Applied DNA Reports Fiscal First Quarter 2019 Financial Results

February 7, 2019 4:05 PM

Company To Hold Conference Call and Webcast Today, Thursday, February 7, 2019 at 4:30 PM EST.

STONY BROOK, N.Y.--(BUSINESS WIRE)-- Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the "Company"), announced financial results for the fiscal 2019 first quarter ended December 31, 2018.

“Our performance for the quarter reflects a consistent year-over-year foundation to our cotton business and continued execution under our multi-year contracts with the U.S. Department of Defense, as well as further progress made on our joint development agreements with partners in cannabis and pharmaceuticals,” said Dr. James A. Hayward, president and chief executive officer of Applied DNA. “During the quarter we saw the first CertainT®-certifiable synthetics home textiles products committed by retailers, a bellwether milestone for other manufacturers of CertainT synthetics in our pipeline. We also moved to refine our go-to-market and partnering strategy to drive tighter focus on select verticals and geographies.

“In our LineaRx subsidiary, we continued the development of linear DNA for nucleic acid-based therapies that have already shown promising early results in the field of adoptive T-cell therapy and nucleic-acid-based vaccine, and continued sponsored R&D on behalf of contract research customers. LineaRx customers are increasing in number and diversity and we are starting to see greater than typical dollar-value opportunities enter the pipeline,” continued Dr. Hayward. “In addition to its therapeutics work, subsequent to the close of the quarter, the Company received a purchase order in excess of $500,000 for linear DNA in diagnostics to be delivered over the next 12-18 months. We continue to make strong technical progress on our proprietary non-viral, plasmid-free CAR-T platform, with early promising results in the high-throughput transfection of human T-cells with linear DNA.”

“Subsequent to the close of the quarter, we announced two non-binding MOUs to enter the Asian supply chain market in Taiwan: with Sun Chemical Supply Co. Ltd (“Sun Chemical”) that offers us geographic and domain knowledge in selling and supporting textile manufacturers in China and other Asian countries; and with Tex-Ray Industrial Co., Ltd (“Tex-Ray”), a world-leading innovator and supply chain integrator in performance fibers and fabrics that gives us entrée to supply chains spanning three continents and serving global brands. To help shape the go-to-market strategy and business development efforts and to accelerate our sales cycle, we appointed Stephen Birkhold to our Strategic Advisory Board, who brings a long and stellar history in brand management to hone our strategy in this market.

Concluded Dr. Hayward, “In our cannabis and pharmaceutical businesses, we are progressing towards commercialization by putting in place the necessary operational and marketing infrastructure to enable our partners TheraCann and Colorcon to fully engage our respective, joint customer bases. In particular, our TheraCann partnership is positioning us at the forefront of a burgeoning industry, which we believe needs a safe and secure way to manage the legal cannabis supply chain. Our taggant technology is an integral component of TheraCann’s ETCH Biotrace seed-to-sale solution, and we believe we are well positioned to international markets.”

Fiscal First Quarter 2019 Financial Results:

Select Recent Operational Highlights:

1https://www.textiletoday.com.bd/taiwan-showcases-strength-functional-fabric-manufacturing/

Fiscal First Quarter 2019 Conference Call Information

The Company will hold a conference call and webcast to discuss its fiscal first quarter-end 2019 results on Thursday, February 7, 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.

To Participate:

Live webcast: https://services.choruscall.com/links/apdn190207.html

Replay (available 1 hour following the conclusion of the live call through February 9, 2018):

For those investors unable to attend the live call, a copy of the presentation is expected to be posted by end of business on February 8, 2019 and available under the ‘Events and Presentations’ section of the company’s Investor Relations web site: http://adnas.com/adnas_home/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

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 pre-clinical nucleic acid-based therapeutic drug candidates.

Applied DNA makes 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.

Visitadnas.comfor more information. Follow us onTwitterandLinkedIn. Join ourmailing 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 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 and our subsequent quarterly report on Form 10-Q filed on February 7, 2019, and other reports we file with the SEC, which are available atwww.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.

Financial Tables Follow

APPLIED DNA SCIENCES, INC.
CONSOLIDATED BALANCE SHEETS

December 31,
2018

September 30,
2018

ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 3,137,844 $ 1,659,564
Accounts receivable, net 614,764 1,485,938
Inventories 225,289 221,369
Prepaid expenses and other current assets 622,157 635,174
Total current assets 4,600,054 4,002,045
Property and equipment, net 369,130 419,774
Other assets:
Deposits 62,362 62,325
Goodwill 285,386 285,386
Intangible assets, net 831,845 864,203
Total Assets $ 6,148,777 $ 5,633,733
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,357,712 $ 965,167
Deferred revenue 1,375,496 1,856,693
Total current liabilities 2,733,208 2,821,860
Long-term accrued liabilities 508,426 470,739
Secured convertible notes payable 2,141,122 1,586,631

Total liabilities 5,382,756 4,879,230
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 December 31, 2018 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 December 31, 2018 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 December 31, 2018 and September 30, 2018

- -

Common stock, par value $0.001 per share; 500,000,000 shares authorized; 35,612,057 and 30,112,057 shares issued and outstanding as of December 31, 2018 and September 30, 2018, respectively

35,612 30,112
Additional paid in capital 251,837,589 249,090,474
Accumulated deficit (251,107,180 ) (248,366,083 )
Total stockholders’ equity 766,021 754,503
Total Liabilities and Stockholders’ Equity $ 6,148,777 $ 5,633,733
APPLIED DNA SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended December 31,

Three Months Ended
September 30,

2018 2017 2018
Revenues:
Product revenues $321,875 $ 350,133 $ 597,394
Service revenues 562,447 297,544 597,971
Total revenues 884,322 647,677 1,195,365
Cost of revenues 153,485 331,440 250,659
Operating expenses:
Selling, general and administrative 3,082,380 2,593,154 3,568,961
Research and development 709,564 740,067 716,693
Depreciation and amortization 135,052 157,648 124,452
Total operating expenses 3,926,996 3,490,869 4,410,106
LOSS FROM OPERATIONS (3,196,159 ) (3,174,632 ) (3,465,400 )
Other income (expense):
Interest (expense) income, net (31,611 ) - -
Other (expense) income, net (6,550 ) (9,080 ) (9,882 )
Loss before provision for income taxes (3,234,320 ) (3,183,712 ) (3,475,282 )
Provision for income taxes - - -
NET LOSS $ (3,234,320 ) $ (3,183,712 ) $ 3,475,282
Net loss per share-basic and diluted $ (0.11 ) $ (0.12 ) $ (0.12 )
Weighted average shares outstanding- Basic and diluted 30,470,753 26,674,340 30,112,057
APPLIED DNA SCIENCES, INC.
CALCULATION AND RECONCILIATION OF ADJUSTED EBITDA
(unaudited)
Three Months Ended December 31,
2018 2017
Net Loss $ (3,234,320 ) $ (3,183,712 )
Interest expense (income), net 31,611 -
Depreciation and amortization 135,052 157,648
Stock based compensation expense 490,244 231,113
Bad debt expense (8,633 ) -
Total non-cash items 648,274 388,761
Consolidated Adjusted EBITDA (loss) $ (2,586,046 ) $ (2,794,951 )
APPLIED DNA SCIENCES, INC.
CUMULATIVE EFFECT ADJUSTMENT AND THE IMPACT ON CURRENT PERIOD FINANCIAL STATEMENTS OF ADOPTING TOPIC 606
(unaudited)
Three months ended December 31, 2018 (unaudited)
prior U.S. GAAP Topic 606 impact as reported
Statement of Operations
Revenues
Product $ 704,972 $ (383,097

)

$ 321,875
Service 570,075 (7,628

)

562,447
Total revenues 1,275,047 (390,725

)

884,322
Cost of revenues 156,818 (3,333

)

153,485
Loss from operations (2,808,767 ) (387,392 ) (3,196,159 )
Assets
Prepaids and other current assets $ 625,490 $ (3,333

)

$ 622,157
Liabilities and stockholder's equity
Deferred Revenue $ 1,484,964 $ (109,468

)

$ 1,375,496
Accumulated Deficit (251,001,046

)

(106,134

)

(251,107,180

)

Investor: Sanjay M. Hurry, 212-838-3777, LHA Investor Relations, shurry@lhai.com

Media: Susan Forman, Dian Griesel Int’l., 212-825-3210, sforman@dgicomm.com

Web: www.adnas.com

Twitter: @APDN

Source: Applied DNA Sciences, Inc.

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