- Clinical Testing Services Drive Revenue
Growth of 153% Year-Over-Year to $4.3 Million -
- Post-Quarter Close Cash Balance of $16.8
Million Includes Proceeds from Upsized Public Offering and Warrant
Exercises -
- Company to Hold Conference Call and Webcast
Today, August 11, 2022, at 4:30 PM ET -
Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the
“Company”), a leader in PCR-based DNA technologies, today announced
consolidated financial results for the third quarter of fiscal
2022, ended June 30, 2022. The Company’s results are in line with
preliminary selected quarterly results issued in the Company’s Form
S-1/A filed on August 1, 2022.
“We executed well in the fiscal third quarter, managing our
financial results through COVID-19 testing seasonality inherent to
our academia-heavy client base and the implementation of cost
management initiatives to optimize our cost structure and
reallocate resources towards our strategic growth pillars to drive
long-term growth,” stated Dr. James A. Hayward, president and CEO
of Applied DNA. “Revenues increased substantially year-over-year
driven by continued demand for fast, accurate detection of COVID-19
especially considering the high transmissibility of the new
sub-variants. Fiscal management remained a key focus, resulting in
a 15% sequential decline in total operating expenses and a halving
of our average monthly cash burn rate since the beginning of this
fiscal year. These organizational adjustments underscore our
commitment to our LinearDNA platform's value-creation potential and
to sustainable long-term growth.
“Our performance during the quarter was notable also for the
groundwork laid for multiple inflection points over the balance of
the current fiscal year and as we look ahead to fiscal 2023,”
continued Dr. Hayward. “Notably, we ramped up the positioning of
our LinearDNA™ platform as an alternative to plasmids (pDNA) to
service the growing global demand for DNA for genetic medicines. We
have determined that the platform’s near-term opportunity lies in
its use as a replacement for pDNA in the manufacture of mRNA
therapeutics. To that end, we recently presented for the first-time
key data demonstrating the numerous advantages of using linearDNA
to manufacture mRNA at an industry conference. The industry’s
receptivity to linearDNA gives us confidence that we are at the
right place and at the right time with a cell-free workflow for
mRNA manufacture that is potentially more cost-effective and more
scalable than pDNA and, in our view, even outpaces our competition
in certain use cases. We are moving to cultivate linearDNA supply
contracts across the mRNA production spectrum, from therapy
developers to contract development and manufacturing
organizations.
“At ADCL, we believe the recent receipt of a 12-month contract
extension from the City University of New York (CUNY), our largest
client for COVID-19 testing services, serves as a solid foundation
for continued revenue. Having established ADCL’s workflow with
high-throughput COVID-19 testing and with its access to the
Company’s DNA expertise, ADCL can develop molecular diagnostics
quickly and, we believe, profitably,” continued Dr. Hayward. “Our
ongoing development of a monkeypox virus test and pharmacogenomics
(PGx) panel offers the excellent potential for uplift in ADCL’s
profit margin upon commercialization. We are on track to submit the
validation package for the monkeypox test in the coming weeks and
anticipate the commercial launch of the PGx panel in early 2023,
both contingent on the New York State Department of Health (NYSDOH)
approval as Laboratory Developed Tests (LDTs). Armed with an
approved LDT, ADCL can serve as a reference lab to hospital systems
and larger clinical labs in New York State and clinical labs in
many other States that accept clinical labs permitted under the
NYSDOH Clinical Laboratory Evaluation Program.
“As for our supply chain integrity business, we believe the
implementation of the Uyghur Forced Labor Prevention Act (UFLPA) on
June 21 is driving the industry’s conversations around regulatory
compliance towards our CertainT® authentication platform following
the Federal government’s recognition of isotopic testing and DNA
traceability as evidence of compliance with the UFLPA. CertainT’s
layered, technology-first, and forensic approach, we believe, makes
it ideally suited to enable customers to withstand the rigor of a
Customs and Border Protection inquiry of goods about to enter the
U.S. marketplace that can also serve to secure brands’ supply
chains and backstop their product claims. We have begun to onboard
new CertainT clients for isotopic testing catalyzed by the UFLPA
while concurrently pursuing sales opportunities both domestically
and internationally catalyzed by the need to differentiate cottons
and production from those under the UFLPA’s scrutiny.”
Concluded Dr. Hayward, “Subsequent to the close of the quarter,
we closed on an equity offering primarily to fund the further
development of our LinearDNA platform and support the expansion of
ADCL’s diagnostics offering through commercialization. We are
focused on advancing the LinearDNA platform to serve as the common
denominator for the next generation of DNA-based therapies - beyond
mRNA to DNA vaccines and gene and cell therapies. We believe we are
well positioned for future growth with a strengthened balance sheet
supporting our pivot towards a growing biotherapeutics
opportunity.”
Third Quarter Fiscal 2022 Financial Highlights:
- Revenues increased 153% for the third quarter of fiscal 2022 to
$4.3 million, compared with $1.7 million reported in the same
period of the prior fiscal year and decreased 30% from $6.1 million
for the second quarter of fiscal 2022. The increase in revenues
year-over-year was due primarily to an increase in clinical
laboratory service revenues from the safeCircle™ COVID-19 testing
platform of $3.1 million. This increase was offset by a decrease in
product revenues of approximately $420 thousand due mainly to a
decrease in sales of the Linea™ 1.0 COVID-19 Assay Kit and
supplies.
- Gross profit for the three months ended June 30, 2022, was $1.0
million, or 24%, compared with $584 thousand and 34% for the same
period in the prior fiscal year. The decline in the gross profit
percentage was the result of a significant portion of our clinical
laboratory service revenues coming from the testing contracts where
we also provide and staff the testing centers, as these contracts
have higher costs associated with them as compared to our
surveillance testing contracts.
- Total operating expenses decreased to $3.9 million for the
third quarter of fiscal 2022, compared with $4.0 million in the
prior-year quarter and decreased from $4.5 million for the second
quarter of fiscal 2022. The year-over-year decrease is primarily
attributable to a decrease in research and development expenses of
approximately $279 thousand, offset by an increase in selling,
general and administrative expenses of approximately $130
thousand.
- Net loss applicable to common stockholders for the third
quarter of fiscal 2022, was $1.1 million, or $0.13 per share,
compared with a net loss of $3.4 million, or $0.48 per share, for
the prior-year quarter.
- Excluding non-cash expenses, Adjusted EBITDA was negative $2.3
million and negative $2.8 million for the third quarters of fiscal
2022 and 2021, respectively. See below for information regarding
non-GAAP measures.
- Cash and cash equivalents stood at $4.7 million on June 30,
2022, compared with $6.6 million as of September 30, 2021. Cash and
cash equivalents do not include the proceeds from a public offering
that closed on August 8, 2022, which raised gross proceeds of $12
million and warrant exercises on August 8, 2022, totaling $3.6
million.
Third Quarter Fiscal 2022 Conference Call Information
The Company will hold a conference call and webcast to discuss
its third quarter fiscal 2022 financial results today, Thursday,
August 11, 2022, at 4:30 PM ET. To participate in 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 and Replay of webcast:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=ZseYEdDH
Telephonic replay (available 1 hour following the conclusion
of the live call through August 18, 2022):
- Participant Toll Free: 1-877-344-7529
- Participant Toll: 1-412-317-0088
- Participant Passcode: 7769802
Presentation slides will also be posted to the “News &
Events” section of the Applied DNA website at
https://investors.adnas.com/ and embedded into the live
webcast.
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 Sciences is a biotechnology company developing
technologies to produce and detect deoxyribonucleic acid ("DNA").
Using the polymerase chain reaction ("PCR") to enable both the
production and detection of DNA, we operate in three primary
business markets: (i) the manufacture of DNA for use in nucleic
acid-based therapeutics; (ii) the detection of DNA in molecular
diagnostics testing services; and (iii) the manufacture and
detection of DNA for industrial supply chain security services.
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 the ticker
symbol 'APDN,' and its publicly traded warrants are listed on OTC
under the ticker symbol 'APPDW.'
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, the substantial doubt
about its ability to continue as a going concern, the unknown
amount of revenues and profits that will result from any COVID-19
testing contract, limited market acceptance, future clinical data
and analysis, including whether any of Applied DNA’s or its
partner’s therapeutic candidates will advance further in the
preclinical research or clinical trial process, including receiving
clearance from the U.S. Food and Drug Administration (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 FDA, the
USDA or equivalent foreign regulatory agencies, the unknown limited
duration of any Emergency Use Authorization (EUA) approval from FDA
and whether EUA approval will be granted by the FDA, changes in
guidance promulgated by the CDC, FDA and/or CMS relating to
COVID-19 testing, the fact that there has never been a commercial
drug product utilizing PCR-produced DNA technology approved for
therapeutic use, Applied DNA's unknown ability to successfully
enter into commercial contracts for the implementation of its
CertainT® platform, whether a monkeypox virus test can be
successfully developed and be approved by NYSDOH, and various other
factors detailed from time to time in Applied DNA’s SEC reports and
filings, including its Annual Report on Form 10-K filed on December
9, 2021, its Quarterly Reports on Form 10-Q filed on February 10,
2022, May 12, 2022, and August 11, 2022 and other reports it files
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.
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30,
September 30,
2022
2021
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
4,681,878
$
6,554,948
Accounts receivable, net of allowance of
$39,821 and $29,821 at June 30, 2022 and September 30, 2021,
respectively
2,858,966
2,804,039
Inventories
1,172,320
1,369,933
Prepaid expenses and other current
assets
554,639
568,881
Total current assets
9,267,803
11,297,801
Property and equipment, net
2,557,475
3,023,915
Other assets:
Deposits
94,982
95,040
Total assets
$
11,920,260
$
14,416,756
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
3,527,131
$
2,991,343
Deferred revenue
757,264
281,000
Total current liabilities
4,284,395
3,272,343
Long term accrued liabilities
31,467
31,467
Common Warrant liability
809,700
—
Total liabilities
5,125,562
3,303,810
Commitments and contingencies (Note G)
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 June 30, 2022 and September 30, 2021,
respectively
—
—
Series A Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; -0- issued and outstanding
as of June 30, 2022 and September 30, 2021, respectively
—
—
Series B Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; -0- issued and outstanding
as of June 30, 2022 and September 30, 2021, respectively
—
—
Common stock, par value $0.001 per share;
200,000,000 shares authorized as of June 30, 2022 and September 30,
2021, 8,982,520 and 7,486,120 shares issued and outstanding as of
June 30, 2022 and September 30, 2021, respectively
8,984
7,488
Additional paid in capital
298,624,138
295,228,272
Accumulated deficit
(291,836,869
)
(284,122,092
)
Applied DNA Sciences, Inc. stockholders’
equity:
6,796,253
11,113,668
Noncontrolling interest
(1,555
)
(722
)
Total equity
6,794,698
11,112,946
Total liabilities and equity
$
11,920,260
$
14,416,756
APPLIED DNA SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED
JUNE 30, 2022, AND 2021
(unaudited)
Three Months Ended June
30,
Nine Months Ended June
30,
2022
2021
2022
2021
Revenues
Product revenues
$
219,765
$
639,637
$
1,454,427
$
2,154,844
Service revenues
182,796
234,070
570,759
678,896
Clinical laboratory service revenues
3,893,810
826,613
12,584,174
3,154,263
Total revenues
4,296,371
1,700,320
14,609,360
5,988,003
Cost of product revenues
307,049
577,480
1,211,959
1,215,499
Cost of clinical laboratory service
revenues
2,950,064
538,626
8,760,520
1,356,956
Total cost of product and clinical
laboratory service revenues
3,257,113
1,116,106
9,972,479
2,572,455
Gross profit
1,039,258
584,214
4,636,881
3,415,548
Operating expenses:
Selling, general and administrative
3,013,967
2,883,812
11,224,015
9,349,647
Research and development
863,025
1,142,111
3,013,162
2,861,657
Total operating expenses
3,876,992
4,025,923
14,237,177
12,211,304
LOSS FROM OPERATIONS
(2,837,734
)
(3,441,709
)
(9,600,296
)
(8,795,756
)
Interest income
—
3,572
5,813
11,975
Loss on extinguishment of debt
—
—
—
(1,774,662
)
Gain on extinguishment of notes
payable
—
—
—
839,945
Unrealized gain on change in fair value of
the Common Warrants
1,758,200
—
2,540,700
—
Transaction costs related to warrant
liabilities
—
—
(391,335
)
—
Other expense, net
(45,263
)
(8,578
)
(160,387
)
(52,357
)
Loss before provision for income taxes
(1,124,797
)
(3,446,715
)
(7,605,505
)
(9,770,855
)
Provision for income taxes
—
—
—
—
NET LOSS
(1,124,797
)
(3,446,715
)
(7,605,505
)
(9,770,855
)
Less: Net loss (income) attributable to
noncontrolling interest
576
(2,278
)
833
(4,494
)
NET LOSS attributable to Applied DNA
Sciences, Inc.
(1,124,221
)
(3,448,993
)
(7,604,672
)
(9,775,349
)
Deemed dividend related to warrant
modifications
—
—
110,105
—
NET LOSS attributable to common
stockholders
$
(1,124,221
)
$
(3,448,993
)
$
(7,714,777
)
$
(9,775,349
)
Net loss per share attributable to common
stockholders-basic and diluted
$
(0.13
)
$
(0.48
)
$
(0.94
)
$
(1.45
)
Weighted average shares outstanding- basic
and diluted
8,982,520
7,235,031
8,184,807
6,724,503
APPLIED DNA SCIENCES,
INC.
CALCULATION AND RECONCILIATION
OF ADJUSTED EBITDA
(unaudited)
Three Month Period Ended June
30,
2022
2021
Net Loss
$
(1,124,797
)
$
(3,446,715
)
Interest expense (income), net
-
(3,572
)
Depreciation and amortization
321,185
247,771
Provision for bad debt
-
(13,392
)
Unrealized gain on change in fair value of
Common Warrants
(1,758,200
)
-
Stock based compensation expense
272,914
410,429
Total non-cash items
(1,164,101
)
641,236
Consolidated Adjusted EBITDA (loss)
$
(2,288,898
)
$
(2,805,479
)
Nine Month Period Ended June
30,
2022
2021
Net Loss
$
(7,605,505
)
$
(9,770,855
)
Interest expense (income), net
(5,813
)
(11,975
)
Depreciation and amortization
962,800
544,564
(Gain) Loss on extinguishment of debt
-
934,717
Provision for bad debt
10,000
6,245
Unrealized gain on change in fair value of
Common Warrants
(2,540,700
)
-
Transaction costs allocated to warrant
liabilities
391,335
-
Stock based compensation expense
2,245,749
1,631,175
Total non-cash items
1,063,371
3,104,726
Consolidated Adjusted EBITDA (loss)
$
(6,542,134
)
$
(6,666,129
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005664/en/
Investor Relations: Sanjay M. Hurry, 917-733-5573,
sanjay.hurry@adnas.com Web: www.adnas.com Twitter:
@APDN
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