Full Press Release Details
Year End and Fiscal Fourth Quarter Results
Hold Conference Call and Webcast Today,
Thursday, December 28, 2017 at 4:30 PM EST.
BROOK, N.Y. - December 28, 2017 - Applied DNA Sciences, Inc. (NASDAQ: APDN) ("Applied DNA" or the "Company"),
announced financial results for the full fiscal year and quarter ended September 30, 2017.
on Applied DNA's performance for the fiscal year, Dr. James A. Hayward, president and chief executive officer, stated, "Fiscal
2017 did not fulfill our revenue expectations, but nonetheless stands out for the growing validation of our disruptive DNA technology
platform by leading global companies and government agencies, resulting in a broader base of business activity and new revenue
opportunities, and drove our expected annual recurring revenue to increase to over $6.5 million per year. In addition, working
diligently to execute on our growth strategy, we exited the fiscal year with 23 feasibility pilots in our pipeline, an increase
from 14 at the end of the third fiscal quarter, with two of the 23 pilots now commercialized."
fiscal 2018, momentum in business activity is increasing following the recent signing of new strategic partnerships across several
of our key business verticals," continued Dr. Hayward. "Videojet gives us direct line-of-sight into multiple commercial
ecosystems, including enhanced opportunities to tag Federal Supply Classes within the Defense Logistics Agency in which we do
not yet have a presence, and in pharmaceuticals, where the global healthcare industry is moving to comply with federally mandated
regulations, such as the U.S. Drug Supply Chain Security Act (US DSCSA) and the EU's Falsified Medicine Directive (EUFMD),
both of which require serialized pharmaceutical packaging. Our new memorandum of understanding with Colorcon potentially
broadens the applicability of our platform and gives us access to both the pharmaceutical and nutraceutical industries. Similarly,
through our partnership with Rosier S.A. for DNA-tagged fertilizer, we are preparing to enter markets that represent over 60%
of total global fertilizer consumption. Having established a foundation of growing recurring revenues, an expanding pipeline of
pilot projects and with the addition of several new strategic partnerships expected to contribute to revenue in the current year,
we believe we are firmly on a trajectory for growth in fiscal 2018."
Fiscal 2017 Financial Results:
Fourth Quarter Results:
Fourth Quarter Operational Highlights:
is one of the biggest players in the pharmaceutical supply chain ecosystem, bringing their quality film coatings and other excipients
directly into almost all of the large pharmaceutical companies in the world. As part of this licensing collaboration, the
MOU provides for the Company to provide exclusive rights to Colorcon for utilizing its molecular taggant directly in their film
coatings so that customers receive a seamless solution. The Company expects to sign the definitive agreement shortly, for
which it will receive milestone payments, as well as revenue sharing for product sales and authentication services.
Fiscal Fourth Quarter 2017 Conference
The Company will hold a conference
call and webcast to discuss its fiscal fourth quarter and year-end 2017 results on Thursday, December 28, 2017 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.
webcast: https://services.choruscall.com/links/apdn171205.html Replay
(available 1 hour following the conclusion of the live call through December 29, 2017):
For those investors unable to attend
the live call, a copy of the presentation is expected to be posted by end of business on December 28, 2017 and available under
the Presentations' section of the company's Investor Relations web site: http://adnas.com/adnas_home/investors/.
Information about Non-GAAP Financial
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
"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) change in fair value of warrant liability, (ii) the loss on conversion of promissory
notes, (iii) stock-based compensation and (iv) 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 DNA mass production for diagnostics and therapeutics. | |
| We make 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. The proprietary DNA-based CertainT platform can be used to identify, tag, test, and track products, to help assure authenticity, origin, traceability, sustainability and quality of products. |
DNA describes the core technology ingredient that is at the heart of a family of uncopyable, security and authentication
solutions such as SigNature T and fiberTyping , targeted towards textiles and apparel, BackTrac
and DNAnet , for anti-theft and loss prevention, and digitalDNA , providing powerful track-and-trace.
All provide a forensic chain of evidence, and can be used to prosecute perpetrators. Applied DNA Sciences is also engaged in the
large-scale production of specific DNA sequences using the polymerase chain reaction.
Forward-Looking Statements
The statements made by APDN 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 APDN'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 APDN. Actual results could differ materially
from those projected due to our short operating history, limited financial resources, limited market acceptance, market competition
and various other factors detailed from time to time in APDN's SEC reports and filings, including our Annual Report on Form
10-K filed on December 28, 2017, which is available at www.sec.gov. APDN 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, shurry@lhai.com
Media contact: Susan Forman,
Dian Griesel Int'l., 212-825-3210, sforman@dgicomm.com
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,959,781 | $ | 4,479,274 | ||||
| Accounts receivable, net of allowance of $10,000 and $32,965 at September 30, 2017 and 2016, respectively | 2,587,969 | 6,374,895 | ||||||
| Inventories | 326,468 | 297,759 | ||||||
| Prepaid expenses and other current assets | 366,954 | 200,006 | ||||||
| Total current assets | 6,241,172 | 11,351,934 | ||||||
| Property and equipment, net | 523,688 | 792,499 | ||||||
| Other assets: | ||||||||
| Long term accounts receivables | - | 1,535,000 | ||||||
| Deposits | 61,626 | 61,126 | ||||||
| Deferred offering costs | - | 13,986 | ||||||
| Goodwill | 285,386 | 285,386 | ||||||
| Intangible assets, net | 1,042,076 | 1,525,900 | ||||||
| Total Assets | $ | 8,153,948 | $ | 15,565,831 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 944,133 | $ | 2,247,341 | ||||
| Deferred revenue | 351,735 | 1,837,588 | ||||||
| Total current liabilities | 1,295,868 | 4,084,929 | ||||||
| Long term accounts payable | - | 215,500 | ||||||
| Long term deferred revenue | - | 900,000 | ||||||
| Total liabilities | 1,295,868 | 5,200,429 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' Equity | ||||||||
| Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of September 30, 2017 and 2016 | - | - | ||||||
| Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2017 and 2016 | - | - | ||||||
| Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2017 and 2016 | - | - | ||||||
| Common stock, par value $0.001 per share; 500,000,000 shares authorized; 27,377,057 and 24,078,756 shares issued and outstanding as of September 30, 2017 and 2016, respectively | 27,377 | 24,079 | ||||||
| Additional paid in capital | 243,503,858 | 234,158,711 | ||||||
| Accumulated deficit | (236,673,155 | ) | (223,817,388 | ) | ||||
| Total stockholders' equity | 6,858,080 | 10,365,402 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 8,153,948 | $ | 15,565,831 |
STATEMENTS OF OPERATIONS
| Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product revenues | $ | 846,941 | $ | 1,381,168 | 3,733,995 | $ | 2,538,202 | |||||||||
| Service revenues | 298,556 | 254,927 | 1,017,265 | 1,648,225 | ||||||||||||
| Total revenues | 1,145,497 | 1,636,095 | 4,751,260 | 4,186,427 | ||||||||||||
| Cost of revenues | 272,680 | 434,961 | 1,077,232 | 1,170,653 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 2,790,398 | 2,623,150 | 13,324,503 | 10,808,299 | ||||||||||||
| Research and development | 524,746 | 839,238 | 2,282,362 | 3,700,837 | ||||||||||||
| Depreciation and amortization | 400,519 | 148,528 | 887,305 | 706,496 | ||||||||||||
| Total operating expenses | 3,715,663 | 3,610,916 | 16,494,170 | 15,215,632 | ||||||||||||
| LOSS FROM OPERATIONS | (2,842,846 | ) | (2,409,782 | ) | (12,820,142 | ) | (12,199,858 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income (expense), net | - | 1,437 | 2,763 | 11,004 | ||||||||||||
| Other (expense) income, net | (11,832 | ) | (6,731 | ) | (38,388 | ) | 12,875 | |||||||||
| Net loss before provision for income taxes | (2,854,678 | ) | (2,415,076 | ) | (12,855,767 | ) | (12,175,979 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| NET LOSS | $ | (2,854,678 | ) | $ | (2,415,076 | ) | $ | (12,855,767 | ) | $ | (12,175,979 | ) | ||||
| Net loss per share-basic and diluted | $ | (0.10 | ) | $ | (0.10 | ) | $ | (0.49 | ) | $ | (0.51 | ) | ||||
| Weighted average shares outstanding- Basic and diluted | 27,377,057 | 24,078,657 | 26,378,991 | 23,693,096 |
AND RECONCILIATION OF ADJUSTED EBITDA
| Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net Loss | $ | (2,854,678 | ) | $ | (2,415,076 | ) | $ | (12,855,767 | ) | $ | (12,175,979 | ) | ||||
| Interest (income) expense, net | - | (1,437 | ) | (2,763 | ) | (11,004 | ) | |||||||||
| Depreciation and amortization | 400,519 | 148,528 | 887,305 | 706,496 | ||||||||||||
| Stock based compensation expense | 695,005 | 594,656 | 3,257,305 | 2,116,960 | ||||||||||||
| Bad debt expense | 55,752 | 10,577 | 423,920 | 116,824 | ||||||||||||
| Total non-cash items | 1,151,276 | 752,324 | 4,565,767 | 2,929,276 | ||||||||||||
| Consolidated Adjusted EBITDA (loss) | $ | (1,703,402 | ) | $ | (1,662,752 | ) | $ | (8,290,000 | ) | $ | (9,246,703 | ) |