Applied DNA Sciences, Inc.

Good day and welcome to the Applied DNA Sciences Fiscal Fourth Quarter 2023 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Sanjay Hari, Head of Investor Relations. Please go ahead.

Thank you, Vishnabi. Good afternoon, everyone, and welcome to Applied DNA's conference call to discuss our fourth quarter fiscal 2023 financial results. You can access the press release that was issued after market closed today, as well as the slide presentation accompanying this call on the investor relations section of our corporate website. Speaking on the call today are Dr. James Hayward, our chairman, president, and CEO, Beth Jansen, our CFO, and Clay Chirac, our chief legal officer and head of business development. Judy Mara, our COO, will also be available to answer questions on the Q&A portion of today's call. Before we begin, please note that some of the information you will hear today during our discussion may consist of forward-looking statements. I refer you to slide two of the presentation and our Form 10-K filed a short while ago for important risk factors that could cause the company's actual performance and results to differ materially from those expressed or implied in any forward-looking statements. We undertake no obligation to update or revise any forward-looking statements or other information provided on this call as a result of new information or future results or developments. Now, it's my pleasure to introduce our first speaker on today's call, Beth Jansen. Please go ahead, Beth.

Thank you, Sanjay. Good afternoon, everyone. Thank you for joining us on our fiscal fourth quarter investor call. I will start this afternoon with an overview of our results for the quarter ended September 30th, 2023. I will then turn the call over to Dr. James Hayward, our President and CEO, who will update you on our ongoing business initiatives. We will then open the line for questions from our analysts and institutional investors. To preface the year-over-year comparison of our fiscal 23 fourth quarter results, I highlight that the year-ago period included robust COVID-19 testing-related revenues, as well as a cotton-tagging revenue that are not present in the quarter being reported today. the cotton order for the current ginning season was received and shipped subsequent to 930. As Clay and Jim will speak to later, fiscal 2023 was an important building year for the company that we believe lays the foundation for our future growth in the manufacturing of DNA for biotherapeutic applications. With this as a backdrop, Total revenues for the quarter ended September 30th, 2023 were 780,000 compared to 3.6 million for the same period last year. The decrease in revenue of approximately 2.8 million was due to unexpected decline in COVID-19 testing services revenue of 2.4 million, driven primarily by the expiry of our testing contract with the City University of New York in June 2023. The decrease was also due to a reduction in product revenue of $341,000. The decline in product revenue is primarily related to a decrease year-over-year in cotton tagging revenues within our textiles vertical. Growth profit was $79,000, or 10%, compared to 417,000 or 12% in the prior fiscal period. The decline in gross margin was primarily due to a higher percentage of COVID-19 testing services and textiles revenue in the three months ended September 30th, 22 that generated a higher gross profit compared to the three months ended September 30th, 2023. Total operating expenses decreased to 4.2 million compared to 4.7 million in the prior fiscal year period, reflecting an approximate $445,000 decrease in SG&A expenses. The decrease in SG&A is mainly due to a reduction in payroll expenses of approximately $341,000. To a lesser extent, The decrease is due to a decline in insurance expense of $139,000. This decrease in SG&A was offset by a small increase in R&D expenses of approximately $26,000. With the unrealized gain on the change in warrant fair values classified as a liability that are included in our net loss line, we highlight operating loss as best representing the company's operations. Our operating loss for Q4 23 was 4.2 million compared to 4.3 million in the prior fiscal period. Excluding non-cash expenses, adjusted EBITDA remained relatively flat at a negative 3.5 million compared to a negative 3.4 million in the prior fiscal year. Turning to our balance sheet, Cash and cash equivalents totaled $7.2 million on September 30, compared to $10.8 million on June 30. As of September 30, our accounts receivable balance stood at $256,000, the majority of which has been subsequently collected. For the fiscal year, our average monthly cash burn was $672,000, compared to $786,000 in the prior year. Our average monthly cash burn for the fourth quarter of fiscal 23 was $1.2 million, and largely in line with our forecasted post-CUNY contract expiry estimate. Our cash position on November 30th was approximately $4.5 million. As you will hear in greater detail from Jim and Clay, Our need for growth capital is clear and necessary to support our biotherapeutic manufacturing first growth strategy. To that end, we are working closely with our board to explore all options to obtain the necessary growth capital, the first stage of which was concluded in November of this year via the filing of an equity distribution agreement and prospective supplements to empower an at-the-market facility grounded in our expectation for milestone-driven fiscal 2024. To date, we have issued approximately 29,000 shares for net proceeds of about 26,000 under the ATM. Before concluding my remarks, I note that our just-filed Form 10-K includes a disclosure from our prior Form 10-Q of a substantial doubt of a going concern. Our ability to alleviate the going concern is dependent on our ability to further implement our business plan and generate revenues or raise capital. Finally, yesterday we filed an 8-K disclosing a notification letter received earlier this week informing us that we were not in compliance with NASDAQ listing rules that require listed securities to maintain a minimum bid price of $1 per share. For NASDAQ listing rules, we have 180 calendar days in which to regain compliance. If at any time during this 180-day period the closing bid price of the company's security is at least $1 for a minimum of 10 consecutive business days, we would be considered in compliance. Also, we may be eligible for an extension of 180 calendar days if we do not regain compliance within the first 180 calendar days allotted to us. This concludes my prepared remarks. Thank you for joining us today. I will now turn the call over to Jim for his comments.