Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2018 | Feb. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | APPLIED DNA SCIENCES INC | |
Entity Central Index Key | 744,452 | |
Trading Symbol | apdn | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,362,057 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,137,844 | $ 1,659,564 |
Accounts receivable, net of allowance of $4,500 and $13,133 at December 31, 2018 and September 30, 2018, respectively | 614,764 | 1,485,938 |
Inventories | 225,289 | 221,369 |
Prepaid expenses and other current assets | 622,157 | 635,174 |
Total current assets | 4,600,054 | 4,002,045 |
Property and equipment, net | 369,130 | 419,774 |
Other assets: | ||
Deposits | 62,362 | 62,325 |
Goodwill | 285,386 | 285,386 |
Intangible assets, net | 831,845 | 864,203 |
Total Assets | 6,148,777 | 5,633,733 |
Current liabilities: | ||
Accounts payable and accrued liabilities (including related party interest of $20,244 and $5,844 at December 31, 2018 and September 30, 2018, respectively) | 1,357,712 | 965,167 |
Deferred revenue | 1,375,496 | 1,856,693 |
Total current liabilities | 2,733,208 | 2,821,860 |
Long term accrued liabilities | 508,426 | 470,739 |
Secured convertible notes payable, net of debt issuance costs (including related party interest of $1,142,716 and $1,139,490 at December 31, 2018 and September 30, 2018, respectively) | 2,141,122 | 1,586,631 |
Total liabilities | 5,382,756 | 4,879,230 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, value | ||
Common stock, par value $0.001 per share; 500,000,000 shares authorized; 35,612,057 and 30,112,057 shares issued and outstanding as of December 31, 2018 and September 30, 2018, respectively | 35,612 | 30,112 |
Additional paid in capital | 251,837,589 | 249,090,474 |
Accumulated deficit | (251,107,180) | (248,366,083) |
Total stockholders' equity | 766,021 | 754,503 |
Total Liabilities and Stockholders' Equity | 6,148,777 | 5,633,733 |
Series A Preferred stock | ||
Stockholders' Equity | ||
Preferred stock, value | ||
Series B Preferred stock | ||
Stockholders' Equity | ||
Preferred stock, value |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Allowance on accounts receivable (in dollars) | $ 4,500 | $ 13,133 |
Accounts payable and accrued liabilities, related parties (in dollars) | 20,244 | 5,844 |
Convertible notes payable, related parties (in dollars) | $ 1,142,716 | $ 1,139,490 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 35,612,057 | 30,112,057 |
Common stock, shares outstanding | 35,612,057 | 30,112,057 |
Series A Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||
Total revenues | $ 884,322 | $ 647,677 |
Cost of revenues | 153,485 | 331,440 |
Operating expenses: | ||
Selling, general and administrative | 3,082,380 | 2,593,154 |
Research and development | 709,564 | 740,067 |
Depreciation and amortization | 135,052 | 157,648 |
Total operating expenses | 3,926,996 | 3,490,869 |
LOSS FROM OPERATIONS | (3,196,159) | (3,174,632) |
Other income (expense): | ||
Interest (expense) income, net (including related party interest of $23,470 for the three month period ended December 31, 2018) | (31,611) | |
Other (expense) income, net | (6,550) | (9,080) |
Loss before provision for income taxes | (3,234,320) | (3,183,712) |
Provision for income taxes | 0 | 0 |
NET LOSS | $ (3,234,320) | $ (3,183,712) |
Net loss per share-basic and diluted (in dollars per share) | $ (0.11) | $ (0.12) |
Weighted average shares outstanding - Basic and diluted (in shares) | 30,470,753 | 27,674,340 |
Product revenues | ||
Revenues: | ||
Total revenues | $ 321,875 | $ 350,133 |
Service revenues | ||
Revenues: | ||
Total revenues | $ 562,447 | $ 297,544 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parentheticals) | 3 Months Ended |
Dec. 31, 2018USD ($) | |
Income Statement [Abstract] | |
Interest (expense) income, related party interest | $ 23,470 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 3 months ended Dec. 31, 2018 - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Sep. 30, 2018 | $ 30,112 | $ 249,090,474 | $ (248,366,083) | $ 754,503 |
Balance (in shares) at Sep. 30, 2018 | 30,112,057 | 30,112,057 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common stock issued in public offering, net of offering costs | $ 5,500 | 2,256,871 | $ 2,262,371 | |
Common stock issued in public offering, net of offering costs (in shares) | 5,500,000 | |||
Impact of adoption of new accounting pronouncements included in accumulated deficit | 493,223 | 493,223 | ||
Stock based compensation expense | 490,244 | 490,244 | ||
Net loss | (3,234,320) | (3,234,320) | ||
Balance at Dec. 31, 2018 | $ 35,612 | $ 251,837,589 | $ (251,107,180) | $ 766,021 |
Balance (in shares) at Dec. 31, 2018 | 35,612,057 | 35,612,057 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (3,234,320) | $ (3,183,712) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 135,052 | 157,648 |
Stock-based compensation expense | 490,244 | 231,113 |
Amortization of debt issuance costs | 4,492 | |
Provision for bad debts | (8,633) | |
Change in operating assets and liabilities: | ||
Accounts receivable | 879,807 | 432,232 |
Inventories | (3,920) | 12,380 |
Prepaid expenses and other current assets and deposits | 6,314 | (173,921) |
Accounts payable and accrued liabilities | 198,713 | (39,737) |
Deferred revenue | 18,583 | (8,775) |
Net cash used in operating activities | (1,513,668) | (2,572,772) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (52,051) | (48,349) |
Net cash used in investing activities | (52,051) | (48,349) |
Cash flows from financing activities: | ||
Net proceeds from secured convertible promissory notes, related parties | 550,000 | |
Net proceeds from sale of common stock and warrants | 2,493,999 | 4,425,893 |
Net cash provided by financing activities | 3,043,999 | 4,425,893 |
Net increase in cash and cash equivalents | 1,478,280 | 1,804,772 |
Cash and cash equivalents at beginning of period | 1,659,564 | 2,959,781 |
Cash and cash equivalents at end of period | 3,137,844 | 4,764,553 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during period for interest | 0 | 0 |
Cash paid during period for income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Property and equipment acquired, and included in accounts payable | 30,247 | |
Impact of adoption of new accounting pronouncements included in accumulated deficit | 493,223 | |
Offering costs incurred, and included in accounts payable | $ 231,520 | $ 192,893 |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | NOTE A — SUMMARY OF ACCOUNTING POLICIES General The accompanying condensed consolidated financial statements as of December 31, 2018 and for the three month periods ended December 31, 2018 and 2017 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 generally accepted accounting principles 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, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019. 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, 2018 and footnotes thereto included in the Annual Report on Form 10-K of Applied DNA Sciences, Inc. (the “Company”) filed with the SEC on December 18, 2018. The condensed consolidated balance sheet as of September 30, 2018 contained herein has been derived from the audited consolidated financial statements as of September 30, 2018, but does not include all disclosures required by GAAP. Business and Basis of Presentation The Company is principally devoted to developing and marketing DNA technology solutions in the United States, Europe and Asia. These solutions are used in, among other things, supply chain security, brand protection and drug and biologic applications. To date, the Company has produced limited recurring revenues from its products and services and has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment and development of a biotechnology company. 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, Applied DNA Sciences India Private Limited, and LineaRx, Inc. (“LRx”). Significant inter-company transactions and balances have been eliminated in consolidation. Inventories Inventories, which consist primarily of raw materials, 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. Revenue Recognition In May 2014, the FASB issued accounting standard updates which clarified principles for recognizing revenue arising from contracts with customers (ASC 606) and superseded most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue standard is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance applies a five-step model for revenue measurement and recognition and also requires increased disclosures including the nature, amount, timing, and uncertainty of revenue and cash flows related to contracts with clients. The Company adopted the new revenue recognition standard at the beginning of the first quarter of fiscal 2019, using the modified retrospective method of adoption and applied the guidance to those contracts that were not completed as of September 30, 2018. Comparative financial information for reporting periods beginning prior to October 1, 2018, has not been restated and continues to be reported under the previous reporting guidance. Under the modified retrospective method of adoption, the cumulative effect of applying the new standard is recorded at the date of initial application, with no restatement of the comparative prior periods presented. Based on the evaluation, the Company has identified certain customer contracts, which will require different recognition under the new guidance. The Company has determined that the revenue under certain of its research and development contracts should be recognized on an overtime cost-to-cost basis as compared to straightline over the contract term. Also, the shipment to the Company’s cotton customer during fiscal 2018 that included extended payment terms and was included in deferred revenue as of September 30, 2018, would have met the criteria under the new guidance to be recognized as revenue upon shipment. The Company has determined that the cumulative effect adjustment to opening retained earnings in fiscal 2019 was approximately $494,000. 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. Under the new accounting guidance, the Company recognizes revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration it expects to receive for those goods or services, including any variable consideration. 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. Impact of Adoption A summary and discussion of such cumulative effect adjustment and the impact on current period financial statements of adopting Topic 606 is as follows: Three months ended December 31, 2018 (unaudited) prior U.S. GAAP Topic 606 impact as reported Statement of Operations Revenues Product $ 704,972 $ (383,097 ) $ 321,875 Service $ 570,075 (7,628 ) 562,447 Total revenues 1,275,047 (390,725 ) 884,322 Cost of revenues 156,818 (3,333 ) 153,485 Loss from operations (2,808,768 ) (387,391 ) (3,196,159 ) Assets Prepaids and other current assets $ 625,490 $ (3,333 ) $ 622,157 Liabilities and stockholder's equity Deferred Revenue $ 1,484,963 $ (109,467 ) $ 1,375,496 Accumulated Deficit (251,001,046 ) (106,134 ) (251,107,180 ) Product Revenues and Authentication Services The Company’s PCR-produced linear DNA products, including molecular taggants 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 does not consider payment terms a performance obligation for customers with contractual terms that are one year or less and has elected the practical expedient. Nearly all of the Company’s sales contracts reflect market pricing at the time the contract is executed, are one year or less, and generally provide for shipment within 30 to 60 days after the price has been agreed upon with the customer. We invoice customers upon shipment, and our collection terms range, on average from 30 to 60 days. The cotton ginning season in the United States takes place between September and March each year; therefore, revenues from these customer contracts may be seasonal and recognized primarily during the first and fourth quarters of the Company’s fiscal year. Authentication Services The Company recognizes revenue for authentication services upon satisfying its promises to 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. Research and Development Services The Company records revenue for its research and development contracts using the over-time revenue recognition model as a customer is invoiced or performance is satisfied. 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 to not 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, 2018 December 31, 2017 Research and development services (over-time) $ 473,178 $ 221,863 Product and authentication services (point-in-time): Supply chain 250,098 69,852 Asset marking 161,046 248,024 Large scale DNA production - 107,938 Total $ 884,322 $ 647,677 Contract balances As of December 31, 2018, 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: Balance sheet classification October 1, 2018 December 31, 2018 $ change Contract liabilities Deferred revenue $ 1,356,502 $ 1,375,496 $ 18,994 For the three months ended December 31, 2018, the Company recognized $329,535 of revenue that was included in Contract liabilities as of October 1, 2018. Use of Estimates The preparation of the financial statements in conformity with 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 complex and subjective estimates include revenue recognition, recoverability of long-lived assets, including the values assigned to goodwill, intangible assets and property and equipment, fair value calculations for stock based compensation, allowance for doubtful accounts 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. 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 carry forwards 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 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. For the three month periods ended December 31, 2018 and 2017, 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, 2018 and 2017 are as follows: 2018 2017 Warrants 18,508,527 12,275,455 Stock options 6,177,214 5,304,411 24,685,741 17,579,866 Stock-Based Compensation The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, 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 employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are 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 718 and, 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 condensed consolidated statements of operations. The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07. 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. The Company’s revenues earned from sale of products and services for the three month period ended December 31, 2018 included an aggregate of 27%, 23%, 14% and 12% from four customers. These customers accounted for approximately 76% of the Company’s total accounts receivable at December 31, 2018. At December 31, 2018, one customer accounted for an aggregate of 67% of the Company’s total accounts receivable. The Company’s revenues earned from sale of products and services for the three month period ended December 31, 2017 included an aggregate of 37%, 22% and 17% from three customers. One customer accounted for 88% of the Company’s total accounts receivable at December 31, 2017. Recent Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”). The amendments in this update clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606. ASU 2018-18 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact of ASU 2018-18 on its condensed consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation – “Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions. This pronouncement is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company early adopted ASU 2018-07 on October 1, 2018 using the modified retrospective transition approach. The cumulative effect adjustment to opening retained earnings was not material. In July 2017, the FASB issued a two-part ASU No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In May 2017, FASB issued ASU 2017-09, Compensation – “Stock Compensation (Topic 718): Scope of Modification Accounting” , In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The purpose of the amendment is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. For public entities, the amendments in ASU 2017-04 are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently assessing the impact of ASU 2017-04 on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements. |
GOING CONCERN AND MANAGEMENT'S
GOING CONCERN AND MANAGEMENT'S PLAN | 3 Months Ended |
Dec. 31, 2018 | |
Going Concern And Managements Plan [Abstract] | |
GOING CONCERN AND MANAGEMENT'S PLAN | NOTE B — GOING CONCERN AND MANAGEMENT’S PLAN The Company has recurring net losses, which have resulted in an accumulated deficit of $251,107,180 as of December 31, 2018. The Company incurred a net loss of $3,234,320 and generated negative operating cash flow of $1,513,668 for the three-month period ended December 31, 2018. The Company also had working capital of $1,866,846 and cash and cash equivalents of $3,137,844 as of December 31, 2018. These factors raise substantial doubt about the Company’s 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. 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. On January 29th and 30th, 2019, the Company received written notices from the Listing Qualifications Department of The NASDAQ Stock Market notifying it that the Company was not in compliance with the minimum bid price requirements as well as the market value of listed securities requirements, or the alternative standards of the Nasdaq listing rule which requires the Company to have minimum stockholders equity of $2.5 million, or for it to have had net income from continuing operations of at least $500 thousand in the latest fiscal year or in two of the three last fiscal years. These notices do not impact the Company’s listing on the Nasdaq Capital market at this time. Both notification letters state that the Company has 180 calendar days, or until July 29, 2019 to regain compliance. There is the possibility for an additional 180-day compliance period for the bid price compliance violation. However, no additional compliance period is applicable to the market value noncompliance. The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse stock split of its outstanding securities, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules. The Company will also consider available options to resolve the other listing deficiencies and regain compliance with all applicable Nasdaq rules. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE C — INVENTORIES Inventories consist of the following: December 31, September 30, (unaudited) Raw materials $ 172,768 $ 147,984 Finished goods 52,521 73,385 Total $ 225,289 $ 221,369 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 3 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE D — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities are as follows: December 31, September 30, (unaudited) Accounts payable $ 944,096 $ 500,849 Accrued salaries payable 266,494 401,130 Other accrued expenses 147,122 63,188 Total $ 1,357,712 $ 965,167 |
SECURED CONVERTIBLE NOTES PAYAB
SECURED CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Dec. 31, 2018 | |
Short-term Debt [Abstract] | |
SECURED CONVERTIBLE NOTES PAYABLE | NOTE E — SECURED CONVERTIBLE NOTES PAYABLE On August 31, 2018, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with accredited investors and certain members of its management team and Board of Directors (the “Purchasers”), pursuant to which the Company issued and sold an aggregate of $1,650,000 in principal amount of secured convertible notes (the “August 31 st st st The August 31 st st st Upon any Change in Control (as defined in the August 31 st st st The August 31 st st The August 31 st st st The Company has also entered into a registration rights agreement, dated as of the date of the Purchase Agreement (the “Registration Rights Agreement”), with the Purchasers, pursuant to which it has agreed to prepare and file a registration statement with the SEC to register under the Securities Act of 1933, as amended (the “Securities Act”) resales from time to time of the common stock issued or issuable upon conversion or redemption of the August 31 st st On November 29, 2018, the Company closed a securities purchase agreement with its chairman, president and chief executive officer and one member of the management team, pursuant to which the Company issued and sold an aggregate of $550,000 in principal amount of secured convertible notes bearing interest at a rate of 6% per annum (the “November 29 th th st th st The Company recorded $64,848 to debt issuance costs based on the cost incurred to complete the financing. During the three month period ended December 31, 2018, the Company amortized $4,492 of debt issuance costs resulting in unamortized debt issuance costs of $58,876 and the secured notes payable of $2,141,122 at December 31, 2018. The debt issuance cost will be amortized over the life of the Notes. During the three month period ended December 31, 2018, the Company incurred approximately $27,120 of interest expense. The effective interest for the three month period ended December 31, 2018 was 7.0%. |
CAPITAL STOCK
CAPITAL STOCK | 3 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STOCK | NOTE F — CAPITAL STOCK On December 21, 2018, the Company entered into an underwriting agreement (the “Agreement”) with Maxim Group LLC (“Maxim”), as the sole underwriter and book running manager, with respect to the issuance and sale of an aggregate of 5,500,000 shares (the “Shares”) of common stock, par value $0.001 per share, together with warrants to purchase an aggregate of 5,500,000 shares of common stock (the “Warrants”) at an exercise price equal to $0.50 per share of common stock (the “Exercise Price”) in an underwritten public offering. The public offering price for each Share together with the accompanying Warrant was $0.50. Pursuant to the Agreement, the Company also granted Maxim a 45-day option to purchase an additional 825,000 Shares and/or additional Warrants to purchase 825,000 Shares to cover any over-allotments made by the underwriters in the sale and distribution of the Shares and Warrants. The gross proceeds of the offering, before deducting underwriter discounts and commissions and other offering expenses, are $2.75 million, or approximately $3.16 million if the underwriters exercise in full their overallotment option. On December 26, 2018, Maxim partially exercised its overallotment option and purchased an additional 800,000 Warrants at a price of $0.0000001 per Warrant. After deducting underwriting fees and other expenses related to the offering, the aggregate net proceeds were approximately $2,262,000. The Warrants are immediately exercisable beginning on the date of issuance (the “Initial Exercise Date”). The Warrants will be exercisable for five years from the Initial Exercise Date, but not thereafter. The Warrants include an adjustment provision that, subject to certain exceptions, reduces their exercise price if the Company issues common stock or common stock equivalents at a price lower than the then-current exercise price of the Warrants, subject to a minimum exercise price of $0.14 per share. The exercise price and number of the shares of the Company’s common stock issuable upon the exercise of the Warrants will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein. In addition, on or after any trading day 75 days after the closing date of the offering, if the daily volume weighted average price of the Company’s common stock fails to exceed the Exercise Price, the aggregate number of warrant shares issuable in a cashless exercise shall equal the product of (i) the aggregate number of warrant shares that would be issuable upon exercise of the Warrants if such exercise were by means of a cash exercise and (ii) 0.70. The offering closed on December 26, 2018. As a result of this financing, the exercise price of the 2,735,000 warrants issued during December 2017 was reduced to an exercise price of $0.44 per share in accordance with the adjustment provision contained in the warrant agreement. The incremental change in fair value of these warrants as a result of the triggering event was insignificant. On January 25, 2019, the Company closed on the underwriters’ partial exercise of its over-allotment option for 500,000 shares of common stock for gross proceeds of $250,000. The total number of common stock and warrants issued under this offering, including the exercise of the over-allotment option was 6,000,000 and 6,300,000, respectively. The gross proceeds to us were $3.0 million and net proceeds after deducting underwriting expenses and other estimated offering expenses was approximately $2.5 million. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE G — STOCK OPTIONS AND WARRANTS Warrants The following table summarizes the changes in warrants outstanding. These warrants were granted in lieu of cash compensation for services performed or financing expenses in connection with the sales of the Company’s common stock. Transactions involving warrants (see Note F) are summarized as follows: Number of Weighted Balance at October 1, 2018 12,208,527 $ 3.24 Granted 9,035,000 0.48 Exercised - - Cancelled or expired (2,735,000 ) 2.00 Balance at December 31, 2018 18,508,527 $ 2.08 Stock Options In 2005, the Board of Directors and the holders of a majority of the outstanding shares of common stock approved the 2005 Incentive Stock Plan (the “Incentive Plan”). The number of shares of common stock that can be issued as stock awards and stock options thereunder is an aggregate of 8,333,333 shares and the number of shares of common stock that can be covered by awards made to any participant in any calendar year is 833,334 shares. The Incentive Plan’s expiration date is January 25, 2025. The Incentive Plan is designed to retain directors, executives, and selected employees and consultants by rewarding them for making contributions to the Company's success with an award of options to purchase shares of common stock. As of December 31, 2018, a total of 275,752 shares have been issued and options to purchase 6,698,115 shares have been granted under the Incentive Plan. Transactions involving stock options issued to employees and consultants are summarized as follows: Number of Weighted Aggregate Weighted Average Contractual Life (Years) Outstanding at October 1, 2018 6,183,214 $ 3.13 Granted 1,246,673 5.53 Exercised - - Cancelled or expired (1,252,673 ) (5.54 ) Outstanding at December 31, 2018 6,177,214 $ 3.13 6.15 Vested at December 31, 2018 5,511,025 $ 3.29 $ - 7.05 Non-vested at December 31, 2018 666,189 $ 1.76 $ - The Company uses the Black Scholes Option Pricing Model to determine the fair value of options granted. The following significant weighted average assumptions in the Black Scholes Option Pricing Model were utilized to estimate the fair value of share based payment awards during the three month periods ended December 31, 2018 and 2017: Three Three Stock price $ 1.32 $ 2.21 Exercise price $ 5.53 $ 1.64 Expected term, years 2.43 8.89 Dividend yield - % - % Volatility 72 % 125 % Risk free rate 2.84 % 2.36 % The Company recorded $490,244 and $231,113 as stock compensation expense for the three-month periods ended December 31, 2018 and 2017, respectively. As of December 31, 2018, unrecorded compensation cost related to non-vested awards was $347,592, which is expected to be recognized over a weighted average period of approximately 0.32 years. The weighted average grant date fair value per share for options granted during the three month period ended December 31, 2018 was $0.15. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE H — 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 30,000 square foot building. The term of the lease commenced on June 15, 2013 and expired on May 31, 2016, with the option to extend the lease for two additional three-year periods. The Company has exercised its option to extend the lease for one additional three-year period ending May 31, 2019. The base rent during the additional three-year period is $458,098 per annum. In addition to the office space, the Company also has 1,500 square feet of laboratory space. The term of the lease commenced on November 1, 2015 and expired on October 31, 2018. Effective November 20, 2017, the Company renewed this lease for one additional year, ending October 31, 2018. This lease is currently month to month. The Company set up a satellite testing facility in Ahmedabad, India during fiscal 2018. On November 17, 2017, it leased 1,108 square feet for a three-year term beginning November 1, 2017. The base rent is approximately $6,500 per annum. Total rent expense for the three month periods ended December 31, 2018 and 2017 were $129,193 and $133,216, respectively. Employment Agreement The Company has an employment agreement with Dr. James Hayward, its Chief Executive Officer (“CEO”) effective July 1, 2016. The initial term was through June 30, 2017, with automatic one-year renewal periods. Under the agreement, the CEO will be eligible for a special cash incentive bonus of up to $800,000, $300,000 of which will be payable if and when annual revenue reaches $8 million and $100,000 of which would be payable for each $2 million of annual revenue in excess of $8 million. The CEO’s annual salary under the agreement was $400,000. Effective May 7, 2016, the CEO’s annual salary was voluntarily reduced by $100,000. Effective May 20, 2017, the CEO’s annual salary was voluntarily reduced by an additional $50,000. Accordingly, his current annual base salary as of December 31, 2018 is $250,000. Effective March 15, 2018, the Compensation Committee of the Company’s Board of Directors, approved a bonus of $121,125 that would be payable to the CEO when the Company reaches $3,000,000 in revenues for two consecutive quarters or $12,000,000 in revenues for a fiscal year, provided that the CEO is still employed by the Company on such date (the “Revenue Bonus”). Effective May 2, 2018, the Compensation Committee of the Company’s Board of Directors, increased the amount of the Revenue Bonus to $403,623. The accrual for the Revenue Bonus of $397,812 is recorded to long term accrued liabilities on the balance sheet as of December 31, 2018. Effective December 27, 2018, the compensation committee approved a bonus opportunity of $150,000 for the calendar year-ended December 31, 2019 that would be payable to the CEO under the same terms as described above. 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. |
GEOGRAPHIC AREA INFORMATION
GEOGRAPHIC AREA INFORMATION | 3 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC AREA INFORMATION | NOTE I – GEOGRAPHIC AREA INFORMATION Net revenues by geographic location of customers are as follows: Three Month Period Ended December 31, 2018 2017 United States $ 567,215 $ 292,730 Europe 150,669 191,827 Asia and other 166,438 163,120 Total $ 884,322 $ 647,677 |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation The Company is principally devoted to developing and marketing DNA technology solutions in the United States, Europe and Asia. These solutions are used in, among other things, supply chain security, brand protection and drug and biologic applications. To date, the Company has produced limited recurring revenues from its products and services and has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment and development of a biotechnology company. 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, Applied DNA Sciences India Private Limited, and LineaRx, Inc. (“LRx”). Significant inter-company transactions and balances have been eliminated in consolidation. |
Inventories | Inventories Inventories, which consist primarily of raw materials, 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. |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued accounting standard updates which clarified principles for recognizing revenue arising from contracts with customers (ASC 606) and superseded most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue standard is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance applies a five-step model for revenue measurement and recognition and also requires increased disclosures including the nature, amount, timing, and uncertainty of revenue and cash flows related to contracts with clients. The Company adopted the new revenue recognition standard at the beginning of the first quarter of fiscal 2019, using the modified retrospective method of adoption and applied the guidance to those contracts that were not completed as of September 30, 2018. Comparative financial information for reporting periods beginning prior to October 1, 2018, has not been restated and continues to be reported under the previous reporting guidance. Under the modified retrospective method of adoption, the cumulative effect of applying the new standard is recorded at the date of initial application, with no restatement of the comparative prior periods presented. Based on the evaluation, the Company has identified certain customer contracts, which will require different recognition under the new guidance. The Company has determined that the revenue under certain of its research and development contracts should be recognized on an overtime cost-to-cost basis as compared to straightline over the contract term. Also, the shipment to the Company’s cotton customer during fiscal 2018 that included extended payment terms and was included in deferred revenue as of September 30, 2018, would have met the criteria under the new guidance to be recognized as revenue upon shipment. The Company has determined that the cumulative effect adjustment to opening retained earnings in fiscal 2019 was approximately $494,000. 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. Under the new accounting guidance, the Company recognizes revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration it expects to receive for those goods or services, including any variable consideration. 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. Impact of Adoption A summary and discussion of such cumulative effect adjustment and the impact on current period financial statements of adopting Topic 606 is as follows: Three months ended December 31, 2018 (unaudited) prior U.S. GAAP Topic 606 impact as reported Statement of Operations Revenues Product $ 704,972 $ (383,097 ) $ 321,875 Service $ 570,075 (7,628 ) 562,447 Total revenues 1,275,047 (390,725 ) 884,322 Cost of revenues 156,818 (3,333 ) 153,485 Loss from operations (2,808,768 ) (387,391 ) (3,196,159 ) Assets Prepaids and other current assets $ 625,490 $ (3,333 ) $ 622,157 Liabilities and stockholder's equity Deferred Revenue $ 1,484,963 $ (109,467 ) $ 1,375,496 Accumulated Deficit (251,001,046 ) (106,134 ) (251,107,180 ) Product Revenues and Authentication Services The Company’s PCR-produced linear DNA products, including molecular taggants 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 does not consider payment terms a performance obligation for customers with contractual terms that are one year or less and has elected the practical expedient. Nearly all of the Company’s sales contracts reflect market pricing at the time the contract is executed, are one year or less, and generally provide for shipment within 30 to 60 days after the price has been agreed upon with the customer. We invoice customers upon shipment, and our collection terms range, on average from 30 to 60 days. The cotton ginning season in the United States takes place between September and March each year; therefore, revenues from these customer contracts may be seasonal and recognized primarily during the first and fourth quarters of the Company’s fiscal year. Authentication Services The Company recognizes revenue for authentication services upon satisfying its promises to 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. Research and Development Services The Company records revenue for its research and development contracts using the over-time revenue recognition model as a customer is invoiced or performance is satisfied. 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 to not 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, Research and development services (over-time) $ 473,178 $ 221,863 Product and authentication services (point-in-time): Supply chain 250,098 69,852 Asset marking 161,046 248,024 Large scale DNA production - 107,938 Total $ 884,322 $ 647,677 Contract balances As of December 31, 2018, 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: Balance sheet classification October 1, December 31, $ Contract liabilities Deferred revenue $ 1,356,502 $ 1,375,496 $ 18,994 For the three months ended December 31, 2018, the Company recognized $329,535 of revenue that was included in Contract liabilities as of October 1, 2018. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with 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 complex and subjective estimates include revenue recognition, recoverability of long-lived assets, including the values assigned to goodwill, intangible assets and property and equipment, fair value calculations for stock based compensation, allowance for doubtful accounts 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. |
Income Taxes | 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 carry forwards 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 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 | 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. For the three month periods ended December 31, 2018 and 2017, 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, 2018 and 2017 are as follows: 2018 2017 Warrants 18,508,527 12,275,455 Stock options 6,177,214 5,304,411 24,685,741 17,579,866 |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, 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 employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are 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 718 and, 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 condensed consolidated statements of operations. The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07. |
Concentrations | 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. The Company’s revenues earned from sale of products and services for the three month period ended December 31, 2018 included an aggregate of 27%, 23%, 14% and 12% from four customers. These customers accounted for approximately 76% of the Company’s total accounts receivable at December 31, 2018. At December 31, 2018, one customer accounted for an aggregate of 67% of the Company’s total accounts receivable. The Company’s revenues earned from sale of products and services for the three month period ended December 31, 2017 included an aggregate of 37%, 22% and 17% from three customers. One customer accounted for 88% of the Company’s total accounts receivable at December 31, 2017. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”). The amendments in this update clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606. ASU 2018-18 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. In June 2018, the FASB issued ASU 2018-07, Compensation – “Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions. This pronouncement is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company early adopted ASU 2018-07 on October 1, 2018 using the modified retrospective transition approach. The cumulative effect adjustment to opening retained earnings was not material. In July 2017, the FASB issued a two-part ASU No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In May 2017, FASB issued ASU 2017-09, Compensation – “Stock Compensation (Topic 718): Scope of Modification Accounting” , In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The purpose of the amendment is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. For public entities, the amendments in ASU 2017-04 are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently assessing the impact of ASU 2017-04 on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements. |
SUMMARY OF ACCOUNTING POLICIE_2
SUMMARY OF ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of cumulative effect adjustment and the impact on current period financial statements of adopting Topic 606 | Three months ended December 31, 2018 (unaudited) prior U.S. GAAP Topic 606 impact as reported Statement of Operations Revenues Product $ 704,972 $ (383,097 ) $ 321,875 Service $ 570,075 (7,628 ) 562,447 Total revenues 1,275,047 (390,725 ) 884,322 Cost of revenues 156,818 (3,333 ) 153,485 Loss from operations (2,808,768 ) (387,391 ) (3,196,159 ) Assets Prepaids and other current assets $ 625,490 $ (3,333 ) $ 622,157 Liabilities and stockholder's equity Deferred Revenue $ 1,484,963 $ (109,467 ) $ 1,375,496 Accumulated Deficit (251,001,046 ) (106,134 ) (251,107,180 ) |
Schedule of operations and timing of revenue recognition | Three Month Period Ended: December 31, December 31, Research and development services (over-time) $ 473,178 $ 221,863 Product and authentication services (point-in-time): Supply chain 250,098 69,852 Asset marking 161,046 248,024 Large scale DNA production - 107,938 Total $ 884,322 $ 647,677 |
Schedule of opening and closing contract balances | Balance sheet classification October 1, December 31, $ Contract liabilities Deferred revenue $ 1,356,502 $ 1,375,496 $ 18,994 |
Schedule of anti-dilutive securities not included computation of net loss per share | 2018 2017 Warrants 18,508,527 12,275,455 Stock options 6,177,214 5,304,411 24,685,741 17,579,866 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | December 31, September 30, (unaudited) Raw materials $ 172,768 $ 147,984 Finished goods 52,521 73,385 Total $ 225,289 $ 221,369 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | December 31, September 30, (unaudited) Accounts payable $ 944,096 $ 500,849 Accrued salaries payable 266,494 401,130 Other accrued expenses 147,122 63,188 Total $ 1,357,712 $ 965,167 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
Schedule of transactions involving warrants | Number of Weighted Balance at October 1, 2018 12,208,527 $ 3.24 Granted 9,035,000 0.48 Exercised - - Cancelled or expired (2,735,000 ) 2.00 Balance at December 31, 2018 18,508,527 $ 2.08 |
Schedule of summary of transactions involving stock options issued to employees | Number of Weighted Aggregate Weighted Average Contractual Life (Years) Outstanding at October 1, 2018 6,183,214 $ 3.13 Granted 1,246,673 5.53 Exercised - - Cancelled or expired (1,252,673 ) (5.54 ) Outstanding at December 31, 2018 6,177,214 $ 3.13 6.15 Vested at December 31, 2018 5,511,025 $ 3.29 $ - 7.05 Non-vested at December 31, 2018 666,189 $ 1.76 $ - |
Schedule of fair value of options granted | Three Three Stock price $ 1.32 $ 2.21 Exercise price $ 5.53 $ 1.64 Expected term, years 2.43 8.89 Dividend yield -% -% Volatility 72 % 125 % Risk free rate 2.84 % 2.36 % |
GEOGRAPHIC AREA INFORMATION (Ta
GEOGRAPHIC AREA INFORMATION (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of net sales by geographic location of customers | Three Month Period Ended December 31, 2018 2017 United States $ 567,215 $ 292,730 Europe 150,669 191,827 Asia and other 166,438 163,120 Total $ 884,322 $ 647,677 |
SUMMARY OF ACCOUNTING POLICIE_3
SUMMARY OF ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Revenues | |||
Total revenues | $ 884,322 | ||
Cost of revenues | 153,485 | ||
Loss from operations | (3,196,159) | $ (3,174,632) | |
Assets | |||
Prepaids and other current assets | 622,157 | $ 635,174 | |
Liabilities and stockholder's equity | |||
Deferred Revenue | 1,375,496 | 1,856,693 | |
Accumulated Deficit | (251,107,180) | $ (248,366,083) | |
Product | |||
Revenues | |||
Total revenues | 321,875 | ||
Service | |||
Revenues | |||
Total revenues | 562,447 | ||
Prior U.S. GAAP | |||
Revenues | |||
Total revenues | 1,275,047 | ||
Cost of revenues | 156,818 | ||
Loss from operations | (2,808,768) | ||
Assets | |||
Prepaids and other current assets | 625,490 | ||
Liabilities and stockholder's equity | |||
Deferred Revenue | 1,484,963 | ||
Accumulated Deficit | (251,001,046) | ||
Prior U.S. GAAP | Product | |||
Revenues | |||
Total revenues | 704,972 | ||
Prior U.S. GAAP | Service | |||
Revenues | |||
Total revenues | 570,075 | ||
Topic 606 impact | |||
Revenues | |||
Total revenues | (390,725) | ||
Cost of revenues | (3,333) | ||
Loss from operations | (387,391) | ||
Assets | |||
Prepaids and other current assets | (3,333) | ||
Liabilities and stockholder's equity | |||
Deferred Revenue | (109,467) | ||
Accumulated Deficit | (106,134) | ||
Topic 606 impact | Product | |||
Revenues | |||
Total revenues | (383,097) | ||
Topic 606 impact | Service | |||
Revenues | |||
Total revenues | $ (7,628) |
SUMMARY OF ACCOUNTING POLICIE_4
SUMMARY OF ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Total | $ 884,322 | $ 647,677 |
Research and development services (over-time) | ||
Disaggregation of Revenue [Line Items] | ||
Total | 473,178 | 221,863 |
Supply chain | ||
Disaggregation of Revenue [Line Items] | ||
Total | 250,098 | 69,852 |
Asset marking | ||
Disaggregation of Revenue [Line Items] | ||
Total | 161,046 | 248,024 |
Large scale DNA production | ||
Disaggregation of Revenue [Line Items] | ||
Total | $ 0 | $ 107,938 |
SUMMARY OF ACCOUNTING POLICIE_5
SUMMARY OF ACCOUNTING POLICIES (Details 2) - Contract liabilities - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | |
Schedule Of Contract Balances [Line Items] | ||
Deferred Revenue | $ 1,375,496 | $ 1,356,502 |
Change in contract liabilities | $ 18,994 |
SUMMARY OF ACCOUNTING POLICIE_6
SUMMARY OF ACCOUNTING POLICIES - Summary of potential stock issuances under various options, and warrants (Details 3) - shares | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 24,685,741 | 17,579,866 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 18,508,527 | 12,275,455 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 6,177,214 | 5,304,411 |
SUMMARY OF ACCOUNTING POLICIE_7
SUMMARY OF ACCOUNTING POLICIES (Detail Textuals) | 3 Months Ended | |
Dec. 31, 2018USD ($)Customer | Dec. 31, 2017Customer | |
Concentration Risk [Line Items] | ||
Cumulative adjustment to opening retained earnings in fiscal 2019 | $ | $ 494,000 | |
Revenue recognized in contract liabilities | $ | $ 329,535 | |
Customer Concentration Risk | Total Revenue | ||
Concentration Risk [Line Items] | ||
Number of customers | Customer | 4 | 3 |
Customer Concentration Risk | Total Revenue | One customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 27.00% | 37.00% |
Customer Concentration Risk | Total Revenue | Two customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 23.00% | 22.00% |
Customer Concentration Risk | Total Revenue | Three customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 14.00% | 17.00% |
Customer Concentration Risk | Total Revenue | Four customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 12.00% | |
Customer Concentration Risk | Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 76.00% | |
Customer Concentration Risk | Accounts Receivable | One customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 67.00% | 88.00% |
Number of customers | Customer | 1 | 1 |
GOING CONCERN AND MANAGEMENT'_2
GOING CONCERN AND MANAGEMENT'S PLAN (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Jan. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Going Concern And Management Plan [Line Items] | |||||
Accumulated deficit | $ 251,107,180 | $ 248,366,083 | |||
Net Loss | (3,234,320) | $ (3,183,712) | |||
Negative operating cash flow | 1,513,668 | 2,572,772 | |||
Working capital | 1,866,846 | ||||
Cash and cash equivalents | $ 3,137,844 | $ 4,764,553 | $ 1,659,564 | $ 2,959,781 | |
Notification letter from listing qualifications department of Nasdaq | Subsequent Event | |||||
Going Concern And Management Plan [Line Items] | |||||
Minimum stockholders' equity | $ 2,500,000 | ||||
Required net income from continuing operations under commodity exchange act | $ 500,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 172,768 | $ 147,984 |
Finished goods | 52,521 | 73,385 |
Total | $ 225,289 | $ 221,369 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Summary of accounts payable and accrued liabilities (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 944,096 | $ 500,849 |
Accrued salaries payable | 266,494 | 401,130 |
Other accrued expenses | 147,122 | 63,188 |
Total | $ 1,357,712 | $ 965,167 |
SECURED CONVERTIBLE NOTES PAY_2
SECURED CONVERTIBLE NOTES PAYABLE (Detail Textuals) | 3 Months Ended | ||
Dec. 31, 2018USD ($)Days$ / shares | Nov. 29, 2018USD ($) | Aug. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Debt issuance costs based on financing | $ 64,848 | ||
Amortization of debt issuance costs | 4,492 | ||
Unamortization of debt issuance costs | 58,876 | ||
Secured notes payable | 2,141,122 | ||
Interest expense | $ 27,120 | ||
Effective interest rate | 7.00% | ||
Common Stock | |||
Debt Instrument [Line Items] | |||
Common stock conversion price | $ / shares | $ 2.50 | ||
Common stock consecutive trading days | Days | 20 | ||
Common stock closing price trading days | $ / shares | $ 3.50 | ||
Securities Purchase Agreement | Accredited investors Management team and Board of Directors | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 1,650,000 | ||
Interest rate | 6.00% | ||
Securities Purchase Agreement | Management and Board of Directors | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 1,185,000 | ||
Securities Purchase Agreement | Chairman, president and chief executive officer and one member of the management team | Convertible notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 550,000 | ||
Interest rate | 6.00% |
CAPITAL STOCK (Detail Textuals)
CAPITAL STOCK (Detail Textuals) - USD ($) | 1 Months Ended | |||
Jan. 25, 2019 | Dec. 21, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | |
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Exercise price of warrants (in dollars per share) | $ 0.44 | |||
Number of warrants outstanding | 18,508,527 | 12,208,527 | ||
Underwriting Agreement | Maxim Group LLC | ||||
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items] | ||||
Number of common stock issued | 5,500,000 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Number of common stock called by warrants | 5,500,000 | |||
Exercise price of warrants (in dollars per share) | $ 0.50 | |||
Public offering price for each share together with warrant | $ 0.50 | |||
Additional number of common stock called by warrants | 825,000 | |||
Gross proceeds of offering before underwriter discounts, commissions and other offering expenses | $ 27,500,000 | |||
Proceeds of offering if underwriters exercise in full their overallotment option | $ 31,600,000 | |||
Number of warrants purchased | 800,000 | |||
Purchase price per warrant (in dollars per warrant) | $ 0.00 | |||
Net proceeds after deducting placement agent fees and offering expenses | $ 2,262,000 | |||
Term of warrants | 5 years | |||
Minimum exercise price | $ 0.14 | |||
Determinant for number of shares issued on exercise of warrants | 0.70 | |||
Number of warrants outstanding | 2,735,000 | |||
Underwriting Agreement | Maxim Group LLC | Over-allotment option | Subsequent Event | ||||
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items] | ||||
Number of aggregate common stock issued including exercise of over-allotment option | 6,000,000 | |||
Gross amount of common stock and warrants issued including exercise of over-allotment option | $ 3,000,000 | |||
Net amount of common stock and warrants issued including exercise of over-allotment option | $ 2,500,000 | |||
Number of common shares issued under underwriters partial exercise of over-allotment option | 500,000 | |||
Amount of common shares issued under underwriters partial exercise of over-allotment option | $ 250,000 | |||
Number of warrants issued including exercise of over-allotment option | 6,300,000 |
STOCK OPTIONS AND WARRANTS - Tr
STOCK OPTIONS AND WARRANTS - Transactions involving warrants (Details) | 3 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Shares | |
Balance at October 1, 2018 | shares | 12,208,527 |
Granted | shares | 9,035,000 |
Exercised | shares | 0 |
Cancelled or expired | shares | (2,735,000) |
Balance at December 31, 2018 | shares | 18,508,527 |
Weighted Average Exercise Price Per Share | |
Balance at October 1, 2018 | $ / shares | $ 3.24 |
Granted | $ / shares | 0.48 |
Exercised | $ / shares | 0 |
Cancelled or expired | $ / shares | 2 |
Balance at December 31, 2018 | $ / shares | $ 2.08 |
STOCK OPTIONS AND WARRANTS - _2
STOCK OPTIONS AND WARRANTS - Transactions involving stock options issued to employees (Details 1) - Employee Stock Option - Incentive Stock Plan 2005 | 3 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at October 1, 2018 | shares | 6,183,214 |
Granted | shares | 1,246,673 |
Exercised | shares | 0 |
Cancelled or expired | shares | (1,252,673) |
Outstanding at December 31, 2018 | shares | 6,177,214 |
Vested at December 31, 2018 | shares | 5,511,025 |
Non-vested at December 31, 2018 | shares | 666,189 |
Weighted Average Exercise Price Per Share | |
Outstanding at October 1, 2018 | $ / shares | $ 3.13 |
Granted | $ / shares | 5.53 |
Exercised | $ / shares | 0 |
Cancelled or expired | $ / shares | (5.54) |
Outstanding at December 31, 2018 | $ / shares | 3.13 |
Vested at December 31, 2018 | $ / shares | 3.29 |
Non-vested at December 31, 2018 | $ / shares | $ 1.76 |
Aggregate Intrinsic Value, Vested | $ | $ 0 |
Aggregate Intrinsic Value, Non-vested | $ | $ 0 |
Weighted Average Contractual Life (years), Outstanding | 6 years 1 month 24 days |
Weighted Average Contractual Life (years), Vested | 7 years 18 days |
STOCK OPTIONS AND WARRANTS - Su
STOCK OPTIONS AND WARRANTS - Summary of value of options granted using Black Scholes Option Pricing Model with weighted average assumptions (Details 2) - $ / shares | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ||
Stock price | $ 1.32 | $ 2.21 |
Exercise price | $ 5.53 | $ 1.64 |
Expected term, years | 2 years 5 months 5 days | 8 years 10 months 21 days |
Dividend yield | 0.00% | 0.00% |
Volatility | 72.00% | 125.00% |
Risk free rate | 2.84% | 2.36% |
STOCK OPTIONS AND WARRANTS - Em
STOCK OPTIONS AND WARRANTS - Employee Stock Options (Detail Textuals) - Employee Stock Option - Incentive Stock Plan 2005 | 3 Months Ended |
Dec. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance of common stock as stock awards and stock options | 8,333,333 |
Issuance of additional common stock as stock awards and stock options | 833,334 |
Cumulative number of shares issued | 275,752 |
Options to purchase shares under the 2005 Incentive stock plan | 6,698,115 |
STOCK OPTIONS AND WARRANTS - _3
STOCK OPTIONS AND WARRANTS - Employee Stock Options (Detail Textuals 1) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ||
Stock-based compensation expense | $ 490,244 | $ 231,113 |
Unrecorded compensation cost related to non-vested awards | $ 347,592 | |
Weighted average period of non-vested awards options | 3 months 26 days | |
Weighted average grant date fair value for options granted | $ 0.15 | $ 0.15 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Detail Textuals) | 1 Months Ended | 3 Months Ended | ||
Nov. 17, 2017USD ($)ft² | Jun. 15, 2013USD ($)ft² | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Commitments and Contingencies [Line Items] | ||||
Area of property under operating lease | ft² | 30,000 | |||
Extended operating lease for additional period | 3 years | |||
Base rent during initial lease term per annum | $ | $ 458,098 | |||
Area of laboratory space | ft² | 1,500 | |||
Total lease rental expenses | $ | $ 129,193 | $ 133,216 | ||
Satellite testing facility | ||||
Commitments and Contingencies [Line Items] | ||||
Lease for satellite testing | ft² | 1,108 | |||
Term lease | 3 years | |||
Base rent | $ | $ 6,500 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Detail Textuals 1) - USD ($) | May 02, 2018 | Mar. 15, 2018 | Dec. 27, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | May 20, 2017 | May 07, 2016 |
Commitments and Contingencies [Line Items] | |||||||
Revenue bonus recorded to long term accrued liabilities | $ 397,812 | ||||||
Employment Agreement | CEO | |||||||
Commitments and Contingencies [Line Items] | |||||||
Annual base salary | $ 250,000 | ||||||
Decrease in amount of salary | $ 50,000 | $ 100,000 | |||||
Approved bonus | $ 121,125 | ||||||
Increase revenue bonus | $ 403,623 | ||||||
Threshold revenue for two consecutive quarters | 3,000,000 | ||||||
Threshold revenue for fiscal year | $ 12,000,000 | ||||||
Bonus payable for year-ended December 31, 2019 | $ 150,000 | ||||||
New Employment Agreement | CEO | |||||||
Commitments and Contingencies [Line Items] | |||||||
Agreement renewal period | 1 year | ||||||
Special cash incentive bonus | $ 800,000 | ||||||
Special cash incentive bonus payable on completing threshold annual revenue | 300,000 | ||||||
Threshold annual revenue | 8,000,000 | ||||||
Special cash incentive bonus payable on completing threshold annual revenue in excess of first threshold | 100,000 | ||||||
Threshold annual revenue in excess of first threshold | 2,000,000 | ||||||
Annual base salary | $ 400,000 |
GEOGRAPHIC AREA INFORMATION (De
GEOGRAPHIC AREA INFORMATION (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total | $ 884,322 | $ 647,677 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total | 567,215 | 292,730 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Total | 150,669 | 191,827 |
Asia and other | ||
Segment Reporting Information [Line Items] | ||
Total | $ 166,438 | $ 163,120 |