Full Press Release Details
DNA Reports Fiscal Third Quarter 2019 Financial Results
to Hold Conference Call and Webcast Today,
Tuesday, August 13, 2019 at 4:30 PM EST.
STONY BROOK, N.Y. - August 13,
2019 - Applied DNA Sciences, Inc. (NASDAQ: APDN) ("Applied DNA" or the "Company"), announced consolidated
financial results for the fiscal 2019 third quarter ended June 30, 2019. "Our fiscal third quarter performance reflects our
continuing abilities to monetize our molecular taggant technology and our diagnostic and therapeutic platforms while also realigning
our cost structure and reorienting our sales and business development efforts to support new opportunities," said Dr. James
A. Hayward, chairman, president and CEO of Applied DNA. "Revenues increased over 100% this quarter over the same period last
fiscal year and increased 164% quarter over quarter, supplemented by the receipt of a $1 million cash payment under the terms of
our exclusive licensing agreement with TheraCann International Benchmark Corporation (TheraCann)."
of the quarter we received a written delisting notice from Nasdaq regarding our non-compliance with the requirements for a $1.00
bid price and $35 million market value of listed securities. We are diligently working to comply with all applicable requirements
for continued listing on Nasdaq and we intend to submit a plan to that effect to the NASDAQ Hearings Panel as part of the hearing
process," continued Dr. Hayward. "As part of our plan, we secured a non-binding term sheet from TheraCann for the outstanding
$4 million balance under our licensing agreement in the form of $4 million in convertible preferred stock as well as an incremental
$1 million convertible note. We also raised $1.5 million through a convertible note offering, which increases our current convertible
notes outstanding to approximately $3.7 million. If any portion of these notes were to convert into common stock, it would increase
our equity as a further step towards facilitating Nasdaq compliance. We are engaged in Nasdaq's appeal process, and I am
pleased to report that we have secured a hearing for September 19, 2019 that allows us additional time to execute on the balance
of our plan. However, we can not provide assurance that we will be successful in our NASDAQ appeal."
Dr. Hayward, "As we projected last quarter, our growth is coming from cannabis, textiles and biotherapeutics. Looking ahead,
we remain focused on growth supported by these business verticals. TheraCann's ETCHTM BioTrace solution powered
by our tagging platform is attracting the attention of large cannabis players. We will soon launch our CertainT
brand into the cotton apparel market. Initial product from our recently
completed tagging program for Egyptian cotton is being used to build demand among brands and manufacturers. Our LineaRx subsidiary
is increasingly being viewed within the biotech industry as a cleaner, higher-performing alternative to plasmid DNA production
that is converting to increased order-flow. We have a burgeoning pipeline and growing scientific and intellectual property assets
following the recent acquisition by LineaRx of the assets and IP of Vitatex, Inc. that further broaden our platform's applicability
in the potentially high-reward cancer diagnostic and therapeutic spaces. Just last week we submitted to the NIH our application
for a 3-year, approximately $4 million SBIR Phase IIb grant to be matched with funding being sought from commercial 3rd parties,
that, if granted, will fund the full commercialization of the Vitatex platform for early detection of non-hematologic cancers."
Fiscal Third Quarter
2019 Financial Results:
Financial Highlights:
Fiscal Third Quarter 2019 Conference Call Information
The Company will hold a conference call and webcast to discuss
its fiscal third quarter-end 2019 results on Tuesday, August 13, 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 August 21, 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
Join our mailing list.
Common stock listed on NASDAQ under the symbol APDN, and warrants
are listed under the symbol APDNW.
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 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, 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, including receiving clearance from the U.S. Food and
Drug Administration 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 or equivalent foreign regulatory agencies, shifting enforcement priorities of US
federal laws relating to cannabis, ability to maintain its NASDAQ listing in light of delisting notices received 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 18, 2018, as amended, and our subsequent quarterly reports on Form 10-Q filed on February 7, 2019, May 9, 2019 and
August 13, 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.
Investor contact: Sanjay
M. Hurry, 212-838-3777, LHA Investor Relations, shurry@lhai.com
Media contact: Susan
Forman, Dian Griesel Int'l., 212-825-3210, sforman@dgicomm.com
Financial Tables Follow
APPLIED DNA SCIENCES, INC.
CONSOLIDATED BALANCE SHEETS
| June 30, 2019 | September 30, 2018 | |||||||
| ASSETS | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 507,146 | $ | 1,659,564 | ||||
| Accounts receivable, net | 243,557 | 1,485,938 | ||||||
| Inventories | 309,746 | 221,369 | ||||||
| Prepaid expenses and other current assets | 544,509 | 635,174 | ||||||
| Total current assets | 1,604,958 | 4,002,045 | ||||||
| Property and equipment, net | 265,295 | 419,774 | ||||||
| Other assets: | ||||||||
| Deposits | 62,375 | 62,325 | ||||||
| Goodwill | 285,386 | 285,386 | ||||||
| Intangible assets, net | 767,129 | 864,203 | ||||||
| Total Assets | $ | 2,985,143 | $ | 5,633,733 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 1,171,172 | $ | 965,167 | ||||
| Deferred revenue | 802,585 | 1,856,693 | ||||||
| Total current liabilities | 1,973,757 | 2,821,860 | ||||||
| Long-term accrued liabilities | 584,246 | 470,739 | ||||||
| Secured convertible notes payable | 2,215,668 | 1,586,631 | ||||||
| Total liabilities | 4,773,671 | 4,879,230 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' (Deficit) Equity | ||||||||
| Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of June 30, 2019 and September 30, 2018 | - | - | ||||||
| Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of June 30, 2019 and September 30, 2018 | - | - | ||||||
| Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of June 30, 2019 and September 30, 2018 | - | - | ||||||
| Common stock, par value $0.001 per share; 500,000,000 shares authorized; 38,327,057 and 30,112,057 shares issued and outstanding as of June 30, 2019 and September 30, 2018, respectively | 38,327 | 30,112 | ||||||
| Additional paid in capital | 253,444,993 | 249,090,474 | ||||||
| Accumulated deficit | (255,271,848 | ) | (248,366,083 | ) | ||||
| Total stockholders' (deficit) equity | (1,788,528 | ) | 754,503 | |||||
| Total Liabilities and Stockholders' (Deficit) Equity | $ | 2,985,143 | $ | 5,633,733 |
APPLIED DNA SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product revenues | $ | 392,599 | $ | 393,758 | $ | 885,736 | $ | 1,230,232 | ||||||||
| Service revenues | 1,660,858 | 622,597 | 2,830,511 | 1,477,746 | ||||||||||||
| Total revenues | 2,053,457 | 1,016,355 | 3,716,247 | 2,707,978 | ||||||||||||
| Cost of revenues | 270,883 | 252,562 | 557,508 | 956,155 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 2,407,223 | 2,882,158 | 8,018,516 | 7,471,917 | ||||||||||||
| Research and development | 719,668 | 625,006 | 2,080,610 | 2,034,886 | ||||||||||||
| Depreciation and amortization | 87,315 | 122,999 | 320,039 | 425,927 | ||||||||||||
| Total operating expenses | 3,214,206 | 3,630,163 | 10,419,165 | 9,932,730 | ||||||||||||
| LOSS FROM OPERATIONS | (1,431,632 | ) | (2,866,370 | ) | (7,260,426 | ) | (8,180,907 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest (expense) income, net | (38,177 | ) | - | (107,206 | ) | - | ||||||||||
| Other expense | (8,102 | ) | (21,353 | ) | (31,356 | ) | (36,738 | ) | ||||||||
| Loss before provision for income taxes | ||||||||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| NET LOSS | $ | (1,477,911 | ) | $ | (2,887,723 | ) | $ | (7,398,988 | ) | $ | (8,217,645 | ) | ||||
| Net loss per share-basic and diluted | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.21 | ) | $ | (0.28 | ) | ||||
| Weighted average shares outstanding- | ||||||||||||||||
| Basic and diluted | 38,113,391 | 30,112,057 | 34,970,862 | 29,290,555 |
APPLIED DNA SCIENCES, INC.
CALCULATION AND RECONCILIATION OF ADJUSTED
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Net Loss | $ | (1,477,911 | ) | $ | (2,887,723 | ) | $ | (7,398,988 | ) | $ | (8,217,645 | ) | ||||
| Interest expense (income), net | 38,177 | - | 107,206 | - | ||||||||||||
| Depreciation and amortization | 87,315 | 122,999 | 320,039 | 425,927 | ||||||||||||
| Stock based compensation expense (income) | 154,304 | 238,738 | 911,642 | 184,806 | ||||||||||||
| Bad debt expense | - | 3,434 | (8,633 | ) | 20,552 | |||||||||||
| Total non-cash items | 279,796 | 365,171 | 1,330,254 | 631,285 | ||||||||||||
| Consolidated Adjusted EBITDA (loss) | $ | (1,198,115 | ) | $ | (2,522,552 | ) | $ | (6,068,734 | ) | $ | (7,586,360 | ) |
APPLIED DNA SCIENCES, INC.
CUMULATIVE EFFECT ADJUSTMENT AND THE