STONY BROOK, NY - Applied DNA Sciences, Inc. (NASDAQ:APDN), a company engaged in PCR-based DNA technologies, has disclosed the pricing of a securities offering expected to generate approximately $6.5 million before fees and expenses. The transaction includes a direct offering and a concurrent private placement of common stock and warrants.
The company's offering consists of over 20 million shares of common stock, or equivalent pre-funded warrants, at $0.32 each. Additionally, investors will receive Series C Warrants, exercisable at the same price, with a five-year term post-stockholder approval, and Series D Warrants with an 18-month term and a cashless exercise option. The exercise price for Series D Warrants is subject to adjustment in the event of a reverse stock split.
This offering, expected to close around October 31, 2024, is contingent on customary closing conditions. Craig-Hallum is the exclusive placement agent for the offering.
Proceeds from this offering are slated for the development of Applied DNA's Therapeutic DNA Production Services and general corporate purposes. This may include research and development, capital expenditures, working capital, strategic restructuring costs, and administrative expenses.
The shares and pre-funded warrants are being offered pursuant to an effective registration statement filed with the SEC. The final prospectus related to the offering will be available on the SEC's website, and copies can be obtained from Craig-Hallum Capital Group.
The warrants and underlying shares in the private placement have not been registered under the Securities Act, and thus, cannot be offered or sold in the U.S. without registration or an applicable exemption from registration requirements.
Applied DNA Sciences specializes in the production and detection of DNA using PCR technology, catering to markets including nucleic acid-based therapeutics, molecular diagnostics, and supply chain security.
This announcement is based on a press release statement and does not constitute an offer to sell the securities.
In other recent news, Applied DNA Sciences has experienced a series of significant developments. The company's shareholders approved several key proposals, including the election of directors, the ratification of the company's independent auditor, Marcum LLP, and the potential for a reverse stock split. The firm also secured a $500,000 order for its Linea DNA product, continuing a long-term partnership with a global in vitro diagnostics manufacturer.
Applied DNA Sciences has expanded its clinical testing services to detect both Clade I and Clade II of the Mpox virus. The company also received a subcontract to support cotton traceability in Pakistan, aimed at reducing child and forced labor in global supply chains. Additionally, the company submitted a validation package to the New York State Department of Health for expanded use of its Linea Mpox Virus 1.0 Assay.
In partnership developments, Applied DNA Sciences joined forces with Indus Group, incorporating the CertainT traceability platform into Indus's non-home textile products. However, analyst firm H.C. Wainwright lowered their price target for Applied DNA Sciences shares, while maintaining a Buy rating. Finally, the company received approval from the New York State Department of Health for its pharmacogenomic testing service, TR8, and plans to implement a reverse stock split to comply with Nasdaq's listing rules. These are recent developments in the company's operations.
InvestingPro Insights
As Applied DNA Sciences (NASDAQ:APDN) moves forward with its $6.5 million securities offering, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at a modest $3.27 million, reflecting its current position in the biotechnology sector.
InvestingPro data reveals that APDN's revenue for the last twelve months as of Q3 2024 was $3.4 million, with a concerning revenue growth decline of -78.96% over the same period. This aligns with one of the InvestingPro Tips, which notes that analysts anticipate a sales decline in the current year. The significant revenue contraction may explain the company's need for additional funding through this securities offering.
Another relevant InvestingPro Tip indicates that APDN holds more cash than debt on its balance sheet, which could be seen as a positive factor for potential investors in this offering. However, it's crucial to note that the company is also "quickly burning through cash," which likely necessitates this capital raise to support its ongoing operations and development initiatives.
The stock's recent performance has been challenging, with InvestingPro data showing a one-month price total return of -51.19% and a staggering year-to-date decline of -97.43%. This poor stock performance is further emphasized by an InvestingPro Tip stating that the stock has "fared poorly over the last month" and has "taken a big hit over the last six months."
For investors considering this offering, it's worth noting that InvestingPro provides 15 additional tips for APDN, offering a more comprehensive analysis of the company's financial health and market position. These insights could be valuable in assessing the potential risks and opportunities associated with this investment.
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