- Delivers 17% Revenue Growth Q/Q and 101% Y/Y
-
- Cash and Cash Equivalents at $15.2 Million
-
- Company to Hold Conference Call and Webcast
Today, Wednesday, December 14, 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 fourth quarter and fiscal
year ended September 30, 2022.
“Applied DNA delivered four consecutive quarters of
year-over-year revenue increases and a second consecutive record
revenue year in fiscal 2022 while simultaneously executing on our
long-term strategy and vision to build a diversified PCR-based DNA
technologies company in biotechnology, clinical diagnostics, and
supply chain traceability,” stated Dr. James A. Hayward, president
and CEO. “Over the past 12 months, our LineaRx subsidiary generated
volumes of preclinical data to strengthen the case for the
biotherapeutic industry’s adoption of enzymatically-produced linear
DNA (linearDNA™) for the manufacture of genetic medicines, expanded
the menu of molecular diagnostic tests at our Applied DNA Clinical
Labs (“ADCL”) subsidiary, and moved to capitalize on U.S. federal
enforcement of the Uyghur Forced Labor Prevention Act (the “UFLP
Act”) as a driver of broader CertainT® platform adoption by the
textiles industry.
“Strategically, we committed to our biotherapeutics opportunity
as the chief driver of long-term shareholder value while working to
evolve our ADCL and supply chain traceability segments towards
positive cash flow to support the value-creating potential of our
LinearDNA platform,” continued Dr. Hayward. “Operationally, we
undertook a detailed assessment to reduce costs associated with our
largest COVID-19 testing contract, our chief driver of revenue. In
fiscal 2023, we will continue to manage our costs associated with
this contract, while at the same time, working to close sales
opportunities for our to-be-launched pharmacogenetic testing
services. In our supply chain traceability segment, we worked to
educate key policy makers, customers, and enforcement agencies on
CertainT, our textile traceability platform, ahead of the
implementation of the UFLP Act. As enforcement of the UFLP Act is
expected to become ubiquitous at U.S. ports, we believe that
CertainT is well positioned to help customers meet its compliance
requirements.”
Concluded Dr. Hayward, “Our strategic priorities in fiscal 2023
are twofold: first, we are focused on capturing new sales
opportunities and effecting gross margin improvements in our ADCL
and supply chain traceability segments empowered by the
commercialization of our pharmacogenomics (“PGx”) testing platform
and the broader implementation of the UFLP Act, respectively;
second, we are focused on making the necessary investments in our
LinearDNA platform to support the growth of this business segment
from a small-scale CRO to a larger-scale CDMO capable of capturing
promising opportunities in genetic medicines, including the use of
linearDNA IVT templates to produce mRNA therapeutics. Historically,
the gating factor to broader linearDNA adoption has been our lack
of cGMP production capacity which we are moving to remedy over the
course of the fiscal year and expect to culminate in the
establishment of an initial cGMP production capacity by the end of
calendar year 2023.”
Fourth Quarter 2022 Financial Highlights
Total revenues increased 17% to $3.6 million, which included
$2.9 million in clinical laboratory service revenues (COVID-19
testing revenue). This compares with total revenues of $3.0 million
in the prior fiscal year period, which included $1.6 million of
COVID-19 testing revenue.
The year-over-year increase was offset by a decrease in product
revenues of $713 thousand due to a decrease in sales of DNA
concentrate within a textile supply chain, as well a decline in
sales of our molecular diagnostics (MDx) test kits and supplies and
a decrease in service revenue of $70 thousand.
Gross profit was $417 thousand, or 12%, compared to $992
thousand, or 33%, in the prior fiscal year period. The decline in
gross margin was primarily the result of a higher portion of
clinical laboratory service revenues coming from managed services
testing contracts that carry higher costs compared to ADCL's
surveillance testing contracts. To a lesser extent, the decline was
due to product sales mix as product revenues in the prior fiscal
year period included sales of diagnostic test kit and supplies and
DNA concentrate for supply chains serving the textiles industry
that are at a higher gross margin.
Total operating expenses were $4.8 million compared to $5.5
million in the prior fiscal year period, reflecting the absence of
a $822 thousand impairment charge related to goodwill and the
remaining net book value of intangible assets incurred in the prior
fiscal year period and to a lesser extent, decreases in research
and development expenses of $313 thousand. The decrease in
operating expenses was offset by an increase of $420 thousand in
selling, general and administrative expenses attributable to an
increase in insurance expense of approximately $209 thousand and an
increase in bad debt expense of approximately $237 thousand for the
reserve of a customer balance that was deemed to be
uncollectible.
Operating loss was $4.4 million compared to an operating loss of
$4.5 million in the prior fiscal year period.
Excluding non-cash expenses, Adjusted EBITDA was negative $3.4
million compared to negative $3.3 million in the prior fiscal year
period. See below for information regarding non-GAAP measures.
Cash and cash equivalents of $15.2 million at September 30,
2022, include proceeds from a public offering conducted in the
quarter of common stock and two series of warrants for gross
proceeds of $12.0 million, and the exercise of warrants in
connection with this offering for additional net proceeds of $3.7
million.
Fiscal 2022 Financial Highlights
Total revenues increased 101% to $18.2 million, which included
$15.5 million in clinical laboratory service revenues (COVID-19
test revenue). This compares with total revenues of $9.0 million in
the prior fiscal year period, which included $4.8 million of
COVID-19 test revenue.
The year-over-year increase was offset by a decrease in product
revenues of $1.4 million reflecting decreased sales of our MDx test
kits and supplies to an ADCL COVID-19 customer and, to a lesser
extent, a decrease in the sale of DNA concentrate for textiles
supply chains recorded in the prior fiscal year period and a
decrease in service revenues of $179 thousand reflecting research
and developments projects completed in the prior fiscal year
period.
Total operating expenses increased 7% to $19.0 million from
$17.8 million in the prior fiscal year period. The increase is
attributable to an increase in selling, general and administrative
expenses of $2.3 million, offsetting a decrease in research and
development expenses of $238 thousand and the absence of a $822
thousand impairment charge related to goodwill and the remaining
net book value of intangible assets incurred in the prior fiscal
year period.
Operating loss was $14.0 million compared to $13.3 million in
the prior fiscal year period.
Excluding non-cash expenses, Adjusted EBITDA was negative $9.9
million compared to negative $10.1 million in the prior fiscal year
period. See below for information regarding non-GAAP measures.
Warrants balance at September 30, 2022 stood at 7.3 million.
Approximately 2.2 million of these warrants have exercise prices
ranging from $2.80 to $2.84 per warrant share, which, if exercised,
could result in exercise proceeds to the Company of approximately
$6.3 million; 5.1 million of these warrants have an exercise price
of $4.00 per warrant share, which, if exercised, could result in
total exercise proceeds of approximately $20.3 million. Of the 5.1
million warrants, 2.1 million expire in September 2023, which, if
exercised, would total proceeds of $8.4 million.
Fourth Quarter and Full Year Fiscal 2022 Conference Call
Information
The Company will hold a conference call and webcast to discuss
its fourth quarter and fiscal year 2022 financial results on
Wednesday, December 14, 2022, 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 and replay of webcast:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=6mYI8Tbp
Telephonic replay (available 1 hour following the conclusion
of the live call through December 15, 2022):
- Participant Toll Free: 1-877-344-7529
- Participant Toll: 1-412-317-0088
- Participant Passcode: 2738600
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 ticker
symbol ‘APDN,’ and its publicly traded warrants are listed on OTC
under 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, unknown future demand for
its biotherapeutics products and services, the unknown amount of
revenues and profits that will result from any COVID-19 testing
contract, limited market acceptance for its supply chain security
products and services, whether any of Applied DNA’s or its
customers 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 as therapeutic
products from the FDA, the USDA or equivalent foreign regulatory
agencies, the unknown duration of the COVID-19 public health
emergency, 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, 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
14, 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.
CONSOLIDATED BALANCE
SHEETS
September 30,
September 30,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
15,215,285
$
6,554,948
Accounts receivable, net of allowance of
$330,853 and $29,821 at September 30, 2022 and 2021,
respectively
3,067,544
2,804,039
Inventories
602,244
1,369,933
Prepaid expenses and other current
assets
1,058,056
568,881
Total current assets
19,943,129
11,297,801
Property and equipment, net
2,222,988
3,023,915
Other assets:
Deposits
98,997
95,040
Total assets
$
22,265,114
$
14,416,756
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
3,621,751
$
2,991,343
Deferred revenue
563,557
281,000
Total current liabilities
4,185,308
3,272,343
Long term accrued liabilities
31,467
31,467
Common Warrant liability
5,139,400
—
Total liabilities
9,356,175
3,303,810
Commitments and contingencies (Note K)
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 September 30, 2022 and 2021, respectively
—
—
Series A Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; -0- issued and outstanding
as of September 30, 2022 and 2021, respectively
—
—
Series B Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; -0- issued and outstanding
as of September 30, 2022 and 2021, respectively
—
—
Common stock, par value $0.001 per share;
200,000,000 shares authorized as of September 30, 2022 and 2021,
12,908,520 and 7,486,120 shares issued and outstanding as of
September 30, 2022 and 2021, respectively
12,909
7,488
Additional paid in capital
305,399,008
295,228,272
Accumulated deficit
(292,500,088)
(284,122,092)
Applied DNA Sciences, Inc. stockholders’
equity:
12,911,829
11,113,668
Noncontrolling interest
(2,890)
(722)
Total equity
12,908,939
11,112,946
Total liabilities and equity
$
22,265,114
$
14,416,756
APPLIED DNA SCIENCES,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
FOR THE YEARS ENDED SEPTEMBER
30, 2022 AND 2021
2022
2021
Revenues
Product revenues
$
1,882,804
$
3,295,849
Service revenues
759,138
937,735
Clinical laboratory service revenues
15,526,735
4,794,154
Total revenues
18,168,677
9,027,738
Cost of product revenues
2,116,717
1,566,656
Cost of clinical laboratory service
revenues
10,998,320
2,978,176
Total cost of revenues
13,115,037
4,544,832
Gross profit
5,053,640
4,482,906
Operating expenses:
Selling, general and administrative
15,097,360
12,845,372
Research and development
3,926,043
4,164,434
Impairment losses
-
821,741
Total operating expenses
19,023,403
17,831,547
LOSS FROM OPERATIONS
(13,969,763)
(13,348,641)
Interest income, net
7,200
13,675
Loss on extinguishment of convertible
notes payable
—
(1,774,662)
Unrealized gain on change in fair value of
warrants classified as a liability
17,999,521
—
Gain on extinguishment of notes
payable
—
839,945
Transaction costs related to warrant
liabilities
(1,668,112)
—
Loss on issuance of warrants
(10,591,600)
—
Other expense, net
(47,305)
(8,756)
Loss before provision for income taxes
(8,270,059)
(14,278,439)
Provision for income taxes
—
—
NET LOSS
(8,270,059)
(14,278,439)
Less: Net (income) loss attributable to
noncontrolling interest
2,168
(8,003)
NET LOSS attributable to Applied DNA
Sciences, Inc.
(8,267,891)
(14,286,442)
Deemed dividend related to warrant
modifications
110,105
—
NET LOSS attributable to common
stockholders
$
(8,377,996)
$
(14,286,442)
Net loss per share attributable to common
stockholders-basic and diluted
$
(0.93)
$
(2.07)
Weighted average shares outstanding-basic
and diluted
8,967,704
6,916,999
APPLIED DNA SCIENCES,
INC.
CALCULATION AND RECONCILIATION
OF ADJUSTED EBITDA
(unaudited)
Three Month Period Ended
September 30,
2022
2021
Net Loss
$
(664,554
)
$
(4,507,582
)
Interest expense (income), net
(1,387
)
(1,700
)
Depreciation and amortization
327,680
299,874
Provision for bad debt
259,451
7,438
Impairment expense
-
821,741
Unrealized gain on change in fair value of
Common Warrants
(15,458,821
)
-
Transaction costs related to warrant
liabilities
1,276,777
-
Loss on issuance of warrants
10,591,600
-
Stock based compensation expense
272,915
36,828
Total non-cash items
(2,731,785
)
1,164,181
Consolidated Adjusted EBITDA (loss)
$
(3,396,339
)
$
(3,343,401
)
Fiscal Year Ended September
30,
2022
2021
Net Loss
$
(8,270,059
)
$
(14,278,439
)
Interest expense (income), net
(7,200
)
(13,675
)
Depreciation and amortization
1,290,480
844,438
Loss on extinguishment of convertible
notes payable
-
839,945
Provision for bad debt
269,451
28,629
Impairment expense
-
821,741
Unrealized gain on change in fair value of
Common Warrants
(17,999,521
)
-
Transaction costs allocated to warrant
liabilities
1,668,112
-
Loss on issuance of warrants
10,591,600
-
Stock based compensation expense
2,518,665
1,668,003
Total non-cash items
(1,668,414
)
4,189,081
Consolidated Adjusted EBITDA (loss)
$
(9,938,472
)
$
(10,089,358
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221214005935/en/
Investor Relations: Sanjay M. Hurry, 917-733-5573,
sanjay.hurry@adnas.com Web: www.adnas.com Twitter:
@APDN
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