional headcount to staff at ADCL, as
well as an increase for officer bonuses. The increase in operating
expenses also related to an increase in stock-based compensation
expense of $725 thousand primarily relating to officer stock option
grants that vested immediately.
- Net loss applicable to common stockholders for the six-months
ended March 31, 2021 was $6.3 million, or $1.00 per share, compared
with a net loss of $5.6 million, or $1.76 per share, for the first
six months of fiscal 2020.
- Excluding non-cash expenses, Adjusted EBITDA was negative $3.9
million for the first six months of fiscal 2021, compared to
negative $5.0 million for the same period in the prior fiscal year.
See below for information regarding non-GAAP measures.
Fiscal Second Quarter 2021 Conference Call
Information
The Company will hold a conference call and webcast to discuss
its fiscal second quarter-end 2021 results on Thursday, May 13,
2021 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, 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/mediaframe/webcast.html?webcastid=YaMBr3pT
Replay (available 1 hour following the conclusion of the live
call through May 21, 2021):
- Participant Toll Free: 1-877-344-7529
- Participant Toll: 1-412-317-0088
- Participant Passcode: 10154121
- Webcast replay:
https://services.choruscall.com/mediaframe/webcast.html?webcastid=YaMBr3pT
For those unable to attend the live call, a copy of management’s
PowerPoint presentation will be available for review under the ‘IR
Calendar’ section of the company’s Investor Relations web site:
https://adnas.com/molecular-based-security/investor-relations-calendar/
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 commercializing LinearDNA™, its proprietary,
large-scale polymerase chain reaction (“PCR”)-based manufacturing
platform that allows for the large-scale production of specific DNA
sequences.
The LinearDNA platform has utility in the nucleic acid-based in
vitro diagnostics and preclinical nucleic acid-based drug
development and manufacturing market. The platform is used to
manufacture DNA for customers as components of in vitro diagnostic
tests and for preclinical nucleic acid-based drug development in
the fields of adoptive cell therapies (CAR T and TCR therapies),
DNA vaccines (anti-viral and cancer), RNA therapies, clustered
regularly interspaced short palindromic repeats (CRISPR) based
therapies, and gene therapies. Applied DNA has also established a
COVID-19 diagnostic and testing offering that is in the early
stages of commercialization and is grounded in the Company’s deep
expertise in DNA.
The LinearDNA platform also has non-biologic applications, such
as supply chain security, anti-counterfeiting and anti-theft
technology. Key end-markets include Gov/Mil, textiles,
pharmaceuticals and nutraceuticals, and cannabis, among others.
Visit adnas.com for more information. Follow us on Twitter and
LinkedIn. Join our mailing list.
The Company’s common stock is listed on NASDAQ under ticker
symbol ‘APDN,’ and its publicly traded warrants are listed on OTC
under ticker symbol ‘APPDW.’
Applied DNA is a member of the Russell Microcap® Index.
About the Linea™ COVID-19 Assay Kit and
the Linea™ COVID-19 Selective Genomic Surveillance™ (SGS) Mutation
Panel
The LineaTM COVID-19 Assay Kit is a real-time RT-PCR test
intended for the qualitative detection of nucleic acid from
SARS-CoV-2 in respiratory specimens including anterior nasal swabs,
self-collected at a healthcare location or collected by a
healthcare worker, and nasopharyngeal and oropharyngeal swabs,
mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal
aspirates, and bronchoalveolar lavage (BAL) specimens collected by
a healthcare worker from individuals who are suspected of COVID-19
by their healthcare provider (HCP). The test is also intended for
use with anterior nasal swab specimens that are self-collected in
the presence of an HCP from individuals without symptoms or other
reasons to suspect COVID-19 when tested at least weekly and with no
more than 168 hours between serially collected specimens. The scope
of the Linea™ COVID-19 Assay Kit EUA, as amended, is expressly
limited to use consistent with the Instructions for Use by
authorized laboratories, certified under the Clinical Laboratory
Improvement Amendments of 1988 (CLIA) to perform high complexity
tests. The EUA will be effective until the declaration that
circumstances exist justifying the authorization of the emergency
use of in vitro diagnostics for detection and/or diagnosis of
COVID-19 is terminated or until the EUA’s prior termination or
revocation. The diagnostic kit has not been FDA cleared or
approved, and the EUA’s limited authorization is only for the
detection of nucleic acid from SARS-CoV-2, not for any other
viruses or pathogens.
The Company is offering surveillance testing in compliance with
current CDC, FDA, and CMS guidances. The use of saliva and pooled
sampling for surveillance testing, which has been internally
validated by the Company in compliance with current surveillance
testing guidances, is not included in the Company’s EUA
authorization for the Linea™ COVID-19 Assay Kit. The Linea™
COVID-19 Selective Genomic Surveillance™ (SGS) Mutation Panel (the
“SGS Panel”) is for Research Use Only (RUO) and shall not be used
for clinical diagnostic purposes. The SGS Panel has not been
approved or authorized to diagnose, ameliorate and/or detect any
disease by any U.S. or international regulatory authority. In
addition, all Next-Generation Sequencing services to be offered by
the Company will be for Research Use Only (RUO) and shall not be
used for clinical diagnostic purposes.
Forward-Looking Statements
The statements made by Applied DNA in this press release may be
“forward-looking” in nature within the meaning of Section 27A of
the Securities Act of 1933, Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform 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 its history of
net losses, limited financial resources, limited market acceptance,
the uncertainties inherent in research and development, future
clinical data and analysis, including whether any of Applied DNA’s
or its partner’s diagnostic or therapeutic candidates will advance
further in the preclinical research or clinical trial process,
including receiving clearance from the U.S. Food and Drug
Administration (U.S. FDA), the U.S. Department of Agriculture
(USDA) or equivalent foreign regulatory agencies to conduct
clinical trials and whether and when, if at all, they will receive
final approval from the U.S. FDA, the USDA or equivalent foreign
regulatory agencies, the unknown outcome of any applications or
requests to U.S. FDA, USDA, equivalent foreign regulatory agencies
and/or the New York State Department of Health, the unknown limited
duration of any Emergency Use Authorization (EUA) approval from
U.S. FDA, changes in guidances promulgated by the CDC, FDA and/or
CMS relating to COVID-19 surveillance testing, disruptions in the
supply of raw materials and supplies, the unknown ability to
manufacture the vaccine candidates in large quantities, the fact
that the safety and efficacy of the vaccine candidates has not yet
been established, the unknown ability of the vaccine candidates to
generate revenue or profit for Applied DNA, the fact that there has
never been a commercial drug product utilizing PCR-produced DNA
technology approved for therapeutic use, 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
17, 2020, Quarterly Reports on Form 10-Q filed on February 11, 2021
and May 13, 2021 and other reports we file with the SEC, 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 or to
reflect the occurrence of unanticipated events, unless otherwise
required by law.
Financial Tables Follow
APPLIED DNA SCIENCES,
INC.
CONSOLIDATED BALANCE
SHEETS
March 31,
September 30,
2021
2020
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
13,925,997
$
7,786,743
Accounts receivable, net of allowance of
$20,830 and $11,968 at March 31, 2021 and September 30, 2020,
respectively
2,186,442
194,319
Inventories
720,538
497,367
Prepaid expenses and other current
assets
586,207
599,296
Total current assets
17,419,184
9,077,725
Property and equipment, net
2,422,628
1,277,655
Other assets:
Deposits
95,040
95,083
Goodwill
285,386
285,386
Intangible assets, net
559,346
605,330
Total Assets
$
20,781,584
$
11,341,179
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
1,780,072
$
1,926,427
Promissory notes payable-current
portion
-
329,299
Secured convertible notes payable , net of
debt issuance costs
-
1,499,116
Deferred revenue
350,057
511,036
Total current liabilities
2,130,129
4,265,878
Long term accrued liabilities
31,467
848,307
Promissory notes payable-long term
portion
-
517,488
Total liabilities
2,161,596
5,631,673
Commitments and contingencies (Note H)
Applied DNA Sciences, Inc. Stockholders’
Equity:
Preferred stock, par value $0.001 per
share; 10,000,000 shares authorized; -0- shares issued and
outstanding as of March 31, 2021 and September 30, 2020,
respectively
-
-
Series A Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; -0- issued and outstanding
as of March 31, 2021 and September 30, 2020, respectively
-
-
Series B Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; -0- issued and outstanding
as of March 31, 2021 and September 30, 2020, respectively
-
-
Common stock, par value $0.001 per share;
200,000,000 shares authorized as of March 31, 2021 and September
30, 2020, 7,486,120 and 5,142,779 shares issued and outstanding as
of March 31, 2021 and September 30, 2020, respectively
7,488
5,144
Additional paid in capital
294,781,015
275,548,737
Accumulated deficit
(276,162,006
)
(269,835,650
)
Applied DNA Sciences, Inc. stockholders’
equity:
18,626,497
5,718,231
Noncontrolling interest
(6,509
)
(8,725
)
Total equity
18,619,988
5,709,506
Total liabilities and equity
$
20,781,584
$
11,341,179
APPLIED DNA SCIENCES,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited)
Three Month Period Ended
Six Month Period Ended
March 31,
March 31,
2021
2020
2021
2020
Revenues
Product revenues
$
965,110
$
197,801
$
1,515,207
$
435,671
Service revenues
1,706,432
354,672
2,772,476
750,321
Total revenues
2,671,542
552,473
4,287,683
1,185,992
Cost of revenues
356,610
179,582
599,172
411,613
Operating expenses:
Selling, general and administrative
3,557,487
2,285,544
7,058,391
4,658,957
Research and development
874,055
703,018
1,622,420
1,267,444
Depreciation and amortization
199,381
66,537
296,793
141,604
Total operating expenses
4,630,923
3,055,099
8,977,604
6,068,005
LOSS FROM OPERATIONS
(2,315,991
)
(2,682,208
)
(5,289,093
)
(5,293,626
)
Interest income (expense), net
13,841
(29,096
)
8,403
(58,187
)
Loss on extinguishment of convertible
notes payable
-
-
(1,774,662
)
-
Gain on extinguishment of notes payable
(PPP)
839,945
-
839,945
-
Income tax (expense)
-
-
-
-
Other expense, net
(54,873
)
(239,601
)
(108,733
)
(261,833
)
NET LOSS
$
(1,517,078
)
$
(2,950,905
)
$
(6,324,140
)
$
(5,613,646
)
Less: Net (loss) income attributable to
noncontrolling interest
$
278
$
1,220
$
(2,216
)
$
1,190
NET LOSS attributable to Applied DNA
Sciences, Inc.
$
(1,516,800
)
$
(2,952,125
)
$
(6,326,356
)
$
(5,614,836
)
Deemed dividend related to warrant
modification
$
-
$
-
$
-
$
2,842
Net loss applicable to common
stockholders
$
(1,516,800
)
$
(2,952,125
)
$
(6,326,356
)
$
(5,617,678
)
Net loss per share-basic and diluted
$
(0.21
)
$
(0.79
)
$
(1.00
)
$
(1.76
)
Weighted average shares outstanding- basic
and diluted
7,235,031
3,758,512
6,341,590
3,196,616
APPLIED DNA SCIENCES,
INC.
CALCULATION AND RECONCILIATION
OF ADJUSTED EBITDA
(unaudited)
Three Month Period Ended March
31,
Six-Month Period Ended March
31,
2021
2020
2021
2020
Net Loss
$
(1,517,078
)
$
(2,950,905
)
$
(6,324,140
)
$
(5,613,646
)
Interest expense (income), net
(13,841
)
29,096
(8,403
)
58,187
Depreciation and amortization
199,381
66,537
296,793
141,604
(Gain) Loss on extinguishment of debt
(839,945
)
-
934,717
-
Provision for bad debt
19,637
-
19,637
-
Stock based compensation expense
649,248
227,267
1,220,746
432,756
Total non-cash items
14,480
322,900
2,463,490
632,547
Consolidated Adjusted EBITDA (loss)
$
(1,502,598
)
$
(2,628,005
)
$
(3,860,650
)
$
(4,981,099
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005963/en/
Investor contact: Sanjay M. Hurry, 917-733-5573,
sanjay.hurry@adnas.com Web: www.adnas.com Twitter:
@APDN
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