Full Press Release Details
Applied DNA Reports 2019 Year End and
Fiscal Fourth Quarter Financial Results
Company to Hold Conference Call and Webcast
Thursday, December 12, 2019 at 4:30 PM ET.
STONY BROOK, N.Y. - December 12 ,
2019 - 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
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
"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 entr e 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."
Full Fiscal Year Financial Highlights:
Fiscal Fourth Quarter
2019 Financial Results:
Select Recent Operational
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.
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.
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
Investor contact: Sanjay M. Hurry, 212-838-3777, LHA
Investor Relations, shurry@lhai.com
Financial Tables Follow
APPLIED DNA SCIENCES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2019 AND 2018
| 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 applicable 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.