Full Press Release Details
Applied DNA Reports 2020 Fiscal First
Quarter Financial Results
Company to Hold Conference Call and Webcast
Thursday, February 6, 2020 at 4:30 PM ET.
STONY BROOK, N.Y. - February 6,
2020 - 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
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:
Select Recent Operational
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.
Live webcast: https://services.choruscall.com/links/apdn200206.html
Replay (available 1 hour following the conclusion of the
live call through February 7, 2020):
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 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.
Investor contact: Sanjay
M. Hurry, 212-838-3777, LHA Investor Relations, shurry@lhai.com
Financial Tables Follow
APPLIED DNA SCIENCES, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2019 AND September 30, 2019
| 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
| 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
| 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 | ) |