APPLIED DNA SCIENCES INC
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
BNBX$0.16-56.8%Stored close · as of Jul 13, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-13.
0001410578-25-000126
Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001410578-25-001320
Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 130 current paragraphs.
70 unchanged; 20 reworded; 36 added; 8 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 55 previous and 55 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
ADCL currently has the ability to offer testing services for pharmacogenomics, COVID-19 and mpox. On March 26, 2025, ADCL submitted a validation package to NYSDOH to expand its testing services to the detection and subtyping of influenza A (H5) virus, also known as H5 bird flu.
Current report
On March 26, 2025 we announced that ADCL had submitted a validation package to the NYSDOH to request approval as a laboratory-developed test (LDT) for a PCR-based assay for the detection and subtyping of influenza A (H5) virus, also known as H5 bird flu, highly pathogenic avian influenza, or H5N1 (collectively “H5 bird flu”). ADCL’s Linea™ Avian Influenza H5 Dx assay (“AIH5 Dx”) is a highly sensitive, multi-target diagnostic assay capable of detecting and discriminating between pan-influenza A and H5 bird flu. The timeline for NYSDOH’s review of the Company’s validation package is unknown, as is whether such approval will be granted. No testing for H5 bird flu can be performed by ADCL until full approval is received from NYSDOH. Further, there can be no assurance that we will be able to generate revenue and profits if and when NYSDOH approval of our test for H5 bird flu is granted.
Current report
For the three-month periods ended March 31, 2025 and 2024, we generated $548,638 and $393,125 in revenues from product sales, respectively. Product revenues increased by $155,513 or 40% for the three-month period ended March 31, 2025 as compared to the three-month period ended March 31, 2024. The increase in product revenues was primarily related to an increase of approximately $161,000 due to the timing of orders from our large-scale DNA manufacturing business within our Therapeutic DNA Production Services segment.
Current report
Selling, general and administrative expenses for the three-month period ended March 31, 2025 decreased by $16,924 or 1% to $2,983,284 as compared to $3,000,208 for the three-month period ended March 31, 2024. The decrease is attributable to a decrease in deferred offering costs incurred for the ATM transaction that were written off during the prior fiscal year period when the ATM facility was terminated of $217,000, as well as a decrease in stock-based compensation expense of approximately $144,000. These decreases were offset by increases in expenses related to the March 2025 Reverse Split and the special stockholders’ meetings and adjournments of approximately $113,000, and an increase of approximately $140,000 in franchise taxes.
Current report
Research and development expenses decreased to $849,358 for the three-month period ended March 31, 2025 from $913,194 for the three-month period ended March 31, 2024, a decrease of $63,836 or 7%. This decrease was attributable to decreased payroll charges of $51,000 as well as decreased consulting charges of $35,190 relating to a development project during the prior three-month period within the Therapeutic DNA Production Services segment, as well as a net decrease in service contracts of approximately $16,000. These decreases were offset by an increase in laboratory supplies of approximately $71,000 for the development of an enzyme within our Therapeutic DNA Production Services segment.
Current report
Transaction costs allocated to warrant liabilities
Current report
Transaction cost allocated to warrant liabilities for the three-month period ended March 31, 2024 were $633,198. These transaction costs represent the closing costs from the February 2024 financing transaction. These costs were expensed as it would have resulted in negative additional paid in capital.
Current report
Unrealized loss on change in fair value of warrants classified as a liability-warrant modification
Current report
Unrealized loss on change in fair value of warrants classified as a liability-warrant modification of $394,000 for the three-month period ended March 31, 2024 represents the change in fair value for the modifications made to certain warrants as a result of the February 2024 financing transaction.
Current report
Loss on issuance of warrants
Current report
The loss on issuance of warrants of $1,633,767 for the three-month period ended March 31, 2024 relates to the February 2024 financing transaction and is the result of the fair value of the warrants being greater than the cash received from the financing.
Current report
Other (expense) income, net
Current report
Other (expense) income, net for the three-month periods ended March 31, 2025 and 2024, was expense of $3,095 and income of $4,581, respectively.
Current report
Revenues
Current report
Service revenues
Current report
For the six-month periods ended March 31, 2025 and 2024 we generated $588,628 and $452,633 in revenues from sales of services, respectively. The increase in service revenues of $135,995 or 30% for the six-month period ended March 31, 2025, as compared to the same period in the prior fiscal year is attributable to increases of approximately $193,000 for isotopic testing services for textiles within our DNA Tagging and Security Products and Services segment, offset primarily by a decrease of approximately $35,000 related to research and development projects within our Therapeutic DNA Production Services segment.
Current report
Clinical laboratory service revenues
Current report
For the six-month periods ended March 31, 2025 and 2024, we generated $546,878 and $667,720 in revenues from our clinical laboratory testing services, respectively. The decrease in clinical laboratory service revenues of $120,842 or 18% for the six-month period ended March 31, 2025 as compared to the same period in the prior fiscal year is attributable to a decrease from COVID testing services, as two customer contracts stopped testing during February, 2025.
Current report
Cost and Expenses
Current report
Gross Profit
Current report
Selling, General and Administrative
Current report
Research and Development
Current report
Research and development expenses remained fairly consistent at $1,864,368 for the six-month period ended March 31, 2025 compared to $1,849,009 for the six-month period ended March 31, 2024, an increase of $15,359 or 1%.
Current report
Interest income
Current report
Interest income for the six-month period ended March 31, 2025 increased $83,104 or 171% to $131,780 as compared to $48,676 in the six-month period ended March 31, 2024 due to interest earned on our money market accounts, which had higher cash balances during the current period.
Current report
Transaction costs allocated to warrant liabilities
Current report
Transaction cost allocated to warrant liabilities for the six-month period ended March 31, 2024 was $633,198. These transaction costs represent the closing costs from the February 2024 financing transaction. These costs were expensed as it would have resulted in negative additional paid in capital.
Current report
Unrealized loss on change in fair value of warrants classified as a liability-warrant modification
Current report
Unrealized loss on change in fair value of warrants classified as a liability-warrant modification of $394,000 for the six-month period ended March 31, 2024 represents the change in fair value for the modifications made to certain warrants as a result of the February 2024 financing transaction.
Current report
Loss on issuance of warrants
Current report
The loss on issuance of warrants of $1,633,767 for the six-month period ended March 31, 2024 relates to the February 2024 financing transaction and is the result of the fair value of the warrants being greater than the cash received from the financing.
Current report
Other (expense) income , net
Current report
Other (expense) income, net for the six-month periods ended March 31, 2025 and 2024, was income of $23,247 and $8,957, respectively.
Current report
Loss from operations
Current report
Loss from operations decreased 981,022, or 13% to $6,425,796 for the six-month period ended March 31, 2025 compared to $7,406,818 for the six-month period ended March 31, 2024 due to the factors noted above.
Current report
Product Revenues
Removed paragraphs (8)
Previous report
All forward-looking statements and risk factors included in this Quarterly Report are made as of the date hereof, based on information available to us as of such date, 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.
Previous report
By leveraging our expertise in both the manufacture and detection of DNA via PCR, our DNA Tagging and Security Products and Services allow our customers to use non-biologic DNA tags manufactured on our LineaDNA platform to mark objects in a unique manner and then identify these objects by detecting the absence or presence of the DNA tag. The Company’s core DNA Tagging and Security Products and Services, which are currently marketed collectively as a platform under the trademark CertainT®, include:
Previous report
To date, our largest commercial application for our DNA Tagging and Security Products and Services is in the tracking and provenance authentication of cotton.
Previous report
As detailed above, on February 13, 2025 the Company announced that it is exiting its DNA Tagging and Security Products and Services business segment. As a result of exiting this business segment, the Company completed a workforce reduction of approximately 20%
Previous report
of its total headcount. The Company will continue to service certain of its existing DNA Tagging and Security Products and Services customer contracts.
Previous report
Research and development expenses increased to $1,015,010 for the three-month period ended December 31, 2024 from $935,815 for the three-month period ended December 31, 2023, an increase of $79,195 or 8%. This increase is primarily due to an increase of approximately $375,000 for the development of an enzyme for use in our Therapeutic DNA Production Services segment, offset by a decrease of approximately $77,000 for consultants being utilized for cGMP readiness during the prior year period. Additional offsets included a decrease in depreciation expense associated with laboratory equipment becoming fully depreciated period over period of approximately $94,000, service contract decreases of $68,000 as well as a payroll expense decrease of approximately $50,000.
Previous report
Other expense, net
Previous report
Other expense, net for the three-month periods ended December 31, 2024 and 2023, was $20,152 and $13,538, respectively.
Reworded paragraphs (20)
Previous wording
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.
Current wording
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 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 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.
Previous wording
We are a biotechnology company developing and commercializing technologies to produce and detect DNA and RNA. Using PCR to enable the production and detection of DNA and RNA, we currently operate in two primary business markets: (i) the enzymatic manufacture of synthetic DNA for use in the production of nucleic acid-based therapeutics (including biologics and drugs), as well as the development and sale of a proprietary RNAP for use in the production of mRNA therapeutics (“Therapeutic DNA Production Services”); and (ii) the detection of DNA and RNA in molecular diagnostics and genetic testing services (“MDx Testing Services”). Previously, we operated in a third business market: the manufacture and detection of DNA for industrial supply chains and security services (“DNA Tagging and Security Products and Services”), which, as detailed above, on February 13, 2025, we announced we were exiting. However, we will continue to service certain of our existing DNA Tagging and Security Products and Services customer contracts.
Current wording
We are a biotechnology company developing and commercializing technologies to produce and detect DNA and RNA. Using PCR to enable the production and detection of DNA and RNA, we currently operate in two primary business markets: (i) the enzymatic manufacture of synthetic DNA for use in the production of nucleic acid-based therapeutics (including biologics and drugs), as well as the development and sale of a proprietary RNAP for use in the production of mRNA therapeutics ; and (ii) the detection of DNA and RNA in molecular diagnostics and genetic testing services. Previously, we operated in a third business market: the manufacture and detection of DNA for industrial supply chains and security services, which, as detailed below, on February 13, 2025, we announced we were exiting.
Previous wording
We will continue to update our business strategy and monitor the use of our resources regarding our various business segments. The Company’s management engaged in a strategic review of its DNA tagging and Security Products and Services business segment. As a result of this strategic review, on February 13, 2025, we announced we are exiting our DNA Tagging and Security Products and Services business segment. As a result of exiting this segment, during January 2025, we completed a workforce reduction of approximately 20% of our total headcount and approximately 13% in annual payroll costs. As a result of these actions, during the three-month period ended March 31, 2025, we will incur one-time personnel-related charges of approximately $300,000. We will continue to service certain of our existing DNA Tagging and Security Products and Services customer contracts. The Company’s management has also been and currently remains engaged in a strategic review of its MDX Testing Services business segment.
Current wording
We will continue to update our business strategy and monitor the use of our resources regarding our various business segments. Our management engaged in a strategic review of our DNA Tagging and Security Products and Services business segment. As a result of this strategic review, on February 13, 2025, we announced we were exiting our DNA Tagging and Security Products and Services business. As a result of exiting this segment, during January 2025, we completed a workforce reduction of approximately 20% of our total headcount and approximately 13% in annual payroll costs. As a result of these actions, during the three-month period ended March 31, 2025 and through April 2025, we incurred one-time personnel-related charges of approximately $305,000. We continue to strategically exit contracts related to our DNA Tagging and Security Products and Services segment pursuant to applicable terms and conditions and currently plan to continue to service certain of our existing DNA Tagging and Security Products and Services customer contracts. The Company’s management has also been and currently remains engaged in a strategic review of its MDx Testing Services business segment.
Previous wording
As of the fourth quarter of calendar year 2024, there were 4,238 gene, cell and RNA therapies in development from preclinical through pre-registration stages, almost all of which use DNA in their manufacturing process. (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q4 2024 Quarterly Report). Due to what we believe are the LineaDNA platform’s numerous advantages over legacy nucleic acid-based therapeutic manufacturing platforms, we believe this large number of therapies under development represents a substantial market opportunity for the LineaDNA platform to supplant legacy manufacturing methods in the manufacture of nucleic acid-based therapies although no assurance can be given that we will be successful in exploiting this market opportunity.
Current wording
As of the first quarter of calendar year 2025, there were 4,418 gene, cell and RNA therapies in development from preclinical through pre-registration stages, almost all of which use DNA in their manufacturing process. (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q1 2025 Quarterly Report). Due to what we believe are the LineaDNA platform’s numerous advantages over legacy nucleic acid-based therapeutic manufacturing platforms, we believe this large number of therapies under development represents a substantial market opportunity for the LineaDNA platform to supplant legacy manufacturing methods in the manufacture of nucleic acid-based therapies although no assurance can be given that we will be successful in exploiting this market opportunity.
Previous wording
We believe the key advantages of the LineaDNA platform include:
Current wording
We believe the key advantages of the Linea DNA platform include:
Previous wording
In August 2022, the Company launched DNA IVT templates manufactured via its LineaDNA platform that have resulted in evaluations of the Company’s IVT templates by numerous therapeutic developers and CDMOs in the United States and the Asia-Pacific. In addition, the Company’s IVT templates are currently under late-stage evaluations by two therapeutic developers and one CDMO for use as DNA templates for the production of mRNA intended for clinical use in calendar year 2025. However, there can be no assurance that related contracts will be entered into. In response to this demand, the continued growth of the mRNA therapeutic market, and the unique abilities of the LineaDNA platform, the Company acquired Spindle Biotech, Inc. (“Spindle”) in July 2023 to potentially increase its mRNA-related total addressable market (“TAM”) to include the manufacture and sale of RNAP for use in conjunction with our LineaDNA IVT templates.
Current wording
The number of mRNA therapies under development is growing at a rapid rate, thanks in part to the success of the mRNA COVID-19 vaccines. mRNA therapeutics are produced via a process called in vitro transcription (“IVT”) that requires DNA as a starting material. As of the first quarter of calendar 2025, there were over 450 mRNA therapies under development, with the majority of these therapies (65%) in the preclinical stage (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q1 2025 Quarterly Report). The Company believes that the mRNA market is in a nascent stage that represents a large growth opportunity for the Company via the production and supply of DNA critical starting materials and RNAP to produce mRNA therapies. In August 2022, the Company launched DNA IVT templates manufactured via its LineaDNA platform that have resulted in evaluations of the Company’s IVT templates by numerous therapeutic developers and CDMOs in the United States and the Asia-Pacific. The Company is currently producing research use only IVT templates for CDMOs located in the United States and Japan. However, there can be no assurance that the Company will enter into related long-term contracts. In response to this perceived demand, the continued growth of the mRNA therapeutic market, and the unique abilities of the LineaDNA platform, the Company acquired Spindle Biotech, Inc. (“Spindle”) in July 2023 to potentially increase its mRNA-related total addressable market (“TAM”) to include the manufacture and sale of RNAP for use in conjunction with our LineaDNA IVT templates.
Previous wording
According to the Company’s internal modeling, the ability to sell both LineaDNA IVT templates and Linea RNAP under the Linea IVT platform potentially increases the Company’s mRNA-related TAM by approximately 3x as compared to selling LineaDNA IVT templates alone, while also providing a more competitive offering to the mRNA manufacturing market. Currently, Linea RNAP is produced for the Company under an ISO 13485 quality system by Alphazyme, LLC (“Alphazyme”) a third-party CDMO located in the United States, which the Company believes is sufficient for early-stage clinical use of the enzyme. In conjunction with Alphazyme, the Company recently completed manufacturing process development work on its Linea RNAP to increase the production scale of the enzyme and reduce unit costs.
Current wording
According to the Company’s internal modeling, the ability to sell both Linea DNA IVT templates and Linea RNAP under the Linea IVT platform potentially increases the Company’s mRNA-related TAM by approximately 3x as compared to selling LineaDNA IVT templates alone, while also providing a more competitive offering to the mRNA manufacturing market. Currently, Linea RNAP is produced for the Company under an ISO 13485 quality system by Alphazyme, LLC (“Alphazyme”) a third-party CDMO located in the United States, which the Company believes is sufficient for early-stage clinical use of the enzyme. In conjunction with Alphazyme, the Company completed in calendar year 2024 manufacturing process and scale-up development work on its Linea RNAP to increase production scale of the enzyme and reduce costs.
Previous wording
Through ADCL, we leverage our expertise in DNA and RNA detection via PCR to provide and develop clinical molecular diagnostics and genetic (collectively “MDx”) Testing Services. ADCL is a NYSDOH clinical laboratory improvement amendments (“CLIA”)-certified laboratory which is currently permitted for virology and genetics (molecular). In providing MDx Testing Services, ADCL employs its own or third-party molecular diagnostic tests.
Current wording
Through ADCL, we leverage our expertise in DNA and RNA detection via PCR to provide and develop clinical molecular diagnostics and genetic testing services. ADCL is a NYSDOH clinical laboratory improvement amendments (“CLIA”)-certified laboratory which is currently permitted for virology and genetics (molecular). In providing MDx Testing Services, ADCL employs its own or third-party molecular diagnostic tests.
Previous wording
On June 12, 2024 we received full approval from NYSDOH for our PGx Testing Services. Recently published studies showed that population-scale PGx enabled medication management can significantly reduce overall population healthcare costs, reduce adverse drug events, and increase overall population wellbeing. These benefits can result in significant cost savings to large entities and self-insured employers, the latter accounting for approximately 65% of all U.S. employers in 2022.We plan to leverage our PGx Testing Services to provide PGx testing services to large entities, self-insured employers and healthcare providers, as well as concierge healthcare providers.
Current wording
On June 12, 2024 we received full approval from NYSDOH for our PGx Testing Services. Recently published studies showed that population-scale PGx enabled medication management can significantly reduce overall population healthcare costs, reduce adverse drug events, and increase overall population wellbeing. These benefits can result in significant cost savings to large entities and self-insured employers, the latter accounting for approximately 65% of all U.S. employers in 2022.We plan to leverage our PGx Testing Services to provide PGx testing services to large entities, self-insured employers and other types of healthcare providers. Currently, ADCL is undertaking a strategic review of its commercialization of PGx Testing Services, including, but not limited to creating subpanels for targeted indications.
Previous wording
For the three-month periods ended December 31, 2024 and 2023, we generated $374,444 and $247,147 in revenues from sales of services, respectively. The increase in service revenues of $127,297 or 52% for the three-month period ended December 31, 2024, as compared to the same period in the prior fiscal year is attributable to an increase of $156,000 within our DNA Tagging and Security Products and Services segment due to an increase in our textile isotopic testing services. This increase was offset by a decrease of approximately $18,000 within our Therapeutic DNA Production Services segment due to decreased research and development projects.
Current wording
For the three-month periods ended March 31, 2025 and 2024, we generated $214,184 and $205,486 in revenues from sales of services, respectively. The increase in service revenues of $8,698 or 4% for the three-month period ended March 31, 2025, as compared to the same period in the prior fiscal year is attributable to an increase of $26,000 within our DNA Tagging and Security Products and Services segment due to an increase in our textile isotopic testing services. This increase was offset by a decrease of approximately $17,000 within our Therapeutic DNA Production Services segment due to decreased research and development projects.
Previous wording
For the three-month periods ended December 31, 2024 and 2023, we generated $326,326 and $336,700 in revenues from our clinical laboratory testing services, respectively. The decrease in service revenues of $10,374 or 3% for the three-month period ended December 31, 2024 as compared to the same period in the prior fiscal year is attributable to a decrease in COVID surveillance testing.
Current wording
For the three-month periods ended March 31, 2025 and 2024, we generated $220,552 and $331,020 in revenues from our clinical laboratory testing services, respectively. The decrease in service revenues of $110,468 or 33% for the three-month period ended March 31, 2025 as compared to the same period in the prior fiscal year is attributable to a decrease from COVID surveillance testing, as two customer contracts stopped testing during the three-month period ended March 31, 2025.
Previous wording
Gross profit for the three-month period ended December 31, 2024, increased by $453,010 or 196% from $231,097 for the three-month period ended December 31, 2023 to $684,107. The gross profit percentage was 57% and 26% for the three-month periods ended December 31, 2024 and 2023, respectively. The increase in gross profit percentage was primarily the result of product mix, as during the three-months ended December 31, 2024, the majority of our product revenue was for the shipment of DNA for cotton tagging, which is at a higher gross margin compared to the product sales during the same period in the prior fiscal year. To a lesser extent, the improvement in gross profit percentage was due to higher product revenues during the three-month period ended December 31, 2024 as compared to the same period in the prior fiscal year. The higher volume of product revenues in the current period was able to absorb the fixed costs that are included in cost of product revenues.
Current wording
Gross profit for the three-month period ended March 31, 2025, increased by $75,196 or 25% from $295,651 for the three-month period ended March 31, 2024 to $370,847. The gross profit percentage was 38% and 32% for the three-month periods ended March 31, 2025 and 2024, respectively. The improvement in gross profit percentage was primarily the result of product mix, as during the three-month period ended March 31, 2025, the majority of our product revenue was for the shipment of large-scale DNA production, which is at a higher gross margin compared to the product sales during the same period in the prior fiscal year. To a lesser extent, the improvement in gross profit percentage was due to higher product revenues during the three-month period ended March 31, 2025 as compared to the same period in the prior fiscal year. The higher volume of product revenues in the current period was able to better absorb the fixed costs that are included in cost of product revenues.
Previous wording
Interest income for the three-month period ended December 31, 2024 increased $38,117 or 114% to $71,440 as compared to $33,323 in the three-month period ended December 31, 2023 due to interest earned on our money market accounts.
Current wording
Interest income for the three-month period ended March 31, 2025 increased $44,988 or 293% to $60,340 as compared to $15,352 in the three-month period ended March 31, 2024 due to interest earned on our money market accounts.
Previous wording
Unrealized gain on change in fair value of warrants classified as a liability for the three-month periods ended December 31, 2024 and 2023 was $244,000 and $2,639,000, respectively, which relates to the change in fair value of the warrants that are classified as a liability. The primary driver of the change is the decrease in our stock price.
Current wording
Unrealized gain on change in fair value of warrants classified as a liability for the three-month periods ended March 31, 2025 and 2024 was $68,430 and $1,765,000, respectively, which relates to the change in fair value of the warrants that are classified as a liability. The primary driver of the change is the decrease in our stock price.
Previous wording
Loss from operations decreased $825,065, or 22% to $2,964,001 for the three-month period ended December 31, 2024 compared to $3,789,066 for the three-month period ended December 31, 2023 due to the factors noted above.
Current wording
Loss from operations decreased 155,956, or 4% to $3,461,795 for the three-month period ended March 31, 2025 compared to $3,617,751 for the three-month period ended March 31, 2024 due to the factors noted above.
Previous wording
For the three-month periods ended December 31, 2024 and 2023, we generated $495,847 and $307,317 in revenues from product sales, respectively. Product revenue increased by $188,530 or 61% for the three-month period ended December 31, 2024 as compared to the three-month period ended December 31, 2023. The increase in product revenues was due to a net increase in our DNA Tagging and Security Products and Services segment relating to an increase of approximately $174,000 year over year in cotton DNA tagging revenue, offset by a decrease of approximately $44,000 in sales to a nutraceutical customer. We also experienced an increase of approximately $88,000 relating to our large-scale DNA manufacturing business and the timing of related orders within our Therapeutic DNA Production Services segment.
Current wording
For the six-month periods ended March 31, 2025 and 2024, we generated $1,044,485 and $700,442 in revenues from product sales, respectively. Product revenue increased by $344,043 or 49% for the six-month period ended March 31, 2025 as compared to the same period in the prior fiscal year. The increase in product revenues was primarily within our Therapeutic DNA Production Services segment for an increase in shipments for our large-scale DNA manufacturing business of approximately $249,000, as well as a net increase of approximately $95,000 within our DNA Tagging and Security Products and Services segment primarily attributable to an increase of approximately $233,000 year over year in cotton DNA tagging revenue, offset by a decrease of approximately $87,000 in sales to a nutraceutical customer.
Previous wording
Selling, general and administrative expenses for the three-month period ended December 31, 2024 decreased by $451,250 or 15% to $2,633,098 as compared to $3,084,348 for the three-month period ended December 31, 2023. The decrease is attributable to a decrease in stock-based compensation expense of approximately $312,000, which primarily relates to the timing of the annual non-employee board of director grant that vests one-year from the date of grant, which was granted during the second quarter of fiscal 2023. Additional decreases related to a decrease in consulting expense of approximately $115,000. The decrease in consulting expense was from the closure of our APDN Europe subsidiary within our DNA Tagging and Security Products and Services segment, as well as a decrease in consulting expense from our MDX Testing Services segment.
Current wording
Selling, general and administrative expenses for the six-month period ended March 31, 2025 decreased by $468,175 or 8% to $5,616,382 as compared to $6,084,557 for the six-month period ended March 31, 2024. The decrease is attributable to a decrease in stock-based compensation expense of approximately $455,000, which primarily relates to the timing of the annual non-employee board of director grant that vests one-year from the date of grant, which was granted during the second quarter of fiscal 2023. Additional decreases related to a decrease in consulting expense of approximately $158,000. The decrease in consulting expense was from the closure of our APDN Europe subsidiary within our DNA Tagging and Security Products and Services segment, as well as a decrease in consulting expense from our MDx Testing Services segment. These decreases were offset by an increase in expenses of approximately $168,000 related to the March 2025 Reverse Split and the special stockholders’ meeting and adjournments.
Previous wording
Our liquidity needs consist of our working capital requirements and research and development expenditure funding. As of December 31, 2024, we had working capital of $8,889,342. For the three-month period ended December 31, 2024, we used cash in operating activities of $3,326,074 consisting primarily of our loss of $2,668,713 net with non-cash adjustments of $58,580 in depreciation and amortization charges, $244,000 in unrealized gain on change in fair value of warrants classified as a liability, $28,973 in stock-based compensation expense, and $7,723 in provision for bad debts. Additionally, we had a net increase in operating assets of 372,738 and a net decrease in operating liabilities of $141,188. At December 31, 2024, we had cash and cash equivalents of $9,294,365.
Current wording
Our liquidity needs consist of our working capital requirements and research and development expenditure funding. As of March 31, 2025, we had working capital of $6,536,108. For the six-month period ended March 31, 2025, we used cash in operating activities of $6,511,109 consisting primarily of our loss of $6,004,833 net with non-cash adjustments of $177,255 in depreciation and amortization charges, $312,430 in unrealized gain on change in fair value of warrants classified as a liability, $5,212 in write-off of property and equipment, and $55,484 in stock-based compensation expense. Additionally, we had a net increase in operating assets of $85,999 and a net decrease in operating liabilities of $351,221. At March 31, 2025, we had cash and cash equivalents of $6,823,260.
Previous wording
We have recurring net losses. We incurred a net loss of $2,668,713 and generated negative operating cash flow of $3,326,074 for the three-month period ended December 31, 2024. These factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of these financial statements. The ability of the Company to continue as a going concern is dependent on our ability to further implement our business plan, raise capital, and generate revenues. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Current wording
We have recurring net losses. We incurred a net loss of $6,004,833 and generated negative operating cash flow of $6,511,109 for the six-month period ended March 31, 2025. These factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of these financial statements. The ability of the Company to continue as a going concern is dependent on our ability to further implement our business plan, raise capital, and generate revenues. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Previous wording
As requirement of our lease agreement for our corporate headquarters entered into during January 2023, in lieu of security deposit, we provided a standby letter of credit of $750,000. The letter of credit is effective through January 2026.
Current wording
As a requirement of our lease agreement for our corporate headquarters entered into during January 2023, in lieu of security deposit, we provided a standby letter of credit of $750,000. The letter of credit is effective through January 2026.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Comparison of Results of Operations for the Six-Month Periods Ended March 31, 2025 and 2024
Current report — wording carried from elsewhere
Gross profit for the six-month period ended March 31, 2025, increased by $528,206 or 100% from $526,748 for the six-month period ended March 31, 2024 to $1,054,954. The gross profit percentage was 48% and 29% for the six-month periods ended March 31, 2025 and 2024, respectively. The increase in gross profit percentage was primarily the result of higher product revenues during the six-month period ended March 31, 2025 as compared to the same period in the prior fiscal year. The higher volume of product revenues in the current period was able to better absorb the fixed costs that are included in cost of product revenues. To a lesser extent, the improved gross profit percentage was due to product mix, as during the six-months ended March 31, 2025, the majority of our product revenue was for the shipment of DNA for cotton tagging within our DNA Tagging and Security Products and Services segment, which is at a higher gross margin compared to the product sales during the same period in the prior fiscal year.
Current report — wording carried from elsewhere
Unrealized gain on change in fair value of warrants classified as a liability
Current report — wording carried from elsewhere
Unrealized gain on change in fair value of Common Warrants for the six -month period ended March 31, 2025 and 2024 was $312,430 and $4,404,000, respectively, and relates to the change in fair value of the warrants that are classified as a liability. The primary driver of the change is the decrease in our stock price.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The number of mRNA therapies under development is growing at a rapid rate, thanks in part to the success of the mRNA COVID-19 vaccines. mRNA therapeutics are produced via a process called in vitro transcription (“IVT”) that requires DNA as a starting material. As of the fourth quarter of calendar 2024, there were over 450 mRNA therapies under development, with the majority of these therapies (65%) in the preclinical stage (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q4 2024 Quarterly Report). The Company believes that the mRNA market is in a nascent stage that represents a large growth opportunity for the Company via the production and supply of DNA critical starting materials and RNAP to produce mRNA therapies.
Previous report — wording carried elsewhere
DNA Tagging and Security Products and Services