UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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Applied DNA Sciences, Inc. and Subsidiaries
Form 10-Q for the Quarter Ended December 31, 2021
Table of Contents
Part I - Financial Information
Item 1 - Financial Statements
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, |
| September 30, | |||
2021 | 2021 | |||||
ASSETS | (unaudited) | |||||
Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Accounts receivable, net of allowance of $ |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Other assets: |
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Deposits |
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Total Assets | $ | | $ | | ||
LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable and accrued liabilities | $ | | $ | | ||
Deferred revenue |
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Total current liabilities |
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Long term accrued liabilities |
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Total liabilities |
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Commitments and contingencies (Note F) |
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Applied DNA Sciences, Inc. stockholders’ equity: |
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Preferred stock, par value $ |
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Series A Preferred stock, par value $ |
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Series B Preferred stock, par value $ |
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Common stock, par value $ |
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Additional paid in capital |
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Accumulated deficit |
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Applied DNA Sciences, Inc. stockholders’ equity: |
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Noncontrolling interest | | ( | ||||
Total equity | | | ||||
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Total liabilities and equity | $ | | $ | | ||
See the accompanying notes to the unaudited condensed consolidated financial statements
1
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31, | ||||||
| 2021 |
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Revenues |
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Product revenues | $ | | $ | | ||
Service revenues |
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Clinical laboratory service revenues | | | ||||
Total revenues | | | ||||
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Cost of product revenues | |
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Cost of clinical laboratory service revenues |
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Total cost of product and clinical laboratory service revenues | | | ||||
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Gross profit | | | ||||
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Operating expenses: |
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Selling, general and administrative |
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Research and development |
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Total operating expenses |
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LOSS FROM OPERATIONS |
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Interest income (expense), net | | ( | ||||
Loss on extinguishment of debt | | ( | ||||
Other expense, net | ( |
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Loss before provision for income taxes | ( |
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Provision for income taxes |
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NET LOSS | ( | ( | ||||
Less: Net income attributable to noncontrolling interest | ( | ( | ||||
NET LOSS attributable to common stockholders | $ | ( | $ | ( | ||
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Net loss per share attributable to common stockholders-basic and diluted | ( | ( | ||||
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Weighted average shares outstanding- basic and diluted |
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See the accompanying notes to the unaudited condensed consolidated financial statements
2
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
For the Three-Month Period Ended December 31, 2021 | |||||||||||||||||
Common | Common | Additional | Accumulated | Noncontrolling | Total | ||||||||||||
Shares | Stock | Paid in | Deficit | Interest | |||||||||||||
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Balance, October 1, 2021 |
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Stock based compensation expense | — | — | | — | — | | |||||||||||
Options issued in settlement of accrued bonus | — | — | | — | — | | |||||||||||
Net loss | — | — | — | ( | | ( | |||||||||||
Balance, December 31, 2021 | | $ | | $ | | $ | ( | $ | | $ | | ||||||
For the Three-Month Period Ended December 31, 2020 | |||||||||||||||||
Common | Additional |
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Balance, October 1, 2020 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Exercise of warrants | | | | | |||||||||||||
Fair value of warrants issued in connection with convertible note repayment | — | — | | — | — | | |||||||||||
Stock based compensation expense | — | — | | — | — | | |||||||||||
Net loss | — | — | — | ( | | ( | |||||||||||
Balance, December 31, 2020 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
See the accompanying notes to the unaudited condensed consolidated financial statements
3
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended December 31, | ||||||
| 2021 |
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Cash flows from operating activities: |
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Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Loss on extinguishment of convertible notes payable | | | ||||
Stock-based compensation |
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Provision for bad debts |
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Change in operating assets and liabilities: |
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Accounts receivable |
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Inventories |
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Prepaid expenses and other current assets and deposits |
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Accounts payable and accrued liabilities |
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Deferred revenue |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchase of property and equipment | ( |
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Net cash used in investing activities |
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Cash flows from financing activities: | ||||||
Net proceeds from exercise of warrants | | | ||||
Repayment of convertible notes |
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Net cash provided by financing activities | |
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Net decrease in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period | $ | | $ | | ||
Supplemental Disclosures of Cash Flow Information: |
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Cash paid during period for interest | $ | | $ | | ||
Cash paid during period for income taxes | $ | | $ | | ||
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Non-cash investing and financing activities: |
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Interest paid in kind | $ | | $ | | ||
Property and equipment acquired, and included in accounts payable | $ | | $ | | ||
Issuance of stock options for payment of accrued bonus | $ | | | |||
FV of warrants issued | $ | | $ | | ||
See the accompanying notes to the unaudited condensed consolidated financial statements
4
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE A — NATURE OF THE BUSINESS
Applied DNA Sciences, Inc. (“Applied DNA” or the “Company”) develops and markets DNA-based technology solutions utilizing its LinearDNATM large-scale polymerase chain reaction (“PCR”) based manufacturing platform. The Company’s proprietary platform produces large quantities of DNA for use in the nucleic acid-based in vitro diagnostics and preclinical nucleic-acid based drug development and manufacturing markets (“Biotherapeutic Contract Research and Manufacturing”) and for supply chain security, anti-counterfeiting and anti-theft technology purposes (“Non-Biologic Tagging”). The Company also develops PCR-based molecular in vitro diagnostics for COVID-19 (the “COVID-19 Diagnostic Tests”). In addition, under its wholly owned subsidiary, Applied DNA Clinical Labs, LLC (“ADCL”), the Company is offering a high-throughput turnkey solution for population-scale COVID-19 testing marketed as safeCircleTM. safeCircle utilizes the Company’s COVID-19 Diagnostic Tests and is designed to look for infection within defined populations or communities utilizing high throughput testing methodologies (the “COVID-19 Testing Services”).
NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES
Interim Financial Statements
The accompanying condensed consolidated financial statements as of December 31, 2021, and for the three-month periods ended December 31, 2021, and 2020 are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended December 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2022. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended September 30, 2021 and footnotes thereto included in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission (“SEC”) on December 9, 2021, as amended. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year’s presentation.
Principles of Consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, APDN (B.V.I.) Inc., Applied DNA Sciences Europe Limited, and Applied DNA Sciences India Private Limited, ADCL and its majority-owned subsidiary, LineaRx, Inc. (“LRx”). Significant inter-company transactions and balances have been eliminated in consolidation. The condensed consolidated balance sheet as of September 30, 2021 contained herein has been derived from the audited consolidated financial statements as of September 30, 2021 but does not include all disclosures required by GAAP.
Going Concern and Management’s Plan
The Company has recurring net losses. The Company incurred a net loss of $
The Company’s current capital resources include cash and cash equivalents, accounts receivable and inventories. Historically, the Company has financed its operations principally from the sale of equity and equity-linked securities.
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued
Use of Estimates
The preparation of the financial statements in conformity with Accounting Principles Generally Accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most significant estimates include revenue recognition, allowance for doubtful accounts, recoverability of long-lived assets, including the values assigned to property and equipment, fair value calculations for stock-based compensation and warrants, contingencies, and management’s anticipated liquidity. Management reviews its estimates on a regular basis and the effects of any material revisions are reflected in the condensed consolidated financial statements in the period they are deemed necessary. Accordingly, actual results could differ from those estimates.
Revenue Recognition
The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Revenue Recognition (“ASC 606” or “Topic 606”).
The Company measures revenue at the amounts that reflect the consideration to which it is expected to be entitled in exchange for transferring control of goods and services to customers. The Company recognizes revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. The Company’s contracts with customers may include multiple performance obligations (e.g. taggants, maintenance, authentication services, research and development services, etc.). For such arrangements, the Company allocates revenues to each performance obligation based on their relative standalone selling price.
Due to the short-term nature of the Company’s contracts with customers, it has elected to apply the practical expedients under Topic 606 to: (1) expense as incurred, incremental costs of obtaining a contract and (2) not adjust the consideration for the effects of a significant financing component for contracts with an original expected duration of one year or less.
Product Revenues and Authentication Services
The Company’s PCR-produced linear DNA products are manufactured in accordance with contracts with customers. The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The Company invoices customers upon shipment, and its collection terms range, on average, from 30 to 60 days.
Authentication Services
The Company recognizes revenue for authentication services upon satisfying its promises to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company services are complete, which in nearly all cases is when the authentication report is released to the customer.
6
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued
Revenue Recognition, continued
Clinical Laboratory Testing Services
The Company records revenue for its clinical laboratory testing service contracts, which includes its COVID-19 Testing Services, upon satisfying its promise to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time that Company services are complete, which in nearly all cases is when the testing results are released to the customer. For those customers with a fixed monthly fee, the revenue is recognized over-time as the services are provided.
Research and Development Services
The Company records revenue for its research and development contracts using the over-time revenue recognition model. Revenue is primarily measured using the cost-to-cost method, which the Company believes best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation.
Revenues are recorded proportionally as costs are incurred. For contracts where the total costs cannot be estimated, revenues are recognized for the actual costs incurred during a period until the remaining costs to complete a contract can be estimated. The Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.
Disaggregation of Revenue
The following table presents revenues disaggregated by our business operations and timing of revenue recognition:
Three Month Period Ended: | ||||||
December 31, | December 31, | |||||
| 2021 |
| 2020 | |||
Research and development services (over-time) | $ | | $ | | ||
Clinical laboratory testing services (point-in-time) | | | ||||
Clinical laboratory testing services (over-time) | | | ||||
Product and authentication services (point-in-time): |
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Supply chain |
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Asset marking |
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Diagnostic test kits | | | ||||
Total | $ | | $ | | ||
7
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued
Revenue Recognition, continued
Contract balances
As of December 31, 2021, the Company has entered into contracts with customers for which revenue has not yet been recognized. Consideration received from a customer prior to revenue recognition is recorded to a contract liability and is recognized as revenue when the Company satisfies the related performance obligations under the terms of the contract. The Company’s contract liabilities, which are reported as deferred revenue on the condensed consolidated balance sheet, consist almost entirely of research and development contracts where consideration has been received and the development services have not yet been fully performed.
The opening and closing balances of the Company’s contract balances are as follows:
October 1, | December 31, | $ | |||||||||
| Balance sheet classification |
| 2021 |
| 2021 |
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Contract liabilities |
| Deferred revenue | $ | |
| $ | | $ | | ||
For the three-month period ended December 31, 2021, the Company recognized $
Inventories
Inventories, which consist primarily of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable value, with cost determined by using the first-in, first-out (FIFO) method.
Property and Equipment
Property and equipment are stated at cost and depreciated using the
Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction.
In its interim financial statements, the Company follows the guidance in ASC 270, “Interim Reporting” and ASC 740 “Income Taxes,” whereby the Company utilizes the expected annual effective tax rate in determining its income tax provisions for the interim periods. That rate differs from U.S. statutory rates primarily as a result of a valuation allowance related to the Company’s net operating loss carryforward as a result of the historical losses of the Company.
Net Loss Per Share
The Company presents loss per share utilizing a dual presentation of basic and diluted loss per share. Basic loss per share includes no dilution and has been calculated based upon the weighted average number of common shares outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon the exercise of the Company’s stock options and warrants.
8
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued
Net Loss Per Share, continued
For the three-month periods ended December 31, 2021 and 2020, common stock equivalent shares are excluded from the computation of the diluted loss per share as their effect would be anti-dilutive.
Securities that could potentially dilute basic net income per share in the future were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the three-month periods ended December 31, 2021 and 2020 are as follows:
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Warrants |
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Total |
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Stock-Based Compensation
The Company accounts for stock-based compensation for employees, directors, and nonemployees in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options is estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 740, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the consolidated statements of operations.
Concentrations
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and cash equivalents with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. As of December 31, 2021, the Company had cash and cash equivalents of approximately $
The Company’s revenues earned from sale of products and services for the three-month period ended December 31, 2020 included an aggregate of
9
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE B – BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued
Recent Accounting Standards
In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, “Debt: Debt with Conversion and Other Options,” that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, “Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of ASU 2020-06 to have a significant impact on its consolidated financial statements.
NOTE C — INVENTORIES
Inventories consist of the following:
December 31, | September 30, | |||||
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(unaudited) | ||||||
Raw materials | $ | | $ | | ||
Work-in-progress | | — | ||||
Finished goods |
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Total | $ | | $ | | ||
NOTE D — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are as follows:
December 31, | September 30, | |||||
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(unaudited) | ||||||
Accounts payable | $ | | $ | | ||
Accrued salaries payable |
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Other accrued expenses |
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Total | $ | | $ | | ||
10
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE E —WARRANTS AND STOCK OPTIONS
Warrants
The following table summarizes the changes in warrants outstanding. These warrants were granted in lieu of cash compensation for services performed or as financing expenses in connection with the sales of the Company’s Common Stock.
Transactions involving warrants are summarized as follows:
Weighted | |||||
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Exercise | |||||
Number of | Price Per | ||||
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Balance at October 1, 2021 |
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Exercised |
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Cancelled or expired |
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Balance at December 31, 2021 |
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Stock Options
For the three-month period ended December 31, 2021, the Company granted
The fair value of options granted during the three months ended December 31, 2021, was determined using the Black Scholes Option Pricing Model. For the purposes of the valuation model, the Company used the simplified method for determining the granted options expected lives. The simplified method is used since the Company does not have adequate historical data to utilize in calculating the expected term of options. The fair value for options granted during the three months ended December 31, 2021 was calculated using the following weighted average assumptions: stock price $
11
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE F — COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases office space under an operating lease in Stony Brook, New York for its corporate headquarters. The lease is for a
The total rent expense for the three-month periods ended December 31, 2021 and 2020 were $
Employment Agreement
The employment agreement with Dr. James Hayward, the Company’s President and Chief Executive Officer (“CEO”), entered into in July 2016 provides that he will be the Company’s CEO and will continue to serve on the Company’s Board of Directors. The initial term was from July 1, 2016 through June 30, 2017, with automatic
Upon termination due to death or disability, the CEO will generally be entitled to receive the same payments and benefits he would have received if his employment had been terminated by the Company without cause (as described in the preceding paragraph), other than salary continuation payments.
12
APPLIED DNA SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
(unaudited)
NOTE F — COMMITMENTS AND CONTINGENCIES, continued
Employment Agreement, continued
On October 29, 2021, the Board of Directors amended the existing compensatory arrangement with the CEO to increase his salary to $
Litigation
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the recorded liability includes probable and estimable legal costs associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. There is no pending litigation involving the Company at this time.
13
Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
This Quarterly Report on Form 10-Q (including but not limited to this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are intended to qualify for the “safe harbor” created by those sections. In addition, we may make forward-looking statements in other documents filed with or furnished to the Securities and Exchange Commission (“SEC”), and our management and other representatives may make forward-looking statements orally or in writing to analysts, investors, representatives of the media and others. These statements relate to future events or to our future operating or financial performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.
Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts and include, but are not limited to, statements using terminology such as “can”, “may”, “could”, “should”, “assume”, “forecasts”, “believe”, “designated to”, “will”, “expect”, “plan”, “anticipate”, “estimate”, “potential”, “position”, “predicts”, “strategy”, “guidance”, “intend”, “budget”, “seek”, “project” or “continue”, or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future, including risks relating to the continuing outbreak of COVID-19. You should read statements that contain these words carefully because they:
| ● | discuss our future expectations; |
| ● | contain projections of our future results of operations or of our financial condition; and |
| ● | state other “forward-looking” information. |
We believe it is important to communicate our expectations. However, forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry and are subject to known and unknown risks, uncertainties and other factors. Accordingly, our actual results and the timing of certain events may differ materially from those expressed or implied in such forward-looking statements due to a variety of factors and risks, including, but not limited to, those set forth in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report, those set forth from time to time in our other filings with the SEC, including our Annual Report on Form 10-K, for the fiscal year ended September 30, 2020, as amended, and the following factors and risks:
| ● | our expectations of future revenues, expenditures, capital or other funding requirements; |
| ● | the adequacy of our cash and working capital to fund present and planned operations and growth; |
| ● | the substantial doubt relating to our ability to continue as a going concern; |
| ● | our business strategy and the timing of our expansion plans; |
| ● | our expectations concerning product candidates for our technologies; |
| ● | our expectations concerning existing or potential development and license agreements for third-party collaborations and joint ventures; |
| ● | our expectations of when different phases of clinical activity may commence and conclude; |
| ● | the effect of governmental regulations generally; |
| ● | our expectations of when regulatory submissions may be filed or when regulatory approvals may be received; and |
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| ● | our expectations of when or if we will become profitable. |
Any or all of our forward-looking statements may turn out to be wrong. They may be affected by inaccurate assumptions that we might make or by known or unknown risks and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in our forward-looking statements. Among the factors that could affect future results are:
| ● | the inherent uncertainties of product development based on our new and as yet not fully proven technologies; |
| ● | the risks and uncertainties regarding the actual effect on humans of seemingly safe and efficacious formulations and treatments when tested clinically; |
| ● | our LineaTM COVID-19 Assay Kits and COVID-19 testing may become obsolete or suffer a decline in demand for a variety of reasons; |
| ● | the inherent uncertainties associated with clinical trials of product candidates; |
| ● | the inherent uncertainties associated with the process of obtaining regulatory clearance or approval to market product candidates; |
| ● | the inherent uncertainties associated with commercialization of products and/or services that have received regulatory approval; |
| ● | economic and industry conditions generally and in our specific markets; |
| ● | The volatility of, and decline in our stock price; and |
| ● | our ability to obtain the necessary financing to fund our operations and effect our strategic development plan. |
All forward-looking statements and risk factors included in this Quarterly Report are made as of the date hereof, in each case based on information available to us as of the date hereof, and we assume no obligations to update any forward-looking statement or risk factor, unless we are required to do so by law. If we do update one or more forward-looking statements, no inference should be drawn that we will make updates with respect to other forward-looking statements or that we will make any further updates to those forward-looking statements at any future time.
Forward-looking statements may include our plans and objectives for future operations, including plans and objectives relating to our products and our future economic performance, projections, business strategy and timing and likelihood of success. Assumptions relating to the forward-looking statements included in this Quarterly Report involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development and commercialization of our technologies, all of which are difficult or impossible to predict accurately and many of which are beyond our control.
Any of the assumptions underlying the forward-looking statements contained in this Quarterly Report could prove inaccurate and, therefore, we cannot assure you that any of the results or events contemplated in any of such forward-looking statements will be realized. Based on the significant uncertainties inherent in these forward-looking statements, the inclusion of any such statement should not be regarded as a representation or as a guarantee by us that our objectives or plans will be achieved, and we caution you against relying on any of the forward looking-statements contained herein.
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Trademarks, Trade Names and Service Marks
Our trademarks currently used in the United States include Applied DNA Sciences®, SigNature® molecular tags, SigNature® T molecular tags, fiberTyping®, DNAnet®, SigNify®, Beacon®, CertainT®, LinearDNA™, Linea™ COVID-19 Diagnostic Assay Kit and safeCircleTM COVID-19 testing. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. All trademarks, service marks and trade names included or incorporated by reference in this Quarterly Report are the property of the respective owners.
Introduction
Applied DNA develops and markets DNA-based technology solutions utilizing its LinearDNATM large-scale polymerase chain reaction (“PCR”) based manufacturing platform. Our proprietary PCR-based DNA LinearDNATM manufacturing platform produces large quantities of DNA for use in nucleic acid-based in vitro medical diagnostics and preclinical nucleic acid-based drug development and manufacturing markets (“Biotherapeutic Contract Research and Manufacturing”) and for supply chain security, anti-counterfeiting and anti-theft technology purposes (“Non-Biologic Tagging”). We also have developed or are developing multiple PCR-based molecular diagnostic test for COVID-19. Our Linea 1.0 COVID-19 Assay Kit was granted EUA by the FDA in May 2020. Our Linea 2.0 COVID-19 Assay currently holds conditional approval from NYSDOH as an LDT. An EUA request for the Linea 2.0 COVID-19 Assay is currently pending with FDA (the Linea 1.0 and Linea 2.0 COVID-19 Assays are collectively referred to as the “COVID-19 Diagnostic Tests”). In addition, under our wholly-owned subsidiary, ADCL, we offer a high-throughput turnkey solution for population-scale COVID-19 testing marketed as safeCircle. safeCircle is designed to look for infection within defined populations or communities utilizing high throughput PCR-based testing methodologies (the “COVID-19 Testing Services”).
Applied DNA’s LinearDNATM PCR platform is capable of producing large scale DNA, which we believe offers many benefits over the limitations of other large scale DNA manufacturing systems, including:
| ● | Speed – Production of DNA via the LinearDNATM platform can be measured in terms of hours, not days and weeks like other large-scale DNA manufacturing platforms. |
| ● | Scale – The LinearDNATM platform is flexible and can be adapted to encompass large quantity production. |
| ● | Purity – DNA produced via PCR is pure, resulting in only large quantities of the target DNA sequence. Unwanted DNA sequences such as bacterially derived DNA are not present. |
| ● | Customization – DNA produced via PCR can be easily chemically modified to suit specific customer applications. |
Biotherapeutic Contract Research and Manufacturing
Our patented continuous flow PCR systems and other proprietary PCR-based production technology and post-processing systems that comprise the LinearDNATM platform allows for the large-scale production of specific DNA sequences. The LinearDNATM platform is currently being used for customers to manufacture DNA as components of in vitro diagnostic tests and for preclinical nucleic acid-based drug development in the fields of adoptive cell therapies (CAR T and TCR therapies), DNA vaccines (anti-viral and cancer), RNA therapies, clustered regularly interspaced short palindromic repeats (CRISPR) based therapies and gene therapies. We believe our LinearDNATM platform confers a distinct competitive advantage in cost, cleanliness, and time-to-market as compared to other DNA manufacturing systems.
The Company provides preclinical contract research and manufacturing services for the nucleic acid-based therapeutic markets. We work with biotech and pharmaceutical companies to convert plasmid-based and/or viral transduction-based preclinical biotherapeutics into PCR-produced linear DNA-based forms that can be produced on our LinearDNATM platform. In addition, we provide contract research services to RNA-based drug and biologic customers for preclinical studies. These services include the design, development and manufacture of PCR-produced DNA templates for RNA. In addition, we also use our LinearDNATM platform to produce very large gram-scale quantities of DNA for the in vitro diagnostic market where our DNA is used for both commercially available diagnostics and diagnostics under development.
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We also seek to develop, acquire, and commercialize, ourselves or with partners, a diverse portfolio of nucleic acid-based therapeutics based on PCR-produced linear DNA to improve existing nucleic acid-based therapeutics or to create new nucleic acid-based therapeutics that address unmet medical needs. We are currently directly engaged in preclinical drug candidate development activities focusing on therapeutically relevant DNA constructs manufactured via our LinearDNATM platform in the fields of DNA-based anti-viral and anti-cancer vaccines, RNA therapeutics, CAR T cell immunotherapy and the manufacture of rAAV vectors for gene therapy. The Company is also engaged in preclinical animal drug candidate development activities focusing on therapeutically relevant DNA constructs manufactured via its LinearDNATM platform.
COVID-19 Diagnostic Testing
On May 13, 2020 and subsequently amended, the Company received an EUA from the FDA for the clinical use of the LineaTM 1.0 Assay for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens. Under the EUA, testing is limited to laboratories certified under CLIA, that meet requirements to perform high complexity tests. The intended use, under the EUA allows ADCL and other certified laboratory users of the LineaTM 1.0 Assay, to provide testing to individuals with the return of individual testing results. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation by FDA or the Company. Our LineaTM 1.0 Assay has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens.
Due to the emergence and spread of the Omicron BA.1 SARS-CoV-2 Variant of Concern, which may result in false negative results with the Linea 1.0 Assay, the Company received notice from FDA in December 2021 that it must cease the use and sale of the Linea 1.0 Assay as a primary diagnostic for COVID-19 (the “Linea 1.0 FDA Notice”).
On November 15, 2021 FDA revised its guidance document titled “Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency (Revised)” (“FDA COVID-19 Testing Guidance”) to require all COVID-19 diagnostic assays conducted as Laboratory-Developed Tests (“LDTs”) to apply for EUA authorization within a 60-day period from the revised guidance’s issuance date. The FDA Guidance provides an exception for certain notified states, who can authorize in-state laboratories to develop and perform COVID-19 tests under the authority of their own State law in instances where the laboratory did not otherwise submit an EUA request to FDA. New York State is a notified state under the current FDA COVID-19 Testing Guidance.
In response to the impact of Omicron BA.1 and the Linea 1.0 FDA Notice, the Company, via its ADCL subsidiary, submitted data supporting the validation of the Linea 2.0 Assay as a laboratory developed test (LDT) to New York State Department of Health (NYSDOH) on December 2, 2021. This process complies with the current FDA COVID-19 Testing Guidance. Conditional approval for the Linea 2.0 Assay as a LDT from the NYSDOH was received on December 30, 2021. The NYSDOH conditional approval included single sample and up to 5-sample pooled testing. Use of the Linea 2.0 Assay under the NYSDOH conditional approval is limited to samples from New York State. The Linea 2.0 Assay has not been FDA cleared or approved. Linea 2.0 is currently used in the Company’s COVID-19 Testing Services.
The Company currently manufactures the COVID-19 Diagnostic Tests at its facilities in Stony Brook.
COVID-19 Testing Services and Clinical Laboratory
We offer high throughput COVID-19 testing services to customers as a Testing-as-a-Service (TaaS) offering branded under the safeCircleTM trademark. safeCircle is a turnkey testing solution that provides for all aspects of large population COVID-19 testing – from sample collection to results reporting – for institutes of higher education, K-12 schools, businesses, and healthcare facilities, among other institutions with large populations. safeCircle utilizes serial, high-sensitivity pooled RT-PCR testing to help prevent virus spread by quickly identifying infections within a community, school, or workplace. Testing is conducted utilizing the Company’s COVID-19 Diagnostic Tests or third-party EUA-authorized assays that provides rapid results using real-time PCR (RT-PCR testing) with results returned typically within 24 to 48 hours at the Company’s Clinical Laboratory Evaluation Program (“CLEP”) permitted, CLIA-certified laboratory. For the majority of safeCircle clients, test scheduling and testing result reporting is provided though the CLEARED4 digital health platform owned and operated by Chelsea Health Solutions, LLC.
We currently provide safeCircleTM pooled testing to primary/secondary/higher education institutions, private clients, local governments, and businesses and college athletic programs. The large majority of safeCircle customers are located within New York State.
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On May 10, 2021 ADCL received its New York clinical laboratory permit and its CLIA certification from the NYSDOH, CLEP, which is currently permitted for virology. As part of the Company’s COVID-19 Testing Services its laboratory provides individual COVID-19 testing utilizing the Company’s COVID-19 Diagnostic Tests or third-party EUA-authorized COVID-19 diagnostic assays. The Company’s COVID-19 Testing Services also includes pooled surveillance testing that is not regulated by FDA, CDC or CMS.
Non-Biologic Tagging and Security Products and Services
Our supply chain security business allows our customers to use non-biologic DNA (molecular) tags manufactured on our LinearDNATM platform to mark objects in a unique manner and then identify these objects by detecting the absence or presence of the molecular tag. We believe our molecular tags are not economically feasible nor practical to replicate, and that our disruptive tracking platform offers broad commercial relevance across many industry verticals. The Company’s core products include:
| ● | SigNature® Molecular Tags produced by the Company’s LinearDNATM platform, provide an approach to authenticate goods within large and complex supply chains for materials such as cotton, and leather, in-home textiles and apparel, pharmaceuticals and nutraceuticals, cannabis and other products. |
| ● | SigNify® IF portable DNA readers and SigNify consumable reagent test kits provide definitive real-time authentication of molecular tags in the field, providing a front-line solution for supply chain integrity backed with forensic-level molecular tag authentication. Applied DNA’s software platform enables customers to track materials throughout a supply chain or product life. |
| ● | CertainT trademark indicates the use of Applied DNA’s tagging, testing and tracking platforms and solutions, enabling manufacturers, brands and trade organizations to convey proof of their product claims. |
Recent Developments
In late November 2021, the SARS-CoV-2 Omicron Variant of Concern (B.1.1.529, sub-lineage BA.1) (the “Omicron VOC”) was detected. The Omicron VOC contains over thirty mutations in the Spike region of the SARS-CoV-2 genome. The sensitivity of the Linea COVID-19 1.0 Assay Kit is impacted by the Omicron VOC, resulting in a unique detection pattern that may be specific for the Omicron variant. More specifically, the Linea COVID-19 Assay Kit unique detection pattern results in false negative results in patients infected with the Omicron variant when tested with the Linea 1.0 Assay as a primary diagnostic. As a result, the Company believes that the Linea COVID-19 Assay Kit may have utility as a reflex test for COVID-19 positive samples from third-party assays to detect whether a sample potentially contains the Omicron VOC. Specifically, the Linea 1.0 Assay may be potentially used as a reflex test to indicate the presence of Omicron in samples that have tested positive for COVID-19 via third-party assays that cannot discriminate for the new variant because these same samples will test negative on the Linea 1.0 Assay due to the kit’s unique detection pattern.
In December 2021, the Company, working in conjunction with FDA, submitted data showing that the Linea 1.0 Assay produces false negative results with the Omicron VOC. As a result, the FDA issued the Linea 1.0 FDA Notice informing the company that is must cease use of the Linea 1.0 Assay as a primary diagnostic for COVID-19.
Linea 2.0 Assay LDT Conditional Approval and EUA Request to FDA
In response to the impact of the Omicron VOC and the Linea 1.0 FDA Notice, the Company, via its ADCL subsidiary, submitted data supporting the validation of a new Linea 2.0 Assay as a laboratory developed test (LDT) to New York State Department of Health (NYSDOH) on December 2, 2021. The Linea 2.0 Assay was validated for the qualitative detection of COVID-19 in respiratory specimens and targets conserved regions of the E and N Genes of SARS-CoV-2. In silico analysis has shown that the Linea 2.0 Assay can detect the Omicron VOC as well as all other known variants of concern and variants of interest. Conditional approval for the Linea 2.0 Assay as a LDT from the NYSDOH was received on December 30, 2021. The NYSDOH conditional approval included single sample and up to 5-sample pooled testing. Use of the Linea 2.0 Assay under the NYSDOH conditional approval is limited to samples from New York State.
Subsequently, on January 19, 2021, the Company through its ADCL subsidiary, submitted a request for EUA to FDA for the Linea 2.0 Assay. The EUA request includes single sample and up to 5-sample pooled testing, as well as an unsupervised at-home collection kit for use in conjunction with the Linea 2.0 Assay. The Linea 2.0 Assay as filed in the EUA request is a non-distributed test for use only in ADCL’s laboratories. The EUA request is currently pending.
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Linea 1.0 Assay and Omicron VOC BA.2 Subvariant
On January 28, 2022, the Company announced that the Linea 1.0 Assay, when used as a reflex test for COVID-19 positive samples, may exhibit a unique detection signature that can identify SARS-CoV-2 mutations that are indicative of the BA.2 subvariant of the Omicron VOC.
Plan of Operations
General
Historically, the substantial portion of our revenues has been generated from sales of our SigNature® and SigNature® T molecular tags, our principal supply chain security and product authentication solutions. However, most of our near-term growth in revenues has been derived from sales of our Linea™ COVID-19 Assay Kit, our validated COVID-19 pooled testing under review by NYSDOH, and our COVID-19 Surveillance Testing. We also expect future growth in revenues to be derived from the manufacturing of DNA products for the biotechnology and in vitro diagnostic markets. To a lesser extent, we expect to grow revenues from the sale of SigNature® molecular tags, SigNature® T molecular tags, SigNify® and CertainT® offerings as we work with companies and governments to secure supply chains for various types of products and product labeling throughout the world. We are also seeking to establish a revenue stream from our iCTC Technology. We have continued to incur expenses in expanding our business to meet current and anticipated future demand. We have limited sources of liquidity.
Critical Accounting Policies and Recently Issued Accounting Pronouncements
See Note B to the accompanying unaudited condensed consolidated financial statements for our critical accounting policies and recent accounting pronouncements.
Comparison of Results of Operations for the Three-Month Periods Ended December 31, 2021 and 2020
Revenues
Product revenues
For the three-month periods ended December 31, 2021, and 2020, we generated $826,311 and $550,097 in revenues from product sales, respectively. Product revenues increased by $276,214 or 50% for the three-month period ended December 31, 2021, as compared to the three-month period ended December 31, 2020. The increase in product revenues was primarily related to an increase of approximately $308,000 in Textiles related to the shipment of DNA concentrate to protect a cotton supply chain. This increase was offset by a decrease of approximately $52,000 in sales of our LineaTM COVID-19 Assay Kit.
Service revenues
For the three-month periods ended December 31, 2021, and 2020, we generated $139,273 and $293,274 in revenues from sales of services, respectively. The decrease in service revenues of $154,001 or 53% for the three-month period ended December 31, 2021, as compared to the same period in the prior fiscal year is attributable to a decrease of approximately $110,000 and $63,000 for research and development projects in our pharmaceutical/nutraceutical and biopharmaceutical markets, respectively.
Clinical laboratory service revenues
For the three-month periods ended December 31, 2021 and 2020 we generated $3,200,122 and $772,770 in revenues from our clinical laboratory testing services, respectively. Clinical laboratory testing service revenues increased by $2,427,352, or 314% for the three-month period ended December 31, 2021, as compared to the same period in the prior fiscal year. The increase in revenue is primarily due to an increase in demand for COVID-19 testing services during the first three months of fiscal 2022 compared to the same period during fiscal 2021. Of this increase, approximately $2,000,000 in testing services related to our contract with the City University of New York.
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Gross Profit
Gross profit for the three-month period ended December 31, 2021, increased by $8,778 or 14% from $1,100,360 for the three-month period ended December 31, 2020 to $1,109,138. The gross profit percentage was 27% and 68% for the three-month periods ended December 31, 2021, and 2020, respectively. The decline in the gross profit percentage was the result of a significant portion of our clinical laboratory service revenues coming from the testing contracts where we also provide and staff the test collection centers, as these contract have higher costs associated with them as compared to our surveillance testing contracts. To a lesser extent this decrease in gross profit percentage was also due to product sales mix, as sales during the three-month period ended December 31, 2020 included a higher volume of sales of our LineaTM COVID-19 Assay Kit, which are at a higher gross margin.
Costs and Expenses
Selling, General and Administrative
Selling, general and administrative expenses for the three-month period ended December 31, 2021 increased by $1,352,519 or 41% to $4,662,173 as compared to $3,309,654 for the three-month period ended December 31, 2020. The increase is primarily attributable to an increase in stock-based compensation expense of $1,128,422 primarily relating to officer stock option grants that vested immediately, as well as to the annual non-employee board of director grant that vests one-year from the date of grant. The remainder of the increase relates to an increase in the Company’s Directors and Officers insurance policy premiums.
Research and Development
Research and development expenses increased to $1,080,096 for the three-month period ended December 31, 2021 from $763,808 for the three-month period ended December 31, 2020, an increase of $316,288 or 41%. This increase is primarily due to increased outsourced service contracts of approximately $90,000, as well as increased payroll of approximately $96,000 and to a lesser extent depreciation expense and laboratory supplies. These increases were to support our continued research and development efforts, primarily related to our ongoing animal vaccine study, as well as next generation sequencing projects.
Interest expense, net
Interest income (expense), net for the three-month period ended December 31, 2021, represented income of $273 as compared to an expense of $5,438 in the three-month period ended December 31, 2020.
Other income (expense)
Other income (expense) for the three-month periods ended December 31, 2021 and 2020, was expense of $88,053 and $53,860, respectively. The increase of $34,193 is due to an increase in royalty expense during the three-month period ended December 31, 2021.
Loss on Extinguishment of Debt
Loss on extinguishment of debt of $1,774,662 for the three-months ended December 31, 2020 relates to the repayment of the $1.5 million of secured convertible notes issued in July 2019 pursuant to a letter agreement with Dillon Hill Capital, LLC (the “July 2019 Notes”). The loss on extinguishment represents the difference between the fair value of the July 2019 Notes, including the fair value of the Replacement Warrants issued, on the repayment date compared to their carrying value.
Net Loss
Net loss decreased $86,151, or 2%, to $4,720,911 for the three-month period ended December 31, 2021 compared to $4,807,062 for the three-month period ended December 31, 2020 due to the factors noted above.
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Liquidity and Capital Resources
Our liquidity needs consist of our working capital requirements and research and development expenditure funding. As of December 31, 2021, we had working capital of $5,520,530. For the three-month period ended December 31, 2020, we used cash in operating activities of $3,701,894 consisting primarily of our loss of $4,720,911 net with non-cash adjustments of $320,751 in depreciation and amortization charges, $1,699,920 in stock-based compensation expense and $10,000 of bad debt expenses. Additionally, we had a net increase in operating assets of $1,018,201 and a net increase in operating liabilities of $6,547. Cash used in investing activities of $104,686 was for the purchase of property and equipment.
We have recurring net losses, which have resulted in a net loss of $4,720,911 and generated negative operating cash flow of $3,701,894 for the three-month period ended December 31, 2021. These factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Inflation
The effect of inflation on our revenue and operating results was not significant.
Item 3. — Quantitative and Qualitative Disclosures About Market Risk.
Information requested by this Item is not applicable as we are electing scaled disclosure requirements available to smaller reporting companies with respect to this Item.
Item 4. — Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, we conducted an evaluation, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the fiscal quarter ended December 31, 2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II - Other Information
Item 1. — Legal Proceedings.
None.
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Item 1A. — Risk Factors.
None.
Item 2. — Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. — Defaults Upon Senior Securities.
None.
Item 4. — Mine Safety Disclosures.
Not applicable.
Item 5. — Other Information.
None.
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Item 6. — Exhibits.
Incorporated by Reference to SEC Filing | Filed with | |||||||||||
Exhibit | Exhibit | this Form | ||||||||||
No. |
| Filed Exhibit Description |
| Form |
| No. |
| File No. |
| Date Filed |
| 10-Q |
X | ||||||||||||
X | ||||||||||||
X | ||||||||||||
X | ||||||||||||
101 INS* | XBRL Instance Document | X | ||||||||||
101 SCH* | XBRL Taxonomy Extension Schema Document | X | ||||||||||
101 CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||
101 DEF* | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||
101 LAB* | XBRL Extension Label Linkbase Document | X | ||||||||||
* Filed herewith
** Furnished herewith
Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in any such filing.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Applied DNA Sciences, Inc. |
|
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Dated: February 10, 2022 | /s/ JAMES A. HAYWARD |
| James A. Hayward, Ph.D. |
| Chief Executive Officer |
| (Duly authorized officer and principal executive officer) |
|
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| /s/ BETH JANTZEN |
Dated: February 10, 2022 | Beth Jantzen, CPA |
| Chief Financial Officer |
| (Duly authorized officer and principal financial and accounting officer) |
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