Revenues Increased 294% Year-Over-Year to $1.7
Million
– Year-To-Date Revenues Increase 270% From Last
Fiscal Year to $6.0 Million –
- Company to Hold Conference Call and Webcast
Today, Thursday, August 12, 2021, at 4:30 PM ET -
Applied DNA Sciences, Inc. (NASDAQ: APDN) (the “Company”), a
leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing
and nucleic acid-based technologies, today announced consolidated
financial results for the three and nine months ended June 30,
2021.
“We delivered excellent year-over-year revenue growth in the
fiscal third quarter while laying the groundwork to secure a
recently awarded COVID-19 testing services contract that has
potential to be the largest contract in the Company’s history,”
said Dr. James A. Hayward, president and CEO of Applied DNA.
“Demand for safeCircle™, our pooled COVID-19 testing program,
experienced a seasonal decline from the fiscal second quarter,
reflecting the start of the summer recess months for our academic
clients and progressively higher vaccination rates and lower
positivity rates in our operating area. Our recent award from the
City University of New York for large-scale turnkey COVID-19
testing services should continue to drive strong year-over-year
revenue growth over the period of the contract.”
Continued Dr. Hayward, “Our operating activities during the
quarter were distinguished by an expansion of our COVID-19
offerings to drive incremental revenue and to drive adoption of
LinearDNA™ as an alternative to plasmids for nucleic acid-based
therapies. Following constructive interactions with the U.S. Food
and Drug Administration (FDA) as part of a preliminary Emergency
Use Authorization application process and the evolving nature of
the pandemic, we revised our Linea™ SARS-CoV-2 Mutation (the “Linea
Mutation Panel”) (formerly SGS™ Mutation Panel) to target three
SARS-CoV-2 mutations (E48K, L452R, N501Y) that have been designated
substitutions (mutations) of therapeutic concern by the Centers for
Disease Control and Prevention.
“Should the FDA grant an EUA for the Linea Mutation Panel, we
believe that it will offer clinical utility to healthcare systems
by enabling precision COVID-19 treatment and commercial utility to
monoclonal antibody manufacturers by better characterizing patients
before treatments. In recent months, several monoclonal antibody
treatments have had their EUA revoked or have demonstrated a
reduction in efficacy on a standalone or in combination with other
treatments due to mutational impact. Use of the Linea Mutation
Panel is tied to our Linea™ COVID-19 Assay Kit to determine
positivity in clinical samples that would drive additional Assay
demand if the EUA is granted for our Mutation Panel. We believe
that an EUA-authorized Linea Mutation Panel will also provide
additional value to our existing COVID-19 testing customers and,
when combined with our Whole Genome Sequencing assets, provide data
of interest to epidemiologists.
“Concurrently, the launch of our veterinary LinearDNA™ COVID-19
vaccine trial and the subsequently reported strong immune response
that the vaccine candidate elicited, further reinforce the value
proposition of LinearDNA, and, longer-term, generates invaluable
preclinical data supporting the eventual application of LinearDNA
to nucleic acid-based therapies in humans.”
Concluded Dr. Hayward, “Looking ahead, the confluence of
increasing positivity rates due to the Delta variant, the
commingling of vaccinated, partially vaccinated, and unvaccinated
individuals, and new mandatory testing requirements for local and
state-level employees in our operating area affirm the need for
ongoing and consistent COVID-19 screening available through
safeCircle. Subject to FDA's evolving EUA request review
priorities, we expect to file shortly our formal request for EUA
for our Linea Mutation Panel. In addition, in the coming weeks we
intend to launch our COVID-19 veterinary vaccine candidate
challenge trial in furtherance of a commercial animal health
opportunity.
“Regarding our supply chain security business, we have cautious
optimism within the cotton supply chains we serve as we approach
the start of the cotton ginning season in the U.S. However, with
Asia-Pacific beset by the Delta variant, man-made fiber
opportunities remain static. With the tailwind of COVID-19 testing
at our back supplemented by continued execution on business
development initiatives, we believe we are laying the foundation
for sustainable growth.”
Fiscal Third Quarter 2021 Financial Highlights:
- Revenues increased 294% for the third quarter of fiscal 2021 to
$1.7 million, compared with $432 thousand reported in the same
period of the prior fiscal year and decreased 36% from $2.7 million
for the second quarter of fiscal 2021. The increase in revenues
year over year was due primarily to an increase in service revenues
of approximately $686 thousand and an increase of $583 thousand in
product revenues. The increase in service revenue was primarily
from revenues derived from our safeCircle™ COVID-19 surveillance
testing. The increase in product revenue was mainly attributable to
an increase in sales of our Linea™ COVID-19 Assay Kit. The decrease
in revenues compared to the second quarter of fiscal 2021 was due
to a decline in our safeCircle™ COVID-19 surveillance testing.
- Total operating expenses increased to $4.5 million for the
third fiscal quarter of 2021, compared with $3.5 million in the
prior fiscal year’s third quarter and decreased from $4.6 million
for the second quarter of fiscal 2021. The year-over-year increase
is primarily attributable to an increase in total payroll of $535
thousand, of which $325 thousand was for staffing of Applied DNA
Clinical Labs, LLC (ADCL). The increase in operating expenses was
also the result of an increase of $148 thousand for supplies and
equipment to operate the ADCL laboratory. The increase also relates
to increases in research and development expenses of $215 thousand
and depreciation and amortization of $186 thousand.
- Net loss applicable to common stockholders for the quarter
ended June 30, 2021, was $3.5 million, or $0.46 per share, compared
with a net loss of $3.3 million, or $0.72 per share, for the
quarter ended June 30, 2020.
- Excluding non-cash expenses, Adjusted EBITDA was negative $2.8
million for both the quarters ended June 30, 2021, and 2020. See
below for information regarding non-GAAP measures.
- Cash and cash equivalents stood at $12.2 million on June 30,
2021, compared to $7.8 million as of September 30, 2020.
Nine-Month Financial Highlights:
- Revenues increased 270% for the first nine-months of fiscal
2021 to $6.0 million, compared with $1.6 million reported in the
same period of the prior fiscal year. The increase in revenues year
over year was due primarily to an increase in service revenues of
approximately $2.7 million and an increase of $1.7 million in
product revenues. The increase in service revenue was primarily
from revenues derived from our safeCircle COVID-19 surveillance
testing. The increase in product revenue was mainly attributable to
an increase in sales of our Linea Assay Kit.
- Total operating expenses increased to $13.5 million for the
first nine-months of fiscal 2021, compared with $9.5 million in the
same period of the prior fiscal year. This increase is primarily
attributable to an increase in payroll of $790 thousand relating to
additional headcount to staff at ADCL. The increase in operating
expenses also related to an increase in stock-based compensation
expense of $834 thousand primarily relating to officer stock option
grants that vested immediately. The increase also relates to
increases in research and development expenses of $570 thousand and
depreciation and amortization of $341 thousand.
- Net loss applicable to common stockholders for the nine-months
ended June 30, 2021, was $9.8 million, or $1.45 per share, compared
with a net loss of $8.9 million, or $2.54 per share, for the first
six months of fiscal 2020.
- Excluding non-cash expenses, Adjusted EBITDA was negative $6.7
million for the first nine months of fiscal 2021, compared to
negative $7.8 million for the same period in the prior fiscal year.
See below for information regarding non-GAAP measures.
Fiscal Third Quarter 2021 Conference Call Information
The Company will hold a conference call and webcast to discuss
its fiscal third quarter-end 2021 results on Thursday, August 12,
2021, 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 webcast: https://services.choruscall.com/mediaframe/webcast.html?webcastid=Bin1qa3n
Telephonic replay (available 1 hour following the conclusion
of the live call through August 19, 2021):
- Participant Toll Free: 1-877-344-7529
- Participant Toll: 1-412-317-0088
- Participant Passcode: 10158254
The webcast and accompanying PowerPoint presentation will be
archived on the ‘IR Calendar and Corporate Presentations’ page
listed under the Investor Relations drop-down menu on the Company’s
website.
About safeCircle™
ADCL’s high throughput pooled testing program, known as
safeCircle™, utilizes frequent, high-sensitivity pooled testing to
help prevent virus spread by quickly identifying infections within
a community, school, or workplace. safeCircle provides rapid
results using real-time PCR (RT-PCR) testing.
Click through to learn more about how safeCircle can help your
community, school, and workplace: safeCircle
About Linea™ COVID-19 Assay Kit and Linea™
SARS-CoV-2 Mutation Panel
The Linea™ COVID-19 Assay Kit is a real-time RT-PCR test
intended for the qualitative detection of nucleic acid from
SARS-CoV-2 in respiratory specimens including anterior nasal swabs,
self-collected at a healthcare location or collected by a
healthcare worker, and nasopharyngeal and oropharyngeal swabs,
mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal
aspirates, and bronchoalveolar lavage (BAL) specimens collected by
a healthcare worker from individuals who are suspected of COVID-19
by their healthcare provider (HCP). The test is also intended for
use with anterior nasal swab specimens that are self-collected in
the presence of an HCP from individuals without symptoms or other
reasons to suspect COVID-19 when tested at least weekly and with no
more than 168 hours between serially collected specimens.
The scope of the Linea™ COVID-19 Assay Kit EUA, as amended, is
expressly limited to use consistent with the Instructions for Use
by authorized laboratories, certified under the Clinical Laboratory
Improvement Amendments of 1988 (CLIA) to perform high complexity
tests. The EUA will be effective until the declaration that
circumstances exist justifying the authorization of the emergency
use of in vitro diagnostics for detection and/or diagnosis of
COVID-19 is terminated or until the EUA’s prior termination or
revocation. The diagnostic kit has not been FDA cleared or
approved, and the EUA’s limited authorization is only for the
detection of nucleic acid from SARS-CoV-2, not for any other
viruses or pathogens.
The Linea™ SARS-CoV-2 Mutation Panel (formally SGS™ Mutation
Panel) (the “Linea Mutation Panel”) is for Research Use Only (RUO)
and shall not be used for clinical diagnostic purposes. The Linea
Mutation Panel has not been approved or authorized to diagnose,
ameliorate and/or detect any disease by any U.S. or international
regulatory authority.
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 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 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
pooled COVID-19 testing program that is grounded in the Company’s
EUA-authorized Linea™ COVID-19 Assay Kit. safeCircle is designed to
look for infection within defined populations or communities
utilizing pooled testing methodologies that increase testing
efficiencies. The Company has also developed and plans to seek
EUA-authorization for its Linea™ SARS-CoV-2 Mutation Panel, an
assay-based panel for the detection of certain SARS-CoV-2 genetic
mutations.
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.’
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 unknown amount of
revenues and profits that will result from any COVID-19 testing
contract (including the testing contract with the City University
of New York), limited market acceptance, the uncertainties inherent
in research and development, future clinical data and analysis,
including whether any of Applied DNA’s or its partner’s diagnostic
or therapeutic candidates will advance further in the preclinical
research or clinical trial process, including receiving clearance
from the U.S. Food and Drug Administration (U.S. 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 U.S. FDA, the USDA
or equivalent foreign regulatory agencies, the unknown outcome of
any applications or requests to U.S. FDA, USDA, equivalent foreign
regulatory agencies and/or the New York State Department of Health,
the unknown limited duration of any Emergency Use Authorization
(EUA) approval from U.S. FDA, changes in guidance promulgated by
the CDC, FDA and/or CMS relating to COVID-19 testing, disruptions
in the supply of raw materials and supplies, the unknown ability to
manufacture the vaccine candidates in large quantities, the fact
that the safety and efficacy of the vaccine candidates has not yet
been established, the unknown ability of the vaccine candidates to
generate revenue or profit for Applied DNA, 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 our Annual Report on Form 10-K filed on December
17, 2020, Quarterly Reports on Form 10-Q filed on February 11,
2021, May 13, 2021, and August 12, 2021 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 or to reflect the occurrence of unanticipated
events, unless otherwise required by law.
APPLIED DNA SCIENCES, INC.
CONSOLIDATED BALANCE SHEETS
June 30,
September 30,
2021
2020
ASSETS
(unaudited)
Current assets: Cash and cash equivalents
$
12,173,443
$
7,786,743
Accounts receivable, net of allowance of $7,438 and $11,968 at June
30, 2021 and September 30, 2020, respectively
737,347
194,319
Inventories
429,116
497,367
Prepaid expenses and other current assets
356,414
599,296
Total current assets
13,696,320
9,077,725
Property and equipment, net
2,576,616
1,277,655
Other assets: Deposits
95,053
95,083
Goodwill
285,386
285,386
Intangible assets, net
536,354
605,330
Total Assets
$
17,189,729
$
11,341,179
LIABILITIES AND EQUITY
Current liabilities: Accounts payable and accrued liabilities
$
1,321,753
$
1,926,427
Promissory notes payable-current portion
-
329,299
Secured convertible notes payable , net of debt issuance costs
-
1,499,116
Deferred revenue
252,807
511,036
Total current liabilities
1,574,560
4,265,878
Long term accrued liabilities
31,467
848,307
Promissory notes payable-long term portion
-
517,488
Total liabilities
1,606,027
5,631,673
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 June 30, 2021 and September 30, 2020,
respectively
-
-
Series A Preferred stock, par value $0.001 per share; 10,000,000
shares authorized; -0- issued and outstanding as of June 30, 2021
and September 30, 2020, respectively
-
-
Series B Preferred stock, par value $0.001 per share; 10,000,000
shares authorized; -0- issued and outstanding as of June 30, 2021
and September 30, 2020, respectively
-
-
Common stock, par value $0.001 per share; 200,000,000 shares
authorized as of June 30, 2021 and September 30, 2020, 7,486,120
and 5,142,779 shares issued and outstanding as of June 30, 2021 and
September 30, 2020, respectively
7,488
5,144
Additional paid in capital
295,191,444
275,548,737
Accumulated deficit
(279,610,999
)
(269,835,650
)
Applied DNA Sciences, Inc. stockholders’ equity:
15,587,933
5,718,231
Noncontrolling interest
(4,231
)
(8,725
)
Total equity
15,583,702
5,709,506
Total liabilities and equity
$
17,189,729
$
11,341,179
APPLIED DNA SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended June 30, Nine Months Ended June 30,
2021
2020
2021
2020
Revenues Product revenues
$
639,637
$
56,911
$
2,154,844
$
492,582
Service revenues
1,060,683
374,605
3,833,159
1,124,926
Total revenues
1,700,320
431,516
5,988,003
1,617,508
Cost of revenues
550,457
154,804
1,149,629
566,417
Operating expenses: Selling, general and administrative
3,239,953
2,589,042
10,298,343
7,247,999
Research and development
1,029,627
814,599
2,652,047
2,082,043
Depreciation and amortization
247,771
61,865
544,564
203,469
Total operating expenses
4,517,351
3,465,506
13,494,954
9,533,511
LOSS FROM OPERATIONS
(3,367,488
)
(3,188,794
)
(8,656,580
)
(8,482,420
)
Interest income (expense), net
3,572
(28,624
)
11,975
(86,811
)
Loss on extinguishment of convertible notes payable
-
-
(1,774,662
)
-
Gain on extinguishment of notes payable
-
-
839,945
-
Other expense, net
(82,799
)
(72,694
)
(191,533
)
(334,527
)
Loss before provision for income taxes
(3,446,715
)
(3,290,112
)
(9,770,855
)
(8,903,758
)
Provision for income taxes
-
-
-
-
NET LOSS
(3,446,715
)
(3,290,112
)
(9,770,855
)
(8,903,758
)
Less: Net (income) loss attributable to noncontrolling
interest
(2,278
)
662
(4,494
)
(528
)
NET LOSS attributable to Applied DNA Sciences, Inc.
(3,448,993
)
(3,289,450
)
(9,775,349
)
(8,904,286
)
Deemed dividend related to warrant modifications
-
-
-
2,842
NET LOSS attributable to common stockholders
$
(3,448,993
)
$
(3,289,450
)
$
(9,775,349
)
$
(8,907,128
)
Net loss per share attributable to common stockholders-basic
and diluted
$
(0.46
)
$
(0.72
)
$
(1.45
)
$
(2.54
)
Weighted average shares outstanding- basic and diluted
7,486,120
4,577,997
6,724,503
3,512,149
APPLIED DNA SCIENCES, INC.
CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA
(unaudited)
Three Month Period Ended June 30, Nine-Month Period Ended June 30,
2021
2020
2021
2020
Net Loss
$
(3,446,715
)
$
(3,290,112
)
$
(9,770,855
)
$
(8,903,758
)
Interest expense (income), net
(3,572
)
28,624
(11,975
)
86,811
Depreciation and amortization
247,771
61,865
544,564
203,469
(Gain) Loss on extinguishment of debt
-
-
934,717
-
Provision for bad debt
(13,392
)
21,880
6,245
21,880
Stock based compensation expense
410,429
364,819
1,631,175
797,577
Total non-cash items
641,236
477,188
3,104,726
1,109,737
Consolidated Adjusted EBITDA (loss)
$
(2,805,479
)
$
(2,812,924
)
$
(6,666,129
)
$
(7,794,021
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210812005752/en/
Investor Relations: Sanjay M. Hurry, 917-733-5573,
sanjay.hurry@adnas.com Web: www.adnas.com Twitter:
@APDN
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