Full Press Release Details
Third Quarter Fiscal 2022 Financial Results
- Clinical Testing Services Drive Revenue Growth of 153% Year-Over-Year to $4.3
- Post-Quarter Close Cash Balance
of $16.8 Million Includes Proceeds from Upsized Public Offering and Warrant Exercises -
- Company to Hold Conference
Call and Webcast Today, August 11, 2022, at 4:30 PM ET -
N.Y. - August 11, 2022 - Applied DNA Sciences, Inc. (NASDAQ: APDN)
("Applied DNA" or the "Company"), a leader in PCR-based DNA technologies, today announced consolidated financial
results for the third quarter of fiscal 2022, ended June 30, 2022. The Company's results are in line with preliminary selected
quarterly results issued in the Company's Form S-1/A filed on August 1, 2022.
"We executed well in the
fiscal third quarter, managing our financial results through COVID-19 testing seasonality inherent to our academia-heavy client base and
the implementation of cost management initiatives to optimize our cost structure and reallocate resources towards our strategic growth
pillars to drive long-term growth," stated Dr. James A. Hayward, president and CEO of Applied DNA. "Revenues increased substantially
year-over-year driven by continued demand for fast, accurate detection of COVID-19 especially considering the high transmissibility of
the new sub-variants. Fiscal management remained a key focus, resulting in a 15% sequential decline in total operating expenses and a
halving of our average monthly cash burn rate since the beginning of this fiscal year. These organizational adjustments underscore our
commitment to our LinearDNA platform's value-creation potential and to sustainable long-term growth.
"Our performance during
the quarter was notable also for the groundwork laid for multiple inflection points over the balance of the current fiscal year and as
we look ahead to fiscal 2023," continued Dr. Hayward. "Notably, we ramped up the positioning of our LinearDNA platform
as an alternative to plasmids (pDNA) to service the growing global demand for DNA for genetic medicines. We have determined that the platform's
near-term opportunity lies in its use as a replacement for pDNA in the manufacture of mRNA therapeutics. To that end, we recently presented
for the first-time key data demonstrating the numerous advantages of using linearDNA to manufacture mRNA at an industry conference. The
industry's receptivity to linearDNA gives us confidence that we are at the right place and at the right time with a cell-free workflow
for mRNA manufacture that is potentially more cost-effective and more scalable than pDNA and, in our view, even outpaces our competition
in certain use cases. We are moving to cultivate linearDNA supply contracts across the mRNA production spectrum, from therapy developers
to contract development and manufacturing organizations.
"At ADCL, we believe the
recent receipt of a 12-month contract extension from the City University of New York (CUNY),our largest client for COVID-19 testing services,
serves as a solid foundation for continued revenue. Having established ADCL's workflow with high-throughput COVID-19 testing and
with its access to the Company's DNA expertise, ADCL can develop molecular diagnostics quickly and, we believe, profitably,"
continued Dr. Hayward. "Our ongoing development of a monkeypox virus test and pharmacogenomics (PGx) panel offers the excellent
potential for uplift in ADCL's profit margin upon commercialization. We are on track to submit the validation package for the monkeypox
test in the coming weeks and anticipate the commercial launch of the PGx panel in early 2023, both contingent on the New York State Department
of Health (NYSDOH) approval as Laboratory Developed Tests (LDTs). Armed with an approved LDT, ADCL can serve as a reference lab to hospital
systems and larger clinical labs in New York State and clinical labs in many other States that accept clinical labs permitted under the
NYSDOH Clinical Laboratory Evaluation Program.
"As for our supply chain
integrity business, we believe the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) on June 21 is driving the industry's
conversations around regulatory compliance towards our CertainT authentication platform following the Federal government's
recognition of isotopic testing and DNA traceability as evidence of compliance with the UFLPA. CertainT's layered, technology-first,
and forensic approach, we believe, makes it ideally suited to enable customers to withstand the rigor of a Customs and Border Protection
inquiry of goods about to enter the U.S. marketplace that can also serve to secure brands' supply chains and backstop their product
claims. We have begun to onboard new CertainT clients for isotopic testing catalyzed by the UFLPA while concurrently pursuing sales opportunities
both domestically and internationally catalyzed by the need to differentiate cottons and production from those under the UFLPA's
Concluded Dr. Hayward, "Subsequent
to the close of the quarter, we closed on an equity offering primarily to fund the further development of our LinearDNA platform and support
the expansion of ADCL's diagnostics offering through commercialization. We are focused on advancing the LinearDNA platform to serve
as the common denominator for the next generation of DNA-based therapies - beyond mRNA to DNA vaccines and gene and cell therapies. We
believe we are well positioned for future growth with a strengthened balance sheet supporting our pivot towards a growing biotherapeutics
Third Quarter Fiscal 2022 Financial Highlights:
Third Quarter Fiscal 2022 Conference Call Information
The Company will hold a conference call and webcast to discuss its
third quarter fiscal 2022 financial results today, Thursday, August 11, 2022, at 4:30 PM ET. To participate in 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.
and Replay of webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=ZseYEdDH
Telephonic replay (available 1 hour following the conclusion of
the live call through August 18, 2022):
slides will also be posted to the "News & Events" section of the Applied DNA website
at https://investors.adnas.com/ and embedded into the live webcast.
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 Sciences is a
biotechnology company developing technologies to produce and detect deoxyribonucleic acid ("DNA"). Using the polymerase chain
reaction ("PCR") to enable both the production and detection of DNA, we operate in three primary business markets: (i) the
manufacture of DNA for use in nucleic acid-based therapeutics; (ii) the detection of DNA in molecular diagnostics testing services; and
(iii) the manufacture and detection of DNA for industrial supply chain security services.
The Company's common stock
is listed on NASDAQ under the ticker symbol 'APDN,' and its publicly traded warrants are listed on OTC under the ticker symbol 'APPDW.'
Forward-Looking Statements
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
substantial doubt about its ability to continue as a going concern, the unknown amount of revenues and profits that will result from
any COVID-19 testing contract, limited market acceptance, future clinical data and analysis, including whether any of Applied
DNA's or its partner's therapeutic candidates will advance further in the preclinical research or clinical trial
process, including receiving clearance from the U.S. Food and Drug Administration (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 FDA, the USDA or equivalent foreign regulatory agencies, the unknown limited duration of any Emergency Use