
PART I - FINANCIAL INFORMATION Item 1 - Condensed Consolidated Financial Statements (unaudited) Unaudited financials show increased assets, decreased revenues, a net loss, and key subsequent events Condensed Consolidated Balance Sheet Highlights (unaudited) | Balance Sheet Item | March 31, 2020 (USD) | September 30, 2019 (USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $8,662,889 | $558,988 | | Total current assets | $9,979,073 | $2,146,308 | | Total Assets | $11,326,897 | $3,564,735 | | Total current liabilities | $1,849,884 | $2,245,990 | | Total liabilities | $4,058,121 | $4,413,234 | | Total equity (deficit) | $7,268,776 | ($848,499) | Condensed Consolidated Statements of Operations Highlights (unaudited) | Metric | Three Months Ended Mar 31, 2020 (USD) | Three Months Ended Mar 31, 2019 (USD) | Six Months Ended Mar 31, 2020 (USD) | Six Months Ended Mar 31, 2019 (USD) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $552,473 | $778,468 | $1,185,992 | $1,662,791 | | Loss from operations | ($2,682,208) | ($2,632,637) | ($5,293,626) | ($5,828,795) | | Net loss | ($2,950,905) | ($2,686,757) | ($5,613,646) | ($5,921,077) | | Net loss per share (basic and diluted) | ($0.79) | ($3.22) | ($1.76) | ($6.51) | Condensed Consolidated Statements of Cash Flows Highlights (unaudited) | Cash Flow Activity (Six Months Ended) | March 31, 2020 (USD) | March 31, 2019 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($5,151,404) | ($3,802,025) | | Net cash used in investing activities | ($44,752) | ($63,986) | | Net cash provided by financing activities | $13,300,059 | $3,747,588 | | Net increase (decrease) in cash | $8,103,903 | ($118,423) | - Subsequent to quarter end, the company received a $0.85 million loan under the Paycheck Protection Program (PPP) on May 1, 202084 - The company received Emergency Use Authorization (EUA) from the U.S. FDA for its Linea COVID-19 diagnostic assay kit on May 13, 202088 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses revenue changes, funding activities, and the uncertain impact of COVID-19 on operations Revenue Comparison (Three Months Ended March 31) | Revenue Type | 2020 (USD) | 2019 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Product revenues | $197,801 | $119,036 | +66% | | Service revenues | $354,672 | $659,432 | -46% | Revenue Comparison (Six Months Ended March 31) | Revenue Type | 2020 (USD) | 2019 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Product revenues | $435,671 | $440,747 | -1% | | Service revenues | $750,321 | $1,222,044 | -39% | - A public offering on November 15, 2019, raised $10.5 million in net proceeds, supplemented by $2.77 million and $2.91 million from subsequent warrant exercises141 - Management projects sufficient cash and cash equivalents to fund operations for the next twelve months from the report's filing date142 - The COVID-19 pandemic has caused a decline in non-biological tagging revenues, with the overall future impact on operations and liquidity remaining uncertain144145 Item 3 - Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company, Applied DNA Sciences, Inc. is exempt from providing quantitative and qualitative market risk disclosures147 Item 4 - Controls and Procedures Disclosure controls were effective as of March 31, 2020, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2020149 - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2020150 PART II - OTHER INFORMATION Item 1 – Legal Proceedings The company reported no legal proceedings during the period - No legal proceedings were reported152 Item 1A – Risk Factors A new risk factor addresses the potential material adverse impact of the COVID-19 pandemic on the company - A new risk factor addresses the potential material adverse impact of the COVID-19 global pandemic on the company's business153 - Revenues from non-biological tagging and related services have already declined due to COVID-19154 Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities were reported155 Item 3 – Defaults Upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported155 Item 4 – Mine Safety Disclosures This item is not applicable to the company - Mine safety disclosures are not applicable155 Item 5 – Other Information The company reported no other information - No other information was reported155 Item 6 – Exhibits This section lists exhibits filed with the Form 10-Q, including certifications and XBRL data files - This section lists all exhibits filed with the quarterly report, including officer certifications and XBRL interactive data files156