Company to Hold Conference Call and Webcast
Today, Thursday, February 6, 2020 at 4:30 PM ET
Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the
"Company"), a leader in Polymerase Chain Reaction (PCR)-based DNA
manufacturing for product authenticity, traceability solutions and
nucleic acid-based biotherapeutic development and a developer of
liquid biopsies today announced consolidated financial results for
the fiscal first quarter ended December 31, 2019.
“During our fiscal first quarter, we made meaningful progress on
our strategic priorities for fiscal 2020 to position the company
for long-term growth while raising capital to support our growth
strategy. Our revenue performance reflects a difficult comparison
to the year-ago period, which included revenue related to a
Department of Defense contract since completed, as well as our
historical revenue pattern that troughs in the first quarter and
builds over the balance of the year,” stated Dr. James A. Hayward,
president and CEO of Applied DNA.
“In our biotherapeutics business that utilizes our proprietary
linear DNA production platform for application in adoptive cell
therapies; DNA vaccines, such as cancer vaccines; CRISPR and other
nucleic acid-based therapies, we continued to build proof points
for a new paradigm in linear DNA production with our patented PCR
processes ahead of traditional plasmids production. During the
quarter, we signed an agreement with Tyme Technologies for our
Vita-AssayTM invasive Circulating Tumor Cell (iCTC) capture assay
and services that enable Tyme to monitor disease progression in its
pivotal trial for metastatic pancreatic cancer. In our industrials
business that utilizes the same platform to illuminate supply
chains in large commercial ecosystems for authenticity and
traceability, the launch of Colorcon’s on-dose authentication
platform powered by our taggant technology demonstrates execution
of our pharmaceutical strategy to partner with Colorcon who will be
marketing the platform to its expansive customer base. Strategic
progress has continued in this sector into our fiscal second
quarter with our entry into the nutraceuticals market with a
multi-year CertainT contract with Nutrition 21.”
Concluded Dr. Hayward, “Looking ahead, we are placing greater
emphasis on positioning our platform for biotherapeutic and
diagnostic applications where there is a growing imperative for our
capabilities while also nurturing key industrials applications to
commercial-scale deployments. Our recently acquired liquid biopsy
technology – the iCTC liquid biopsy platform - we believe allows us
to detect primary cancer tumors often before they are visible to
other diagnostic technologies, when preventive care for impending
cancer may still be an option. Our iCTC platform is potentially
transformative to cancer care, and our relationship with Tyme
establishes a partnering model that is applicable to other
companies pursuing therapies for such cancers as breast,
pancreatic, ovarian, colorectal, among others, that we are actively
pursuing.”
Fiscal First Quarter 2020 Financial Results:
- Revenues decreased 28% for the first quarter of fiscal 2020 to
$634 thousand, compared with $884 thousand reported in the same
period of the prior fiscal year and decreased 62% from $1.7 million
for the fourth quarter of fiscal 2019. This decrease in revenue
year over year is due to a decrease of $167 thousand in service
revenue and a decrease of $84 thousand in product revenues. The
decrease in service revenues is primarily attributable to a
decrease from a government contract award that ended during fiscal
2019. The decrease in product revenues was primarily related to a
decrease of approximately $200 thousand in textiles, related to a
cotton customer offset by an increase of $135 thousand in
biopharmaceutical revenues.
- Total operating expenses decreased to $3.0 million for the
first fiscal quarter of 2020, compared with $3.9 million in the
prior fiscal year’s first quarter. This decrease is primarily
attributable to an approximate $352 thousand decrease in payroll
and a decrease of $93 thousand in consulting fees, which are both
due to a realignment of the sales force and reductions in overall
headcount. In addition, there was a decrease of $285 thousand in
stock-based compensation expense and a reduction of $145 thousand
in research and development expenses.
- Net loss for the quarter ended December 31, 2019 was $2.7
million, or $1.12 per share, compared with a net loss of $3.2
million, or $4.25 per share, for the quarter ended December 31,
2018, an improvement of 18%, and a net loss of $1.2 million, or
$1.44 per share, for the quarter ended September 30, 2019.
- Excluding non-cash expenses, Adjusted EBITDA was negative $2.4
million and a negative $2.6 million for the quarters ended December
31, 2019 and 2018, respectively. See below for information
regarding non-GAAP measures.
Select Recent Operational Highlights:
- On February 5, 2020, Applied DNA entered into an amendment to
its existing joint development agreement with Takis S.R.L and
Evvivax S.R.L. to include pre-clinical development of a potential
linear DNA vaccine against 2019-nCoV, the new coronavirus;
- On January 27, 2020, Applied DNA bolstered its patent portfolio
when the U.S. Patent and Trademark Office granted it a U.S. patent
that covers methods of tagging man-made cellulosic fibers or
materials during production and later authenticating the fiber or
materials to confirm provenance and/or authenticity. This newly
issued patent extends the Company’s addressable market within
textiles to include cotton, synthetic fibers and materials, and,
now, man-made cellulosic fibers and materials;
- On January 13, 2020, the Company announced a licensing
agreement with LifeSensors, Inc. whereby it will incorporate
LifeSensors’ high expression SUMO-fusion technologies into the
Company’s linear DNA amplicons designed and produced for
therapeutic applications. The Company believes that the
incorporation of the SUMO-fusion technologies into Applied DNA’s
linear amplicons may further optimize protein expression and
deliver yet another strength to linear DNA; and
- On December 23, 2018, Colorcon, Inc. a world leader in the
development and supply of film coating systems and excipients for
pharmaceuticals, formally launched its On-Dose Authentication
capability utilizing the Company’s technology to provide track and
trace functionality for supply chain security. Applied DNA’s
molecular taggants are integrated into Colorcon’s Opadry® film
coating system to significantly reduce the risks associated with
the global problem of counterfeit and falsified medications
entering the supply chain.
Fiscal First Quarter 2020 Conference Call Information
The Company will hold a conference call and webcast to discuss
its fiscal first quarter-end 2020 results on Thursday, February 6,
2020 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, due
to the large number of expected participants, 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/links/apdn200206.html
Replay (available 1 hour following the conclusion of the live
call through February 7, 2020):
- Participant Toll Free: 1-877-344-7529
- Participant Toll: 1-412-317-0088
- Participant Passcode: 10138146
- Webcast replay:
https://services.choruscall.com/links/apdn200206.html
For those investors unable to attend the live call, a copy of
management’s PowerPoint presentation will be available for review
under the ‘Events and Presentations’ section of the company’s
Investor Relations web site:
https://adnas.com/molecular-based-security/investors/
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 a provider of molecular technologies that enable
supply chain security, anti-counterfeiting and anti-theft
technology, product genotyping, and pre-clinical nucleic acid-based
therapeutic drug candidates.
Applied DNA makes life real and safe by providing innovative,
molecular-based technology solutions and services that can help
protect products, brands, entire supply chains, and intellectual
property of companies, governments and consumers from theft,
counterfeiting, fraud and diversion.
Visit adnas.com for more information. Follow us on Twitter and
LinkedIn. Join our mailing list.
Common stock listed on NASDAQ under the symbol ‘APDN’.
Forward-Looking Statements
The statements made by Applied DNA in this press release may be
“forward-looking” in nature within the meaning of 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 our ability to successfully
enter into commercial contracts for the implementation of our
CertainT® platform, the possibility of failure to make timely
payment on its outstanding secured convertible notes and resulting
enforcement by noteholders of remedies on collateral which includes
substantially all of Applied DNA’s assets, the Company’s 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
product candidates will advance further in the preclinical research
or clinical trial process, 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 12, 2019 and our
subsequent quarterly report on Form 10-Q filed on February 6, 2020,
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 to reflect the
occurrence of unanticipated events, unless otherwise required by
law.
Financial Tables Follow
APPLIED DNA SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,2019
September 30,2019 ASSETS
(unaudited) Current assets:
Cash and cash equivalents
$
8,662,853
$
558,988
Accounts receivable, net of allowance of $4,500 at December 31,
2019 and September 30, 2019, respectively
273,969
839,951
Inventories
82,683
142,629
Prepaid expenses and other current assets
618,077
604,740
Total current assets
9,637,582
2,146,308
Property and equipment, net
184,101
226,221
Other assets:
Deferred offering costs
-
109,698
Deposits
62,350
62,351
Goodwill
285,386
285,386
Intangible assets, net
702,412
734,771
Total Assets
$
10,871,831
$
3,564,735
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities: Accounts payable and
accrued liabilities (including related party of $7,559 at December
31, 2019)
$
1,053,554
$
1,616,997
Deferred revenue
455,051
628,993
Total current liabilities
1,508,605
2,245,990
Long term accrued liabilities
659,692
621,970
Secured convertible notes payable,
related party. net of debt issuance costs
1,479,254
1,442,497
Secured convertible notes payable, recorded at fair value
-
102,777
Total liabilities
3,647,551
4,413,234
Commitments and contingencies
Applied DNA Sciences,
Inc. Stockholders’ Equity (Deficit) :
Preferred stock, par value $0.001 per share; 10,000,000 shares
authorized; -0- shares issued and outstanding as of December 31,
2019 and September 30, 2019, respectively
-
-
Series A Preferred stock, par value $0.001 per share; 10,000,000
shares authorized; -0- issued and outstanding as of December 31,
2019 and September 30, 2019, respectively
-
-
Series B Preferred stock, par value $0.001 per share; 10,000,000
shares authorized; -0- issued and outstanding as of December 31,
2019 and September 30, 2019, respectively
-
-
Common stock, par value $0.001 per
share; 500,000,000 shares authorized; 3,485,399 and 1,200,399
shares issued and outstanding as of December 31, 2019 and September
30, 2019, respectively
3,485
1,200
Additional paid in capital
266,699,007
255,962,930
Accumulated deficit
(259,471,142
)
(256,805,589
)
Applied DNA Sciences, Inc. stockholders’ equity (deficit):
7,231,350
(841,459
)
Noncontrolling interest
(7,070
)
(7,040
)
Total equity (deficit)
7,224,280
(848,499
)
Total liabilities and
(deficit) equity
$
10,871,831
$
3,564,735
See
the accompanying notes to the condensed consolidated financial
statements.
APPLIED DNA SCIENCES,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
THREE MONTHS ENDED DECEMBER
31, 2019 AND 2018
(unaudited)
Three Months Ended December
31,
2019
2018
Revenues:
Product
$
237,870
$
321,875
Service
395,649
562,447
Total revenues
633,519
884,322
Cost of revenues
232,031
153,485
Operating expenses:
Selling, general and administrative
2,373,413
3,082,380
Research and development
564,426
709,564
Depreciation and amortization
75,067
135,052
Total operating expenses
3,012,906
3,926,996
LOSS FROM OPERATIONS
(2,611,418
)
(3,196,159
)
Other (expense) income:
Interest (expense) income, net (including related
party of $28,543 and $23,470 for the three month periods ended
December 31, 2019 and 2018, respectively)
(29,091
)
(31,611
)
Other expense, net
(22,232
)
(6,550
)
Loss before provision for income
taxes
(2,662,741
)
(3,234,320
)
Provision for income taxes
-
-
NET LOSS
(2,662,741
)
(3,234,320
)
Less: Net loss attributable to noncontrolling interest
30
-
NET LOSS attributable to Applied DNA Sciences, Inc.
(2,662,711
)
(3,234,320
)
Deemed dividend related to warrant modifications
(2,842
)
-
NET LOSS applicable to common stockholders
(2,665,553
)
(3,234,320
)
Net loss per share applicable to common
stockholders-basic and diluted
$
(1.12
)
$
(4.25
)
Weighted average shares
outstanding-basic and diluted
2,380,564
761,769
APPLIED DNA SCIENCES,
INC.
CALCULATION AND RECONCILIATION
OF ADJUSTED EBITDA
(unaudited)
Three Months Ended December
31,
2019
2018
Net Loss
$
(2,662,711
)
$
(3,234,320
)
Interest expense (income), net
29,091
31,611
Depreciation and amortization
75,067
135,052
Stock based compensation expense
205,490
490,244
Bad debt expense
-
(8,633
)
Total non-cash items
309,648
648,274
Consolidated Adjusted EBITDA (loss)
$
(2,353,063
)
$
(2,586,046
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200206005873/en/
Investors: Sanjay M. Hurry, 212-838-3777, LHA Investor
Relations, shurry@lhai.com Web: www.adnas.com
Twitter: @APDN
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