– Revenues at Record $6.1 Million, up 130%
Year-over-Year and 48% Sequentially –
– Cash at $6.5 Million Inclusive of Net
Proceeds from Registered Direct Offering and Strong Cash
Collections –
– Receives Request for Shipment of Traceable
Tagged Cotton Catalyzed by Uyghur Forced Labor Prevention Act
Subsequent to Reported Quarter –
– Company to Hold Conference Call and Webcast
Today, Thursday, May 12, 2022, at 4:30 PM ET –
Applied DNA Sciences, Inc. (NASDAQ: APDN) (the “Company”), a
leader in cell-free, enzymatic DNA production, today announced
consolidated financial results for the second quarter of fiscal
2022, ended March 31, 2022.
“We delivered strong momentum in revenue growth with a second
consecutive quarter of record revenues that reduced cash burn while
advancing our strategic priority to develop and further position
our LinearDNA™ platform as a novel approach for the production of
the increasing number of nucleic acid-based therapeutic
applications under development by the biotherapeutics industry,”
stated Dr. James A. Hayward, president and CEO of Applied DNA. “Our
clinical lab subsidiary, ADCL (Applied DNA Clinical Labs),
continues to power our topline performance in the first half of
fiscal 2022 with revenues that exceed total revenues for the
entirety of fiscal 2021. During the quarter, COVID-19 testing
demand remained durable due to our largely academic and corporate
client base that continues to test to protect their stakeholders
and mitigate disruptions to their operations.
“Similarly, we are starting to realize the value from
investments made last year to optimize and advance our LinearDNA
platform to commercialization. We are generating compelling data,
most recently concluding in vitro studies that demonstrated that
LinearDNA encapsulated by LNP expresses well and giving us greater
confidence that a LinearDNA-LNP platform is the best delivery means
for LinearDNA as a direct therapeutic agent. We concurrently
progressed the use of the platform as a rapid IVT templating and
production system for RNA-based therapeutics that is, we feel, the
most proximal path to incremental biotherapeutic revenues. The
second half of the fiscal year should also feature data on the
applicability of our LinearDNA platform to the manufacture of
advanced therapies, including mRNA, adoptive cell therapies, and
DNA-based vaccines. In many instances, a key gating factor to rapid
and broader adoption of novel and potentially clinically invaluable
therapies is the bottleneck of plasmid DNA."
Continued Dr. Hayward, “Looking ahead to the second half of the
fiscal year, our ability to continue to mitigate cash burn and
further commercialize the LinearDNA platform will be informed by
the durability of ADCL-generated revenues, as well as the
conversion of supply chain security opportunities into CertainT®
platform orders. We expect COVID-19 testing demand to attenuate
over the summer months, given our concentration of academic clients
but foresee a path to demand resumption in the fall with the start
of the new academic year. We have continued to diversify our client
base, most notable of which was the addition of an investment
management organization after the close of the reported quarter. In
addition, we will begin validation of a new testing platform in
ADCL that empowers several forms of high-value genetic testing,
including pharmacogenetics, for which we believe consumer demand is
growing.
“Furthermore, after the close of the reported quarter, our
cotton merchant partner received a request to ship the first
quantities for traceable tagged cotton that is directly
attributable to the recent passage of the Uyghur Forced Labor
Prevention Act (the “Act”), a new Federal law. Our team has
presented to many members of Congress, Federal agencies, and
Committees regarding the utility of our platform in enforcing the
Act. Though not expected to be material to revenue in the current
fiscal year, the shipment anticipates a global brand’s multi-year
commitment to our CertainT platform through a scaled deployment
across its many supply chains. We believe that the passage of the
Act is a trigger point for the wider adoption of our CertainT
platform that holds the potential for molecular taggant sales for
textile fiber applications to become a second material revenue
stream along with ADCL revenue. With less than 45 days before the
Act goes into force, we believe interest in CertainT by brands and
their supply chains has never been higher.”
Concluded Dr. Hayward, “We believe the business model of Applied
DNA is unique in the biotechnology sector. Our expertise in
polymerase chain reaction (PCR) empowers the Company to
commercialize DNA technologies across targeted industries to give
us multiple sources of revenue growth and cash flow to help support
the development of the LinearDNA platform to produce biotherapeutic
DNA.”
Recent Operational Highlights:
- Further to a recent Letter of Intent entered into with Spindle
Biotech Inc. (“Spindle Biotech”), Applied DNA and Spindle Biotech
have formalized a research collaboration and initiated a
Proof-of-Concept study (the “PoC”) to generate mRNA at high yields.
The companies believe the combination of their respective platforms
provides for a simplified, high yield, and 100% cell-free workflow
that is differentiated from current mRNA production that uses pDNA.
In addition to increased speed and purity, the use of LinearDNA as
an IVT template for mRNA production removes several complex
manufacturing steps necessitated by plasmid DNA. The companies
intend to present results from the PoC study upon its
conclusion.
- The Company entered into a research agreement to advance
LinearDNA-based vaccine research and discovery for animal diseases
with agricultural biosecurity implications with a leading college
of veterinary medicine at a leading university on the East Coast,
USA. The research agreement seeks to combine LinearDNA as a
platform for rapid drug development with the college’s expertise in
viral vector design to advance a differentiated approach to animal
vaccine development.
Corporate Updates:
- The Company initiated a branding refresh aligned with its
positioning of the LinearDNA platform as a novel, cell-free
manufacturing foundation for nucleic acid-based therapies. As part
of the brand refresh, a LinearDNA-specific website will be launched
in the coming months dedicated to showcasing LinearDNA’s attributes
to therapy developers and manufacturers.
- Dr. Hayward voluntarily waived 50% of his cash compensation
effective March 7, 2022, as part of a cost management program
implemented by the Company in the reported quarter.
Second Quarter Fiscal 2022 Financial Highlights:
- Revenues increased 130% for the second quarter of fiscal 2022
to $6.1 million, compared with $2.7 million reported in the same
period of the prior fiscal year and increased 48% from $4.2 million
for the first 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 $3.9 million. This increase was offset by a decrease in
product revenues of approximately $557 thousand due mainly to a
decrease of approximately $605 thousand in sales of the Linea™ 1.0
COVID-19 Assay Kit.
- Gross profit for the three months ended March 31, 2022, was
$2.5 million, or 40%, compared with $1.7 million and 65% for the
same period in the prior fiscal year. The decline in gross margin
was primarily the result of a higher portion of clinical laboratory
service revenues coming from the managed services testing contracts
where ADCL also provides and staffs test collection centers, as
these contracts have higher costs associated with them compared
with ADCL’s surveillance testing contracts. The Company saw an
improvement in gross profit percentages for the second quarter of
fiscal 2022 to 40% as compared to 28% for the first quarter of
fiscal 2022. The improvement was the result of the decrease in
COVID-19 positivity rates as sample pooling returned during the
second fiscal quarter, and sample numbers remained at higher
levels.
- Total operating expenses increased to $4.5 million for the
second quarter of fiscal 2022, compared with $4.0 million in the
prior-year quarter and decreased from $5.7 million for the first
quarter of fiscal 2022. The year-over-year increase is primarily
attributable to an increase in payroll of approximately $740
thousand. The increase in total payroll is due to the three months
ended March 31, 2021, having a reversal of an accrual of
approximately $817 thousand for an accrued bonus that was forgiven
by the CEO. The increase was also due to an increase in insurance
expense of approximately $129 thousand, which was primarily the
result of increased Directors and Officers insurance premiums.
These increases were offset by a decrease of approximately $376
thousand and $169 thousand in stock-based compensation and
professional fees, respectively. To a lesser extent, the increase
was attributable to an increase in Research and Development
expenses of $114 thousand.
- Net loss applicable to common stockholders for the second
quarter of fiscal 2022, was $1.8 million, or $0.23 per share,
compared with a net loss of $1.5 million, or $0.21 per share, for
the prior-year quarter.
- Excluding non-cash expenses, Adjusted EBITDA was negative $1.6
million and negative $1.5 million for the second quarters of fiscal
2022 and 2021, respectively. See below for information regarding
non-GAAP measures.
- Cash and cash equivalents stood at $6.5 million on March 31,
2022, compared with $6.6 million as of September 30, 2021. Cash and
cash equivalents include net proceeds of $3.7 million from a
registered direct offering closed on February 24, 2022.
Second Quarter Fiscal 2022 Conference Call
Information
The Company will hold a conference call and webcast to discuss
its second quarter fiscal 2022 financial results today, Thursday,
May 12, 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://services.choruscall.com/mediaframe/webcast.html?webcastid=oxAfF9iN
Telephonic replay (available 1 hour following the conclusion
of the live call through February 17, 2022):
- Participant Toll Free: 1-877-344-7529
- Participant Toll: 1-412-317-0088
- Participant Passcode: 8190790
Presentation slides will also be posted to the ‘Company Events’
sub-page of the Company’s Investor Relations website 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 is commercializing LinearDNA™, its proprietary,
large-scale polymerase chain reaction ("PCR")-based manufacturing
platform that allows for the large-scale cell-free 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 T therapies),
DNA vaccines (anti-viral and cancer), RNA therapies, clustered
regularly interspaced short palindromic repeats (CRISPR) based
therapies, and gene therapies.
The LinearDNA platform also has non-biologic applications, such
as supply chain security, anti-counterfeiting and anti-theft
technology. Key end-markets include textiles, pharmaceuticals and
nutraceuticals, and cannabis, among others.
Leveraging its deep expertise in nucleic acid-based
technologies, the Company has also established safeCircle™, a
high-turnkey solution for population-scale COVID-19 testing.
safeCircle is designed to look for infection within defined
populations or communities utilizing high throughput testing
methodologies that increase testing efficiencies and provide for
rapid turn-around-times.
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.'
Applied DNA is a member of the Russell Microcap® Index.
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, 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 and May 12, 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
March 31,
September 30,
2022
2021
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
6,512,784
$
6,554,948
Accounts receivable, net
2,587,811
2,804,039
Inventories
1,410,952
1,369,933
Prepaid expenses and other current
assets
643,968
568,881
Total current assets
11,155,515
11,297,801
Property and equipment, net
2,628,697
3,023,915
Other assets:
Deposits
95,018
95,040
Total Assets
$
13,879,230
$
14,416,756
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
3,239,701
$
2,991,343
Deferred revenue
393,656
281,000
Total current liabilities
3,633,357
3,272,343
Long term accrued liabilities
31,467
31,467
Common Warrant liability
2,567,900
-
Total liabilities
6,232,724
3,303,810
Commitments and contingencies
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, 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 March 31,
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 March 31,
2022 and September 30, 2021, respectively
-
-
Common stock, par value $0.001 per share;
200,000,000 shares authorized
as of March 31, 2022 and September 30,
2021, 8,234,320 and
7,486,120 shares issued and outstanding as
of March 31, 2022 and September 30, 2021, respectively
8,236
7,488
Additional paid in capital
298,351,897
295,228,272
Accumulated deficit
(290,712,648
)
(284,122,092
)
Applied DNA Sciences, Inc. stockholders’
equity:
7,647,485
11,113,668
Noncontrolling interest
(979
)
(722
)
Total equity
7,646,506
11,112,946
Total liabilities and equity
$
13,879,230
$
14,416,756
APPLIED DNA SCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED
MARCH 31, 2022, AND 2021
(unaudited)
Three Months Ended March 31, Six Months Ended
March 31,
2022
2021
2022
2021
Revenues Product revenues
$
408,351
$
965,110
$
1,234,662
$
1,515,207
Service revenues
248,690
151,552
387,963
444,826
Clinical laboratory service revenues
5,490,242
1,554,880
8,690,364
2,327,650
Total revenues
6,147,283
2,671,542
10,312,989
4,287,683
Cost of product revenues
469,981
367,331
904,910
638,019
Cost of clinical laboratory service revenues
3,188,817
573,237
5,810,456
818,330
Total cost of product and clinical laboratory service revenues
3,658,798
940,568
6,715,366
1,456,349
Gross profit
2,488,485
1,730,974
3,597,623
2,831,334
Operating expenses: Selling, general and administrative
3,412,777
3,091,227
8,074,950
6,400,881
Research and development
1,070,041
955,738
2,150,137
1,719,546
Total operating expenses
4,482,818
4,046,965
10,225,087
8,120,427
LOSS FROM OPERATIONS
(1,994,333
)
(2,315,991
)
(6,627,464
)
(5,289,093
)
Interest income (expense), net
5,540
13,841
5,813
8,403
Loss on extinguishment of debt
-
-
-
(1,774,662
)
Gain on extinguishment of notes payable
-
839,945
-
839,945
Unrealized gain on change in fair value of the Common Warrants
782,500
-
782,500
-
Transaction costs related to warrant liabilities
(391,335
)
-
(391,335
)
-
Other expense, net
(162,169
)
(54,873
)
(250,222
)
(108,733
)
Loss before provision for income taxes
(1,759,797
)
(1,517,078
)
(6,480,708
)
(6,324,140
)
Provision for income taxes
-
-
-
-
NET LOSS
(1,759,797
)
(1,517,078
)
(6,480,708
)
(6,324,140
)
Less: Net loss (income) attributable to noncontrolling
interest
1,112
278
257
(2,216
)
NET LOSS attributable to Applied DNA Sciences, Inc.
(1,758,685
)
(1,516,800
)
(6,480,451
)
(6,326,356
)
Deemed dividend related to warrant modifications
110,105
-
110,105
-
NET LOSS attributable to common stockholders
$
(1,868,790
)
$
(1,516,800
)
$
(6,590,556
)
$
(6,326,356
)
Net loss per share attributable to common stockholders-basic
and diluted
$
(0.23
)
$
(0.21
)
$
(0.85
)
$
(1.00
)
Weighted average shares outstanding- basic and diluted
8,084,680
7,235,031
7,783,747
6,341,590
APPLIED DNA SCIENCES,
INC.
CALCULATION AND RECONCILIATION
OF ADJUSTED EBITDA
(unaudited)
Three Month Period Ended March 31,
2022
2021
Net Loss
$
(1,759,797
)
$
(1,517,078
)
Interest expense (income), net
(5,540
)
(13,841
)
Depreciation and amortization
320,864
199,381
(Gain) Loss on extinguishment of debt
-
(839,945
)
Provision for bad debt
-
19,637
Unrealized gain on change in fair value of Common Warrants
(782,500
)
-
Transaction costs allocated to warrant liabilities
391,335
-
Stock based compensation expense
272,915
649,248
Total adjustments
197,074
14,480
Consolidated Adjusted EBITDA (loss)
$
(1,562,723
)
$
(1,502,598
)
Six Month Period Ended March 31,
2022
2021
Net Loss
$
(6,480,708
)
$
(6,324,140
)
Interest expense (income), net
(5,813
)
(8,403
)
Depreciation and amortization
641,615
296,793
(Gain) Loss on extinguishment of debt
-
934,717
Provision for bad debt
10,000
19,637
Unrealized gain on change in fair value of Common Warrants
(782,500
)
-
Transaction costs allocated to warrant liabilities
391,335
-
Stock based compensation expense
1,972,835
1,220,746
Total adjustments
2,227,472
2,463,490
Consolidated Adjusted EBITDA (loss)
$
(4,253,236
)
$
(3,860,650
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005796/en/
Investor Relations: Sanjay M. Hurry, 917-733-5573,
sanjay.hurry@adnas.com Web: www.adnas.com Twitter:
@APDN
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