Applied DNA Sciences, Inc. (NASDAQ:APDN) Q2 2023 Earnings Conference Call May 12, 2023 4:30 PM ET Company Participants Sanjay Hurry - Head of Investor Relations Beth Jantzen - Chief Financial Officer James Hayward - Chairman, President and Chief Executive Officer Conference Call Participants Jason McCarthy - Maxim Group Yi Chen - H.C. Wainwright & Co., LLC Operator Hello and welcome to the Applied DNA Sciences Fiscal Second Quarter 2023 Financial Results. All parties will be in listen-only mode. [Operator I ...

[Part I - Financial Information](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1 - Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201%20-%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Unaudited financials for March 31, 2023, show decreased assets and equity, with revenue declines from reduced COVID-19 testing demand [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets decreased to **$19.2 million** from **$22.3 million** at September 30, 2022, primarily due to reduced cash, while total equity declined Condensed Consolidated Balance Sheet Highlights (in USD) | Metric | March 31, 2023 (unaudited) | September 30, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $12,287,228 | $15,215,285 | | Total current assets | $15,379,553 | $19,943,129 | | Total assets | $19,175,477 | $22,265,114 | | **Liabilities & Equity** | | | | Total current liabilities | $3,655,378 | $4,185,308 | | Total liabilities | $9,207,256 | $9,356,175 | | Total equity | $9,968,221 | $12,908,939 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2023, revenues decreased to **$4.4 million**, with a net income of **$0.55 million** due to a non-cash gain, while the six-month net loss narrowed to **$3.3 million** Statements of Operations Summary (Three Months Ended March 31, in USD) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $4,407,614 | $6,147,283 | -28.3% | | Gross Profit | $1,807,435 | $2,488,485 | -27.4% | | Loss from Operations | ($2,704,024) | ($2,154,236) | +25.5% | | Net Income (Loss) | $551,176 | ($1,759,797) | N/A | | Diluted EPS | $0.05 | ($0.23) | N/A | Statements of Operations Summary (Six Months Ended March 31, in USD) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $9,670,366 | $10,312,989 | -6.2% | | Gross Profit | $4,185,118 | $3,597,623 | +16.3% | | Loss from Operations | ($3,923,002) | ($6,860,813) | -42.8% | | Net Loss | ($3,293,070) | ($6,480,708) | -49.2% | | Diluted EPS | ($0.25) | ($0.85) | N/A | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended March 31, 2023, net cash used in operating activities improved to **$2.2 million**, with no financing activities, resulting in a **$2.2 million** decrease in cash Cash Flow Summary (Six Months Ended March 31, in USD) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,168,718) | ($3,963,780) | | Net cash used in investing activities | ($9,339) | ($170,217) | | Net cash provided by financing activities | $0 | $4,091,833 | | **Net decrease in cash** | **($2,178,057)** | **($42,164)** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business structure and financial condition, highlighting going concern, significant customer concentration, and segment profitability where only MDx Testing Services is profitable - The company operates in three primary markets: Therapeutic DNA Production Services, MDx Testing Services (including COVID-19 testing), and DNA Tagging and Security Products[21](index=21&type=chunk) - The company faces significant liquidity risk due to recurring net losses and an accumulated deficit of **$295.8 million**. A market decrease in COVID-19 testing demand and the termination of its contract with CUNY (its largest customer) by June 30, 2023, are expected to result in significantly lower revenues[25](index=25&type=chunk)[28](index=28&type=chunk) - For the three months ended March 31, 2023, two customers within the MDx Testing Services segment accounted for an aggregate of **85%** of total revenues[52](index=52&type=chunk) Segment Operating Income (Loss) (Three Months Ended March 31, 2023, in USD) | Segment | Operating Income (Loss) | | :--- | :--- | | Therapeutic DNA Production | ($1,054,123) | | MDx Testing Services | $492,288 | | DNA Tagging and Security | ($914,736) | [Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202%20-%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic focus on Therapeutic DNA Production, anticipating significant revenue decline from MDx Testing due to CUNY contract termination [Business Overview and Strategy](index=31&type=section&id=Business%20Overview%20and%20Strategy) The company focuses its growth strategy on Therapeutic DNA Production Services, while anticipating a significant revenue downturn in MDx Testing due to the CUNY contract termination, which represented **58%** of fiscal 2022 revenues - The company's current growth strategy is to primarily focus resources on the further development and commercialization of its Therapeutic DNA Production Services[114](index=114&type=chunk) - The company anticipates significantly lower revenues from its safeCircle COVID-19 testing solutions due to a market decrease in demand and the termination of its contract with CUNY, its largest customer[128](index=128&type=chunk) - The CUNY COVID-19 contract represented **58%** of the company's revenues for fiscal 2022[128](index=128&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) For the three months ended March 31, 2023, revenues fell **27%** year-over-year, while six-month gross profit margin improved to **43%** and SG&A expenses decreased by **26%** - Three-month revenue decreased by **27%** YoY, primarily due to a **$1.5 million (28%)** decrease in clinical laboratory service revenues from lower demand for COVID-19 testing[140](index=140&type=chunk) - Six-month gross profit percentage increased to **43%** from **35%** in the prior year, mainly from improved margins on MDx testing services due to cost management efforts[151](index=151&type=chunk) - Six-month SG&A expenses decreased by **$2.2 million (26%)**, primarily due to a **$1.6 million** reduction in stock-based compensation expense[152](index=152&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company had **$11.7 million** in working capital, used **$2.2 million** in cash for operating activities, and estimates sufficient cash for the next twelve months - The company had working capital of **$11,724,175** as of March 31, 2023, and used **$2,168,718** in cash for operating activities in the six-month period[159](index=159&type=chunk) - Management estimates that the company will have sufficient cash and cash equivalents to fund operations for the next twelve months from the filing date of this report[161](index=161&type=chunk) - The company warns that if revenues are insufficient to cover operating expenses and additional financing is not obtained, it will likely be forced to reduce operations[162](index=162&type=chunk) [Item 3 - Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company is a smaller reporting company and has elected to use scaled disclosure requirements - The company, as a smaller reporting company, has elected scaled disclosure and is not required to provide information for this item[176](index=176&type=chunk) [Item 4 - Controls and Procedures](index=47&type=section&id=Item%204%20-%20Controls%20and%20Procedures) As of March 31, 2023, disclosure controls were deemed ineffective due to a material weakness in accounting for complex financial instruments, with a remediation plan underway - The CEO and CFO concluded that as of March 31, 2023, disclosure controls and procedures were not effective[177](index=177&type=chunk) - The ineffectiveness is due to a material weakness in internal control over financial reporting concerning the accounting for complex financial instruments (warrants) and the related tax impact[179](index=179&type=chunk) - A remediation plan is being implemented to improve the review process for complex financial instruments, involving both internal personnel and third-party professionals[180](index=180&type=chunk) [Part II - Other Information](index=49&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1 – Legal Proceedings](index=49&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company reports no legal proceedings during the period - There are no legal proceedings to report[183](index=183&type=chunk) [Item 1A – Risk Factors](index=49&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) The company highlights a new risk regarding potential FDA regulation of its pharmacogenetic testing services, which could disrupt business and revenue streams - A key risk highlighted is the potential for the FDA to regulate the company's pharmacogenetic tests, which are currently offered as Laboratory-Developed Tests (LDTs). This could disrupt the business and impact revenues from this service[184](index=184&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[185](index=185&type=chunk) [Item 6 – Exhibits](index=50&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including lease agreements, officer certifications, and XBRL data files - Lists exhibits filed with the report, such as amended lease agreements, officer certifications, and interactive data files[186](index=186&type=chunk)[187](index=187&type=chunk)

Applied DNA Sciences, Inc. (NASDAQ:APDN) Q1 2023 Earnings Conference Call February 9, 2023 4:30 PM ET Company Participants Sanjay Hurry - Investor Relations Beth Jantzen - Chief Financial Officer James Hayward - Chairman, President and Chief Executive Officer Clay Shorrock - Chief Legal Officer and Executive Director of Business Development Conference Call Participants Jason McCarthy - Maxim Group LLC Yi Chen - H.C. Wainwright & Co, LLC Operator Good afternoon, and welcome to the Applied DNA Sciences’ First ...

First Quarter Fiscal 2023 Financial Results 9 February 2023 Nasdaq: APDN ©2023 Applied DNA Sciences, Inc. Safe Harbor Statement The statements made by Applied DNA in this presentation 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 base ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value APDN The Nasdaq Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to C ...

Applied DNA Sciences, Inc. (NASDAQ:APDN) Q4 2022 Earnings Conference Call December 14, 2022 4:30 PM ET Company Participants Sanjay Hurry - Investor Relations Beth Jantzen - Chief Financial Officer James Hayward - Chairman, President and Chief Executive Officer Conference Call Participants Yi Chen - H.C. Wainwright & Co, LLC Jason McCarthy - Maxim Group LLC Operator Good afternoon, and welcome to the Applied DNA Sciences Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. All participants ...

[Part I](index=7&type=section&id=PART%20I) [Business](index=7&type=section&id=ITEM%201.%20BUSINESS) Applied DNA Sciences operates in Therapeutic DNA Production, MDx Testing, and DNA Tagging segments, focusing growth on its linearDNA platform for nucleic acid therapies and veterinary health - The company operates in three primary business segments: Therapeutic DNA Production Services, MDx (Molecular Diagnostics) Testing Services, and DNA Tagging and Security Products and Services[16](index=16&type=chunk) - The company's growth strategy is to primarily focus resources on the development and commercialization of its Therapeutic DNA Production Services, including expanding its CDMO operations and developing veterinary health product candidates[17](index=17&type=chunk) Research and Development Expenses | Fiscal Year | R&D Expenses (Approx.) | | :--- | :--- | | 2022 | $3.9 million | | 2021 | $4.2 million | [Therapeutic DNA Production Services](index=7&type=section&id=Therapeutic%20DNA%20Production%20Services) This segment, through LinearRx, focuses on the linearDNA platform for cell-free synthetic DNA manufacturing, targeting nucleic acid-based therapies and veterinary health with a cGMP facility planned for 2023 - The linearDNA platform is an enzymatic, cell-free manufacturing process for synthetic DNA, positioned as an alternative to traditional plasmid-based methods[20](index=20&type=chunk) - Key advantages of the linearDNA platform are cited as speed, scalability, purity (no antibiotic resistance genes), simplicity, and flexibility in producing complex DNA sequences[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company is in the design phase for a cGMP manufacturing facility, with manufacturing expected to begin in the second half of calendar 2023 to meet requirements for direct clinical use of linearDNA[26](index=26&type=chunk) - The company is developing a therapeutic DNA vaccine candidate for canine lymphoma, licensed from Takis S.R.L and EvviVax, S.R.L., leveraging the linearDNA platform[28](index=28&type=chunk) [MDx Testing Services](index=10&type=section&id=MDx%20Testing%20Services) Through its CLIA-certified subsidiary ADCL, the company provides clinical molecular diagnostics, primarily COVID-19 testing, with a future strategy to shift towards high-complexity, high-value tests like pharmacogenetics - The safeCircle™ service provides large-scale COVID-19 testing using a high-throughput, robotically-pooled RT-PCR workflow, with results typically returned in 24-48 hours[30](index=30&type=chunk) - The company is validating pharmacogenetics (PGx) testing services, designed to analyze over 35 genes to guide drug therapy decisions in areas like cardiology, mental health, and pain management[32](index=32&type=chunk) - The business strategy is to evolve into a clinical reference laboratory, focusing on high-complexity MDx testing services to leverage PCR expertise and target a national customer base[33](index=33&type=chunk) [DNA Tagging and Security Products and Services](index=11&type=section&id=DNA%20Tagging%20and%20Security%20Products%20and%20Services) This segment offers supply chain security solutions via the CertainT® platform, using DNA tags and portable readers for authentication, with significant application in cotton tracking and potential growth from UFLPA regulations - The CertainT® platform uses non-biologic DNA tags (SigNature®) and portable readers (SigNify®) to authenticate goods and ensure supply chain integrity[35](index=35&type=chunk)[36](index=36&type=chunk) - The largest commercial application is in the cotton industry, with tagged products sold at retailers like Costco® and Bed Bath & Beyond®[37](index=37&type=chunk) - The Uyghur Forced Labor Prevention Act (UFLPA) is identified as a potential driver for increased demand, as its implementation strategy lists DNA tagging as evidence importers can use to prove goods did not originate from forced labor in the XUAR region of China[38](index=38&type=chunk) [Customer Concentration](index=16&type=section&id=Customer%20Concentration) The company faces significant customer concentration risk, with one MDx Testing Services customer accounting for 58% of fiscal year 2022 revenues and two customers representing 89% of accounts receivable Customer Concentration Analysis | Metric | Fiscal Year 2022 | Fiscal Year 2021 | | :--- | :--- | :--- | | **Revenue Concentration** | 58% from one customer | 18% and 13% from two customers | | **Accounts Receivable Concentration** | 89% from two customers | 67% from two customers | [Intellectual Property](index=18&type=section&id=Intellectual%20Property) The company protects its technology through patents, trade secrets, and trademarks, with the largest patent portfolio in DNA Tagging and Security, while Therapeutic DNA Production Services is an earlier-stage portfolio Patent Portfolio as of December 9, 2022 | Business Segment | U.S. Patents (Issued/Pending) | Foreign Patents (Issued/Pending) | | :--- | :--- | :--- | | Therapeutic DNA Production | 5 / 10 | 11 / 5 | | MDx Testing Services | 5 / 1 | 4 / 1 | | DNA Tagging & Security | 28 / 5 | 47 / 14 | [Government Regulation](index=20&type=section&id=Government%20Regulation) The company's operations are subject to extensive government regulation, including FDA and USDA for therapeutic products, and CLIA/NYSDOH for MDx testing services, with potential future changes to LDT regulation - The demand for linearDNA is partly dependent on customers' ability to obtain FDA approval for drugs or biologics using the technology, a process involving IND applications, clinical trials, and NDAs or BLAs[60](index=60&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) - Veterinary products, such as the company's planned canine lymphoma vaccine, are regulated by the USDA's Center for Veterinary Biologics and must be shown to be pure, safe, and effective[67](index=67&type=chunk)[80](index=80&type=chunk) - The company's clinical laboratory (ADCL) is CLIA-certified and NYSDOH-permitted. Its diagnostic tests are LDTs, which are currently under FDA enforcement discretion, but could face stricter regulation in the future (e.g., via the VALID Act)[59](index=59&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) [Risk Factors](index=31&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces numerous risks, including limited revenue, potential dilution from financing, a material weakness in internal controls, customer concentration, and the obsolescence of COVID-19 testing services - The company has a history of limited revenue, making future prospects difficult to evaluate[97](index=97&type=chunk)[105](index=105&type=chunk) - A material weakness in internal control over financial reporting has been identified, specifically concerning the accounting for complex financial instruments like warrants[97](index=97&type=chunk)[119](index=119&type=chunk) - Significant customer concentration risk exists, with one customer accounting for **58% of revenue in FY2022**[97](index=97&type=chunk)[120](index=120&type=chunk) - The company's COVID-19 testing services could become obsolete due to the end of the pandemic or the development of widespread vaccines, diminishing its utility[100](index=100&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Failure to comply with Nasdaq's continued listing standards, such as the **$1.00 minimum bid price**, could result in delisting[103](index=103&type=chunk)[224](index=224&type=chunk) [Properties](index=66&type=section&id=ITEM%202.%20PROPERTIES) The company's corporate headquarters and main laboratory facilities are located in a 30,000 square foot leased building at Stony Brook University, with a lease renewal expiring January 31, 2023 - The main corporate headquarters is a **30,000 sq. ft.** leased facility at Stony Brook University, with the lease expiring January 31, 2023[228](index=228&type=chunk) [Legal Proceedings](index=68&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is not currently aware of any legal proceedings expected to have a material adverse effect on its business, financial condition, or operating results - The company is not currently aware of any material legal proceedings[230](index=230&type=chunk) [Part II](index=68&type=section&id=PART%20II) [Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=68&type=section&id=ITEM%205.%20MARKET%20FOR%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock is listed on The Nasdaq Capital Market under "APDN", with 126 holders of record as of December 9, 2022, and no history or plans for cash dividends - Common stock is listed on The Nasdaq Capital Market under the symbol **"APDN"**[230](index=230&type=chunk) - As of December 9, 2022, there were **126 holders of record** of the common stock[231](index=231&type=chunk) - The company has never declared or paid cash dividends and does not plan to in the foreseeable future[231](index=231&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=69&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In fiscal year 2022, total revenues more than doubled to $18.2 million, driven by a 224% increase in COVID-19 testing services, leading to a reduced net loss of $8.3 million due to a significant unrealized gain on warrant liabilities Comparison of Financial Results (Fiscal Years 2022 vs. 2021) | Financial Metric | FY 2022 | FY 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$18,168,677** | **$9,027,738** | **+101.3%** | | Product Revenues | $1,882,804 | $3,295,849 | -42.9% | | Service Revenues | $759,138 | $937,735 | -19.0% | | Clinical Laboratory Service Revenues | $15,526,735 | $4,794,154 | +223.8% | | **Gross Profit** | **$5,053,640** | **$4,482,906** | **+12.7%** | | Gross Margin | 27.8% | 49.7% | -21.9 pts | | **Loss from Operations** | **($13,969,763)** | **($13,348,641)** | **+4.7%** | | **Net Loss** | **($8,270,059)** | **($14,278,439)** | **-42.1%** | | Net Loss per Share | ($0.93) | ($2.07) | -55.1% | - The **224% increase** in clinical laboratory service revenue was primarily due to a full twelve months of the contract with the City University of New York (CUNY), which contributed an increase of **$9.3 million** year-over-year[259](index=259&type=chunk) - The net loss for FY2022 was significantly reduced by a **$18.0 million unrealized gain** on the change in fair value of common warrants, which are classified as liabilities[269](index=269&type=chunk)[272](index=272&type=chunk) - The company raised approximately **$10.7 million** in net proceeds from a public offering in August 2022 and received **$3.7 million** from warrant exercises, alleviating substantial doubt about its ability to continue as a going concern[275](index=275&type=chunk) [Controls and Procedures](index=88&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were not effective as of September 30, 2022, due to a material weakness in internal control over financial reporting related to complex financial instruments, for which a remediation plan is being implemented - As of September 30, 2022, management concluded that disclosure controls and procedures were **not effective**[307](index=307&type=chunk) - A material weakness was identified in internal control over financial reporting for FY2022 and FY2021 related to the accounting for complex financial instruments, such as warrants, and their tax impact[309](index=309&type=chunk) - A remediation plan is being implemented to expand and improve the review process for complex financial instruments and their related tax implications, involving both internal personnel and third-party professionals[310](index=310&type=chunk) [Part III](index=90&type=section&id=PART%20III) [Directors, Executive Officers, and Corporate Governance](index=90&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information regarding directors, executive officers, and corporate governance will be incorporated by reference from the company's definitive proxy statement for the 2023 Annual Meeting of Stockholders - The required information is incorporated by reference from the forthcoming 2023 proxy statement[312](index=312&type=chunk) [Executive Compensation](index=90&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information regarding executive compensation will be incorporated by reference from the company's definitive proxy statement for the 2023 Annual Meeting of Stockholders - The required information is incorporated by reference from the forthcoming 2023 proxy statement[313](index=313&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=90&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information regarding security ownership will be incorporated by reference from the company's definitive proxy statement for the 2023 Annual Meeting of Stockholders - The required information is incorporated by reference from the forthcoming 2023 proxy statement[314](index=314&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=90&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) This section discloses that Dillon Hill Capital, LLC, a former greater than 5% shareholder, exercised 200,000 warrants in December 2020, with further information to be incorporated by reference from the 2023 proxy statement - In December 2020, related party Dillon Hill Capital, LLC (a **>5% shareholder** at the time) exercised **200,000 warrants**. As of September 30, 2022, they are no longer a **>5% shareholder**[315](index=315&type=chunk) [Principal Accountant Fees and Services](index=90&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Information regarding principal accountant fees and services will be incorporated by reference from the company's definitive proxy statement for the 2023 Annual Meeting of Stockholders - The required information is incorporated by reference from the forthcoming 2023 proxy statement[317](index=317&type=chunk) [Part IV](index=91&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=91&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section confirms that the consolidated financial statements for fiscal years 2022 and 2021, along with the independent auditor's report, are filed as part of this report, with all financial statement schedules omitted as not applicable - The consolidated financial statements and the independent auditor's report are filed with this Form 10-K[318](index=318&type=chunk) [Financial Statements and Supplementary Data](index=102&type=section&id=FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) [Consolidated Financial Statements](index=104&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, operations, and cash flows, showing a net loss of $8.3 million for FY 2022, an improvement from FY 2021, largely due to non-cash gains on warrant liabilities Consolidated Balance Sheet Highlights (as of Sept 30) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $15,215,285 | $6,554,948 | | Total current assets | $19,943,129 | $11,297,801 | | Total assets | $22,265,114 | $14,416,756 | | Total current liabilities | $4,185,308 | $3,272,343 | | Common Warrant liability | $5,139,400 | $0 | | Total liabilities | $9,356,175 | $3,303,810 | | Total equity | $12,908,939 | $11,112,946 | Consolidated Statement of Operations Highlights (for year ended Sept 30) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Total revenues | $18,168,677 | $9,027,738 | | Gross profit | $5,053,640 | $4,482,906 | | Loss from operations | ($13,969,763) | ($13,348,641) | | Unrealized gain on change in fair value of warrants | $17,999,521 | $0 | | Net loss | ($8,270,059) | ($14,278,439) | [Notes to Consolidated Financial Statements](index=109&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the alleviation of going concern doubt, disaggregate revenue by business operation, disclose a goodwill impairment in FY2021, and explain the classification and fair value measurement of warrant liabilities from 2022 offerings - Management has alleviated substantial doubt about the company's ability to continue as a going concern, estimating it has sufficient cash to fund operations for the next twelve months following the August 2022 financing[365](index=365&type=chunk) Disaggregation of Revenue (FY 2022) | Business Operation | Revenue | | :--- | :--- | | Clinical laboratory testing services | $15,526,735 | | Product and authentication services | $2,469,863 | | Research and development services | $592,001 | | **Total** | **$18,168,677** | - In FY2021, the company recorded a full impairment charge of **$821,741** to write off goodwill and intangible assets related to the Triathlon DNA production system technology, which is no longer in use[391](index=391&type=chunk)[415](index=415&type=chunk) - Warrants issued in the February and August 2022 offerings are classified as liabilities and measured at fair value, with changes recognized in the statement of operations. As of Sept 30, 2022, the fair value of these warrant liabilities was **$5,139,400**[403](index=403&type=chunk)[469](index=469&type=chunk)

Applied DNA Sciences, Inc. (NASDAQ:APDN) Q2 2022 Earnings Conference Call May 12, 2022 4:30 PM ET Company Participants Sanjay Hurry - Investor Relations Beth Jantzen - Chief Financial Officer James Hayward - Chairman, President & Chief Executive Officer Conference Call Participants Jonathan Aschoff - ROTH Capital Partners Jason McCarty - Maxim Group Jon Salmanson - Cantella Operator Good evening, and welcome to Applied DNA Sciences' Fiscal Second Quarter 2022 Financial Results Conference Call. All participa ...