SOURCE: Applied DNA Sciences

Applied DNA Sciences

December 16, 2014 07:00 ET

Applied DNA Sciences Reports Fiscal Year End 2014 Results

Webcast To Be Held Today at 9:00 AM EST

STONY BROOK, NY--(Marketwired - December 16, 2014) - Applied DNA Sciences, Inc. (NASDAQ: APDN) (Twitter: @APDN), a provider of DNA-based anti-counterfeiting technology and product authentication solutions, announced its year-end results of fiscal 2014.

Karol Kain Gray, Chief Financial Officer stated, "This has been an exciting time for the company. We successfully completed a reverse stock split and uplisting to NASDAQ, as well as reported record annual revenues."

Financial Highlights for the Full Year: For the fiscal year ended September 30, 2014, the Company generated record revenue of approximately $2.7 million, a 33.6% increase from fiscal 2013 revenues.

  • Increased revenues were primarily the result of a developmental term sheet for the DNA-marking of industrial plastics, of which $219,250 of the $350,000 term sheet has been recognized, an increase in sales to suppliers of the Defense Logistics Agency of $162,000, and an increase in fiberTyping sales.
  • Operating expenses were $15 million, a $2.8 million or 22.8% increase over fiscal 2013. The increase is primarily attributable to salaries and research and development expenditures related to a number of customer-funded development contracts.
  • Net loss for the fiscal year ended September 30, 2014 decreased by approximately $4.6 million or 26.1% to $13,066,661 from $17,686,472 in the same period in 2013.

Dr. James A. Hayward, President and Chief Executive Officer stated, "Our commercial relationships remain healthy and continue to grow; and our on-going, funded co-development projects with significant partners are approaching commercialization. We believe we are better positioned for growth than ever before, and now, with the added NASDAQ visibility, we have a broader base of current and potential investors."

Dr. Hayward continued, "Given the late date in this quarter, we expect revenues for Q1, which closes on December 31, 2014, to be over $1 million for the first time ever. In addition, steps are being taken to reduce operating costs by up to ten percent during our fiscal year 2015."

Recent Highlights:

  • The Company elected Joseph Ceccoli, Founder, President and CEO of Biocogent, LLC, as a member of its Board of Directors.
  • On December 4, 2014, the Company announced that it has signed an agreement for use of its SigNature® DNA anti-counterfeiting with a fourth Federal Agency. The initial agreement is valued at upwards of $250,000.
  • In October 2014, we completed a 1:60 reverse stock split, and then in November 2014 we began trading on NASDAQ under the ticker symbols APDN and APDNW, and closed on gross proceeds of $9.1 million in an underwritten public offering, of which $4.1 million was used to repurchase the remaining Series B warrants from an earlier financing.
  • Our SigNature DNA mark is being used to protect two European automotive manufacturers against the theft of automotive parts imported into at least one E.U. country. If found, vehicles and their component parts are traceable back to its owner and location, from anywhere on the globe.
  • On August 28, 2014, the Company was awarded a two-year development contract by the Office of the Secretary of Defense on behalf of the Defense Logistics Agency ("DLA") in the amount of $2.97 million. The Rapid Innovation Fund project will develop a single authentication platform -- our SigNature DNA and complementary technologies -- to identify authentic products and deter counterfeits from infiltrating six Department of Defense Federal Supply Groups ("FSGs"). This authentication platform is designed to demonstrate the technical and commercial capability to DNA mark and authenticate with multiple new industry partners. If successful, we believe that implementation at commercial scale will to lead to commercial revenue opportunities.
  • On July 14, 2014, the Company was awarded a Phase II SBIR contract by the U.S. Missile Defense Agency to perform research and development for avoidance of counterfeit parts by expanding the scope and scale of its existing SigNature DNA® technology platform established in its Phase I SBIR contract for Federal Supply Class 5962 electronic components, and by developing an optical reader. The contract provides for monthly payments to us totaling approximately $975,000 over a two-year period.
  • The DLA and U.S. Missile Defense Agency contracts are expected to provide approximately $4 million of revenue over the next two years to the Company. We believe that commercial relations established via the contracts are anticipated to provide revenue well beyond the terms of the current contracts.
  • APDN and a provider of polyolefins signed a term sheet for mutual development and cooperation regarding the supply of markers and related additives for polyolefin products. The contract provides for initial payments to APDN, comprised of development and exclusivity fees. The payment of further installments is dependent on achieving specific performance goals over a defined period of less than one year.
  • We filed a number of new patents this year, continuing to build upon our already strong intellectual property portfolio. We plan on continuing to build our patent and trademark portfolio and on vigorously defending our IP position and prosecute others attempting to infringe on our IP.

Dr. Hayward concluded, "I am confident we will remain on a growth trajectory. Our SigNature DNA platform holds the promise of securing many different industries; and there are many opportunities to cross-sell and up-sell existing customers. "

SEPTEMBER 30, 2014 AND 2013
    September 30,
    2014     2013
Current assets:          
Cash and cash equivalents $ 1,393,132 $ 6,360,301
Accounts receivable, net of allowance of $9,634 and $62,415 at September 30, 2014 and 2013, respectively   834,818     672,638
Prepaid expenses   135,365     174,096
Total current assets   2,363,315     7,207,035
Property, plant and equipment-net of accumulated depreciation of $759,087 and $409,629 at September 30, 2014 and 2013, respectively   576,128     695,995
Other assets:          
Deposits   57,638     51,260
Deferred offering costs   181,104     --
Intangible assets:          
Intellectual property, net of accumulated amortization and impairment of $256,208 and $163,403, as of September 30, 2014 and 2013, respectively   327,872     420,676
Total Assets $ 3,506,057   $ 8,374,966
SEPTEMBER 30, 2014 AND 2013  
    September 30,  
    2014      2013  
Current liabilities:             
Accounts payable and accrued liabilities, including related party accrued interest of $6,597 and $-- at September 30, 2014 and 2013, respectively $ 1,494,759    $ 966,977  
Promissory notes payable, including $1,000,000 with a related party   1,800,000      -  
Deferred revenue   583,362      148,503  
Total current liabilities   3,878,121      1,115,480  
Warrant liability   1,096,412      2,643,449  
Total liabilities   4,974,533      3,758,929  
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 September 30, 2014 and 2013   -      -  
Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2014 and 2013   -      -  
Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- issued and outstanding as of September 30, 2014 and 2013   -      -  
Common stock, par value $0.001 per share; 1,350,000,000 shares authorized; 13,935,954 and 13,108,783 shares issued and outstanding as of September 30, 2014 and 2013, respectively   13,937      13,109  
Additional paid in capital   198,277,859      191,296,539  
Accumulated deficit   (199,760,272 )    (186,693,611 )
Total stockholders' (deficit) equity   (1,468,476 )    4,616,037  
Total Liabilities and Stockholders' (Deficit) Equity $ 3,506,057    $ 8,374,966  
YEARS ENDED SEPTEMBER 30, 2014, 2013 AND 2012  
  For the year ended September 30,  
  2014   2013   2012  
Revenues $2,721,224   $2,036,222   $1,854,694  
Operating expenses:               
Selling, general and administrative  13,249,753    11,198,505    7,615,734  
Research and development  1,300,750    692,480    432,669  
Depreciation and amortization  442,262    321,074    313,940  
Total operating expenses  14,992,765    12,212,059    8,362,343  
LOSS FROM OPERATIONS  (12,271,541 )  (10,175,837 )  (6,507,649 )
Other income (expense):               
Interest income (expense), net (including related party interest of $6,597, $-- and $-- for the years ended September 30, 2014, 2013 and 2012, respectively)  (11,029 )  1,272    (643,063 )
Other income (expense), net  123,914    (3,761 )  -  
Loss on change in fair value of warrant liability  (908,005 )  (7,508,146 )  -  
Loss before provision for income taxes  (13,066,661 )  (17,686,472 )  (7,150,712 )
Income taxes (benefit)  -    -    -  
NET LOSS $(13,066,661 ) $(17,686,472$ )  (7,150,712 )
Net loss per share-basic and diluted $(0.97 ) $(1.51$ )  (0.74 )
Weighted average shares outstanding-basic and diluted  13,515,518    11,730,879    9,601,525  

Webcast Information:

The Company will be hosting a webinar today, December 16, 2014 at 9:00 AM EST. To participate in the webinar, please follow the instructions below:

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About Applied DNA Sciences

APDN is a provider of botanical-DNA based security and authentication 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. SigNature® DNA describes the uncopyable marker that is at the heart of all of our security and authentication solutions. SigNature DNA is at the core of a family of products such as DNAnet®, our anti-theft product, SigNature® T, targeted toward textiles, and digitalDNA®, providing powerful track and trace. All provide a forensic chain of evidence and can be used to prosecute perpetrators.

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 15, 2014, which are available at 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.

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