Applied DNA Sciences(US:APDN)2024-02-07 16:00Financial Performance - Total revenues for the three months ended December 31, 2023, were $891,164, a decrease of 83.1% compared to $5,262,752 for the same period in 2022[12]. - Product revenues were $307,317, down 40.4% from $516,396 in the prior year[12]. - Clinical laboratory service revenues significantly dropped to $336,700 from $4,514,295, reflecting a decline of 92.6%[12]. - The company reported a gross profit of $231,097, a significant decline from $2,377,683 in the same quarter last year[12]. - The net loss attributable to Applied DNA Sciences, Inc. was $1,105,100, compared to a net loss of $3,843,372 for the same period in 2022[12]. - The company reported a net loss of $1,130,281 for the three months ended December 31, 2023, compared to a net loss of $3,844,246 for the same period in 2022, indicating an improvement in financial performance[20]. - Operating cash flow was negative at $3,757,679 for the three-month period ended December 31, 2023, compared to negative cash flow of $2,383,106 for the same period in 2022[20]. - The loss from operations for reportable segments in Q4 2023 was $(2,539,861), compared to $(217,084) in Q4 2022[74]. - The company reported a discretionary bonus of $500,000 for the CEO for fiscal 2023, which was declined due to the company's cash position[68]. Cash and Assets - Cash and cash equivalents decreased to $3,359,045 from $7,151,800 as of September 30, 2023[8]. - Total assets as of December 31, 2023, were $9,913,210, down from $13,651,577 at the end of the previous quarter[10]. - The company had cash and cash equivalents of $3,359,045 as of December 31, 2023, down from $15,215,285 at the beginning of the period[20]. - The company reported total current assets of $4,590,046 as of December 31, 2023, down from $8,126,570 as of September 30, 2023, indicating a decrease of approximately 43%[8]. - Cash, cash equivalents, and restricted cash at the end of the period were $4,109,045, down from $12,877,179 at the end of December 2022[20]. - As of December 31, 2023, the company had working capital of $2,002,107 and cash and cash equivalents of $3,359,045[131]. Liabilities and Equity - Total liabilities decreased to $5,784,808 from $8,779,165 as of September 30, 2023[9]. - The company recorded warrant liabilities of $1,646,000 as of December 31, 2023, down from $4,285,000, indicating a decrease of about 62%[9]. - Accounts payable and accrued liabilities totaled $2,023,876 as of December 31, 2023, down from $2,270,388 as of September 30, 2023, representing a decrease of 10.9%[56]. - The company issued 61,200 shares of common stock for net proceeds of approximately $45,480 under an Equity Distribution Agreement, with an aggregate offering price of up to $6,397,939[57][58]. - The balance of warrants outstanding as of December 31, 2023, was 5,213,213, with a weighted average exercise price of $3.32 per share[62]. Revenue Recognition and Segments - The company recognized revenue for its clinical laboratory testing services upon completion of services, with performance obligations satisfied at the point of releasing testing results[141]. - Revenue for research and development contracts is recognized over time, primarily using the cost-to-cost method, reflecting the progress towards completion[142]. - The company has three reportable segments: Therapeutic DNA Production Services, MDx Testing Services, and DNA Tagging and Security Products and Services[46][47]. - For the three-month period ended December 31, 2023, revenues included 25% from one customer in the MDx Testing Services segment and 22% from one customer in the DNA Tagging and Security Products and Services segment[45]. Operational Highlights - The company is focused on expanding its business in the biotechnology sector, particularly in therapeutic DNA production and molecular diagnostics[23]. - The company launched DNA IVT templates in August 2022 and has secured proof of concept contracts with multiple mRNA manufacturing customers, indicating strong market demand[105]. - The acquisition of Spindle in July 2023 is expected to enhance the company's mRNA-related total addressable market (TAM) by approximately 3x compared to selling Linea DNA IVT templates alone[106]. - The company plans to manufacture Linea DNA IVT templates under Good Manufacturing Practices (GMP) with availability expected in the first half of CY2024, and additional GMP materials for drug products planned for 2025[107]. Expenses - Total operating expenses increased to $4,020,163, up 11.8% from $3,596,661 in the same quarter last year[12]. - Selling, general and administrative expenses increased by $458,991 or 17% for the three-month period ended December 31, 2023, totaling $3,084,348[125]. - Research and development expenses decreased by $35,489 or 4% for the three-month period ended December 31, 2023, totaling $935,815[126]. - The total rent expense for the three-month period ended December 31, 2023, was $174,419, compared to $148,826 for the same period in 2022, reflecting an increase of 17.2%[63]. Market Conditions - The effect of inflation on revenue and operating results was not significant, indicating stable operational performance despite economic pressures[146]. - As of Q4 2023, there are 3,951 gene, cell, and RNA therapies in development, almost all utilizing DNA in their manufacturing process, representing a substantial market opportunity for the Linea DNA platform[100]. - The Linea DNA platform offers advantages over plasmid-based DNA manufacturing, including speed, scalability, purity, simplicity, and flexibility, allowing for rapid production of high-fidelity DNA sequences[101][102][103].