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 today announced consolidated financial results for the full fiscal year and quarter ended September 30, 2019.
"In fiscal 2019 total revenues increased 38%, and total operating expenses decreased by 5% as we sharpened our focus on our ability to produce linear DNA at scale for our tagging, diagnostics and preclinical biotherapeutic businesses," said Dr. James A. Hayward, chairman, president and CEO of Applied DNA.
Added Dr. Hayward, "Over the past year we focused on elevating the Company's profile for preclinical biotherapeutics and diagnostic applications. With the Company's unique ability ? approximately 130 patents and patents pending ? to produce large quantities of ultra-pure linear DNA, the Company's linear DNA manufacturing platform is a potential industry disrupter that offers therapeutic developers a replacement to plasmid DNA that we believe is cheaper, faster and easily scalable. Over the past 15 months, we developed a robust pipeline of more than 15 contract research opportunities with top cancer, gene therapy, vaccine and RNA partners, which is already generating initial revenue."
"The recent acquisition of the assets and IP of Vitatex, Inc. gives us a second compelling branch to the linear DNA story that we believe lends itself to the diagnostics, prognostics and therapeutics of invasive circulating tumor cells (iCTC). Within just three months of acquisition, we signed an agreement with Tyme Technologies, Inc. for the supply of our Vita-AssayTM iCTC capture assay and associated services for iCTC detection in their pivotal stage pancreatic cancer clinical trial. In addition, our protocols for obtaining and studying iCTCs in colorectal cancer have recently been approved by an Institutional Review Board."
Continued Dr. Hayward, "Within our product authenticity and traceability solutions segment, our textile business, led by an experienced sales team, broadened awareness and adoption of our CertainT platform. Expanding beyond our relationship with Himatsingka for cotton home textiles, we established a technology partnership that gives us entrée into the cotton apparel market. We continued the global implementation of our tagging platform by completing commercial scale pilots at approximately 20 textile manufacturing sites using varied materials throughout China, Southeast Asia and India. In synthetic textiles, brands and retailers are increasingly relying on materials that offer high performance, sustainability and transparency and the promise of circular manufacturing. Our efforts have yielded strategic alliances that position us alongside key participants along multiple points in the global textile value chain to more broadly drive adoption of our authentication technology platform. We have begun to integrate our CertainT platform to provide end-to-end material traceability to multiple related categories, including leather, wool, down and feather, specialty coatings and additives, recycled PET, viscose, and other synthetics. We believe we are well positioned for uptake by brands and retailers."
Concluded Dr. Hayward, "Looking ahead, we have set our sights on generating top-line growth from our linear DNA manufacturing platform, that should be driven by textiles and cannabis, as well as biotherapeutic and diagnostics, as we begin to convert our business-building activities in fiscal 2019 into pre-commercial and commercial revenues in fiscal 2020. Having recently completed an equity raise, re-established our compliance with the Nasdaq listing requirements, and eliminated our Going Concern opinion, we have our strongest balance sheet in years and the financial resources to support a sustainable growth trajectory."
2019 Full Fiscal Year Financial Highlights:
Fiscal Fourth Quarter 2019 Financial Results:
Select Recent Operational Highlights:
Fiscal Fourth Quarter 2019 Conference Call Information
The Company will hold a conference call and webcast to discuss its fiscal fourth quarter-end 2019 results on Thursday, December 12, 2019 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:
Live webcast: https://services.choruscall.com/links/apdn190808.html
Replay (available 1 hour following the conclusion of the live call through December 19, 2019):
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 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. |
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CONSOLIDATED BALANCE SHEETS |
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SEPTEMBER 30, 2019 AND 2018 |
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|
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September 30, |
|||||
|
|
2019 |
|
|
2018 |
||
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
558,988 |
|
|
$ |
1,659,564 |
Accounts receivable, net of allowance of $4,500 and $13,133 at September 30, 2019 and 2018, respectively |
|
|
839,951 |
|
|
|
1,485,938 |
Inventories |
|
|
142,629 |
|
|
|
221,369 |
Prepaid expenses and other current assets |
|
|
604,740 |
|
|
|
635,174 |
Total current assets |
|
|
2,146,308 |
|
|
|
4,002,045 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
226,221 |
|
|
|
419,774 |
|
|
|
|
|
|
|
|
Other assets: |
|
|
|
|
|
|
|
Deferred offering costs |
|
|
109,698 |
|
|
|
- |
Deposits |
|
|
62,351 |
|
|
|
62,325 |
Goodwill |
|
|
285,386 |
|
|
|
285,386 |
Intangible assets, net |
|
|
734,771 |
|
|
|
864,203 |
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
3,564,735 |
|
|
$ |
5,633,733 |
|
|
|
|
|
|
|
|
LIABILITIES AND (DEFICIT) EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities (including related party of $5,844 at September 30, 2018) |
|
$ |
1,616,997 |
|
|
$ |
965,167 |
Deferred revenue |
|
|
628,993 |
|
|
|
1,856,693 |
Total current liabilities |
|
|
2,245,990 |
|
|
|
2,821,860 |
|
|
|
|
|
|
|
|
Long term accrued liabilities |
|
|
621,970 |
|
|
|
470,739 |
Secured convertible notes payable, net of debt issuance costs (including related party of $1,139,490 at September 30, 2018) |
|
|
1,442,447 |
|
|
|
1,586,631 |
Secured convertible notes payable, net of debt issuance costs, recorded at fair value |
|
|
102,777 |
|
|
|
- |
Total liabilities |
|
|
4,413,234 |
|
|
|
4,879,230 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applied DNA Sciences Inc. Stockholders' (Deficit) Equity: |
|
|
|
|
|
|
|
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of September 30, 2019 and 2018 |
|
|
- |
|
|
|
- |
Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2019 and 2018 |
|
|
- |
|
|
|
- |
Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2019 and 2018 |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
Common stock, par value $0.001 per share; 500,000,000 shares authorized; 1,200,399 and 752,802 shares issued and outstanding as of September 30, 2019 and 2018, respectively |
|
|
1,200 |
|
|
|
753 |
Additional paid in capital |
|
|
255,962,930 |
|
|
|
249,119,833 |
Accumulated deficit |
|
|
(256,805,589 |
) |
|
|
(248,366,083) |
Applied DNA Sciences, Inc. stockholders' (deficit) equity |
|
|
(841,459) |
|
|
|
754,503 |
Noncontolling interest |
|
|
(7,040) |
|
|
|
- |
|
|
|
|
|
|
|
|
Total (deficit) equity |
|
|
(848,499) |
|
|
|
754,503 |
|
|
|
|
|
|
|
|
Total Liabilities and (Deficit) Equity |
|
$ |
3,564,735 |
|
|
$ |
5,633,733 |
APPLIED DNA SCIENCES, INC. |
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
YEARS ENDED SEPTEMBER 30, 2019 AND 2018 |
|||||||
|
|
2019 |
|
|
2018 |
||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues |
|
$ |
2,136,055 |
|
|
$ |
1,827,626 |
Service revenues |
|
|
3,253,034 |
|
|
|
2,075,717 |
|
|
|
|
|
|
|
|
Total revenues |
|
|
5,389,089 |
|
|
|
3,903,343 |
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
877,613 |
|
|
|
1,206,814 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
10,278,045 |
|
|
|
11,043,463 |
Research and development |
|
|
2,967,278 |
|
|
|
2,751,578 |
Depreciation and amortization |
|
|
390,424 |
|
|
|
547,796 |
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
13,635,747 |
|
|
|
14,342,837 |
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
|
(9,124,271) |
|
|
(11,646,308) |
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
Interest (expense) income, net (including related party interest of $46,586 and $5,844 for the years ended September 30, 2019 and 2018, respectively) |
|
|
(162,432 |
) |
|
|
(9,615) |
Other expense, net |
|
|
(43,299 |
) |
|
|
(37,005) |
Loss on extinguishment of debt |
|
|
(1,260,399 |
) |
|
|
- |
Unrealized gain on change in fair value of secured convertible notes payable |
|
|
1,972,955 |
|
|
|
- |
Loss before provision for income taxes |
|
|
(8,617,446) |
|
|
(11,692,928) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
15,000 |
|
|
|
- |
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(8,632,446 |
) |
|
$ |
(11,692,928) |
Less: Net loss attributable to noncontolling interest |
|
|
9,323 |
|
|
|
- |
NET LOSS attributable to Applied DNA Sciences, Inc. |
|
$ |
(8,623,123) |
|
|
$ |
(11,692,928) |
Deemed dividend related to warrant modifications |
|
|
(309,607) |
|
|
|
- |
NET LOSS applicable to common stockholders |
|
$ |
(8,932,730) |
|
|
$ |
(11,692,928) |
Net loss per share attributable to common stockholders-basic and diluted |
|
$ |
(9.69 |
) |
|
$ |
(15.86) |
|
|
|
|
|
|
|
|
Weighted average shares outstanding-basic and diluted |
|
|
921,809 |
|
|
|
737,441 |
APPLIED DNA SCIENCES, INC. |
||||||||
CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA |
||||||||
(unaudited) |
||||||||
|
Three Months Ended September 30, |
Twelve Months Ended September 30, |
||||||
2019 |
2018 |
2019 |
2018 |
|||||
Net Loss |
$ |
(1,224,137) |
$ |
(3,475,282) |
$ |
(8,623,123) |
$ |
(11,692,928) |
Interest expense (income), net |
|
55,226 |
|
9,615 |
|
162,432 |
|
9,615 |
Depreciation and amortization |
|
70,385 |
|
124,452 |
|
390,424 |
|
547,796 |
Loss on extinguishment of debt |
|
1,260,399 |
|
- |
|
1,260,399 |
|
- |
Change in fair value of convertible notes payable |
|
(1,972,955) |
|
- |
|
(1,972,955) |
|
- |
Stock based compensation expense (income) |
|
217,468 |
|
1,171,657 |
|
1,129,110 |
|
1,356,351 |
Income tax expense |
|
15,000 |
|
- |
|
15,000 |
|
- |
Bad debt expense |
|
16,281 |
|
- |
|
7,648 |
|
20,552 |
Total non-cash items |
|
(338,196) |
|
1,305,724 |
|
992,058 |
|
1,934,314 |
Consolidated Adjusted EBITDA (loss) |
$ |
(1,562,333) |
$ |
(2,169,558) |
$ |
(7,631,065) |
$ |
(9,758,614) |
APPLIED DNA SCIENCES, INC. |
||||||||
CUMULATIVE EFFECT ADJUSTMENT AND THE IMPACT ON CURRENT PERIOD FINANCIAL STATEMENTS OF ADOPTING TOPIC 606 |
||||||||
|
Fiscal Year ended September 30, 2019 |
|||||||
|
Prior U.S. GAAP |
|
Topic 606 impact |
|
As reported |
|||
|
|
|
|
|
|
|||
Statement of Operations |
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Product |
$ |
2,902,247 |
|
$ |
(766,192) |
|
$ |
2,136,055 |
Service |
|
3,402,138 |
|
|
(149,104 |
) |
|
3,253,034 |
Total revenues |
|
6,304,385 |
|
|
(915,296 |
) |
|
5,389,089 |
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
884,281 |
|
|
(6,668) |
|
|
877,613 |
Loss from operations |
|
(8,215,643 |
) |
|
(908,628) |
|
(9,124,271) |
|
Assets |
|
|||||||
Prepaids and other current assets |
$ |
611,408 |
|
$ |
(6,668) |
|
$ |
604,740 |
Liabilities and equity |
|
|
|
|
|
|
|
|
Deferred Revenue |
$ |
802,107 |
|
$ |
(173,114) |
$ |
628,993 |
|
Accumulated Deficit |
|
(256,805,589 |
) |
|
- |
|
(256,805,589) |
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