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Applied DNA Reports Second Quarter Fiscal 2022 Financial Results

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– 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 –

STONY BROOK, N.Y.–(BUSINESS WIRE)–$APDN #LinearDNA—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:

Corporate Updates:

Second Quarter Fiscal 2022 Financial Highlights:

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:

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):

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

)

 

 

Contacts

Investor Relations: Sanjay M. Hurry, 917-733-5573, sanjay.hurry@adnas.com
Web: www.adnas.com
Twitter: @APDN

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