Applied DNA Sciences(APDN) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenues for the three months ended June 30, 2024, were $797,519, a decrease of 72.7$2,917,341 for the same period in 2023[11]. - Product revenues for the three months ended June 30, 2024, were $246,644, down 22.1$316,950 in the prior year[11]. - Clinical laboratory service revenues for the three months ended June 30, 2024, were $324,730, a significant decline from$2,174,697 in the same quarter of 2023[11]. - Gross profit for the three months ended June 30, 2024, was $245,232, compared to$1,269,318 for the same period in 2023, reflecting a decrease of 80.7%[11]. - Total revenue for the nine-month period ended June 30, 2024, was $2,618,313, down 79.2$12,587,707 for the same period in 2023[37]. - Gross profit for the nine-month period ended June 30, 2024, was $771,980, significantly lower than$5,454,436 in the same period of 2023[100][103]. - The loss from segment operations for the nine-month period ended June 30, 2024, was $(6,748,159), compared to$(3,395,005) in the same period of 2023, indicating a worsening of approximately 98.1%[100][103]. Expenses and Losses - Operating expenses for the three months ended June 30, 2024, totaled $3,591,925, a decrease of 12.9$4,128,427 in the same quarter of 2023[11]. - The company reported a net loss attributable to Applied DNA Sciences, Inc. for the three months ended June 30, 2024, was $1,879,796, compared to a net loss of$(3,099,766) in the same period of 2023[11]. - For the nine-month period ended June 30, 2024, the net loss was $3,774,563, compared to a net loss of$6,407,265 for the same period in 2023, indicating a 41% improvement in losses year-over-year[19]. - The company incurred a net loss of $3,774,563 and generated negative operating cash flow of$10,462,332 for the nine-month period ended June 30, 2024[26]. - Loss from operations increased by $3,971,041 or 59$10,753,510 for the nine-month period ended June 30, 2024, compared to $6,782,469 for the same period in 2023[183]. Cash and Assets - Cash and cash equivalents as of June 30, 2024, were$10,442,131, an increase from $7,151,800 as of September 30, 2023[8]. - Total assets as of June 30, 2024, were$16,690,091, up from $13,651,577 as of September 30, 2023[9]. - Total liabilities as of June 30, 2024, were$4,455,636, a decrease from $8,779,165 as of September 30, 2023[9]. - The company had cash, cash equivalents, and restricted cash of$11,192,131 at the end of the period, compared to $11,506,235 at the end of June 30, 2023, showing a decrease of approximately 3$10,462,332 for the nine months ended June 30, 2024, compared to $3,537,911 in the same period of 2023, representing a significant increase in cash outflow[19]. Stock and Shareholder Information - The company reported a weighted average of 4,014,261 shares outstanding for the three months ended June 30, 2024, compared to 645,426 shares in the same period of 2023[11]. - The company issued 724,923 common stock and pre-funded warrants in a public offering, netting$10,525,063, which contributed to financing activities[19]. - A reverse stock split of 1-for-20 was executed on April 25, 2024, affecting all share and warrant information retroactively[22]. - The balance of common shares increased to 10,299,385 as of June 30, 2024, up from 645,426 shares at the beginning of the reporting period[14]. - The company received net proceeds of approximately $10.5 million from the Registered Direct Offering (RDO) closed on May 29, 2024, which helped regain compliance with Nasdaq's stockholders' equity requirement[79]. Revenue Sources and Segments - The company has three reportable segments: Therapeutic DNA Production Services, MDx Testing Services, and DNA Tagging and Security Products and Services[48]. - The company’s revenues for the three and nine-month periods ended June 30, 2024 included 28$0 and $40,035 of revenue from contract liabilities for the three and nine-month periods ended June 30, 2024, respectively[40]. - The company’s clinical laboratory testing services revenue for the three-month period ended June 30, 2024 was$13,150, a significant decrease from $1,521,315 in the same period of 2023[34]. Research and Development - Research and development expenses increased by$76,908 or 9% to $913,031 for the three-month period ended June 30, 2024, driven by enzyme development costs[164]. - Research and development expenses decreased by$34,131 or 1% to $2,762,040 for the nine-month period ended June 30, 2024, compared to$2,796,171 for the same period in 2023[175]. - The company is focusing on the development and commercialization of its Therapeutic DNA Production Services, with plans to expand its contract development and manufacturing operations for synthetic DNA[128]. Market and Strategic Developments - The company is focused on developing and commercializing technologies for DNA and RNA production and detection, with recent acquisitions aimed at enhancing its capabilities in mRNA therapeutics[21]. - The company launched its Linea IVT platform in July 2023, which combines its Linea DNA IVT templates with Spindle's proprietary RNAP, potentially increasing its mRNA-related total addressable market by approximately 3-5 times[136]. - The company is currently developing its Linea RNAP under an ISO 13485 quality system to increase production scale and reduce unit costs[136]. - The company is monitoring its business strategy and resource allocation to adapt to available opportunities in its various business markets[128]. Compliance and Regulatory Issues - The company received a notification from Nasdaq regarding non-compliance with the minimum bid price requirement, as the closing bid price was below $1.00 for 30 consecutive business days[113]. - The company plans to implement a reverse stock split to regain compliance with Nasdaq listing requirements, pending shareholder approval[114]. - The FDA's final rule on laboratory developed tests will require compliance with various phases starting May 6, 2025, impacting the company's MDx Testing Services[150]. Risks and Uncertainties - Company highlights risk factors that could materially harm business and financial condition[205]. - Additional uncertainties may adversely affect future results[205]. - The company faces risks related to regulatory approvals and compliance for its Therapeutic DNA Production Services, which are critical to its business strategy[121].