Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2022 | Feb. 03, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2022 | |
Entity File Number | 001-36745 | |
Entity Registrant Name | Applied DNA Sciences, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 59-2262718 | |
Entity Address, Address Line One | 50 Health Sciences Drive | |
Entity Address, City or Town | Stony Brook | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11790 | |
City Area Code | 631 | |
Local Phone Number | 240-8800 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | APDN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,908,520 | |
Entity Central Index Key | 0000744452 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 12,877,179 | $ 15,215,285 |
Accounts receivable, net of allowance of $40,831 and $330,853 at December 31, 2022 and September 30, 2022, respectively | 4,053,477 | 3,067,544 |
Inventories | 477,014 | 602,244 |
Prepaid expenses and other current assets | 924,682 | 1,058,056 |
Total current assets | 18,332,352 | 19,943,129 |
Property and equipment, net | 1,865,772 | 2,222,988 |
Other assets: | ||
Deposits | 98,987 | 98,997 |
Total assets | 20,297,111 | 22,265,114 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 3,056,123 | 3,621,751 |
Deferred revenue | 273,880 | 563,557 |
Total current liabilities | 3,330,003 | 4,185,308 |
Long term accrued liabilities | 31,467 | 31,467 |
Warrants classified as a liability | 7,777,200 | 5,139,400 |
Total liabilities | 11,138,670 | 9,356,175 |
Commitments and contingencies | ||
Applied DNA Sciences, Inc. stockholders' equity: | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of December 31, 2022 and September 30, 2022, respectively | 0 | 0 |
Common stock, par value $0.001 per share; 200,000,000 shares authorized as of December 31, 2022 and September 30, 2022, 12,908,520 shares issued and outstanding as of December 31, 2022 and September 30, 2022 | 12,909 | 12,909 |
Additional paid in capital | 305,492,756 | 305,399,008 |
Accumulated deficit | (296,343,460) | (292,500,088) |
Applied DNA Sciences, Inc. stockholders' equity: | 9,162,205 | 12,911,829 |
Noncontrolling interest | (3,764) | (2,890) |
Total equity | 9,158,441 | 12,908,939 |
Total liabilities and equity | 20,297,111 | 22,265,114 |
Series A Preferred stock | ||
Applied DNA Sciences, Inc. stockholders' equity: | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of December 31, 2022 and September 30, 2022, respectively | 0 | 0 |
Series B Preferred stock | ||
Applied DNA Sciences, Inc. stockholders' equity: | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of December 31, 2022 and September 30, 2022, respectively | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Allowance on accounts receivable (in dollars) | $ 40,831 | $ 330,853 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 12,908,520 | 12,908,520 |
Common stock, shares outstanding | 12,908,520 | 12,908,520 |
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 - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | ||
Total revenues | $ 5,262,752 | $ 4,165,706 |
Total cost of revenues | 2,885,069 | 3,056,568 |
Gross profit | 2,377,683 | 1,109,138 |
Operating expenses: | ||
Selling, general and administrative | 2,625,357 | 4,735,619 |
Research and development | 971,304 | 1,080,096 |
Total operating expenses | 3,596,661 | 5,815,715 |
LOSS FROM OPERATIONS | (1,218,978) | (4,706,577) |
Interest income, net | 3,686 | 273 |
Unrealized loss on change in fair value of warrants classified as a liability | (2,637,800) | 0 |
Other income (expense), net | 8,846 | (14,607) |
Loss before provision for income taxes | (3,844,246) | (4,720,911) |
Provision for income taxes | 0 | 0 |
NET LOSS | (3,844,246) | (4,720,911) |
Less: Net loss (income) attributable to noncontrolling interest | 874 | (855) |
NET LOSS attributable to Applied DNA Sciences, Inc. | $ (3,843,372) | $ (4,721,766) |
Net loss per share attributable to common stockholders - basic | $ (0.30) | $ (0.63) |
Net loss per share attributable to common stockholders - diluted | $ (0.30) | $ (0.48) |
Weighted average shares outstanding - basic | 12,908,520 | 7,486,120 |
Weighted average shares outstanding - diluted | 12,908,520 | 7,486,120 |
Product revenues | ||
Revenues | ||
Total revenues | $ 516,396 | $ 826,311 |
Total cost of revenues | 365,378 | 434,929 |
Service revenues | ||
Revenues | ||
Total revenues | 232,061 | 139,273 |
Clinical laboratory service revenues | ||
Revenues | ||
Total revenues | 4,514,295 | 3,200,122 |
Total cost of revenues | $ 2,519,691 | $ 2,621,639 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Shares | Additional Paid in Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Balance at Sep. 30, 2021 | $ 7,488 | $ 295,228,272 | $ (284,122,092) | $ (722) | $ 11,112,946 |
Balance (in shares) at Sep. 30, 2021 | 7,486,120 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock based compensation expense | 1,699,920 | 1,699,920 | |||
Options issued in settlement of accrued bonus | 300,000 | 300,000 | |||
Net loss | (4,721,766) | 855 | (4,720,911) | ||
Balance at Dec. 31, 2021 | $ 7,488 | 297,228,192 | (288,843,858) | 133 | 8,391,955 |
Balance (in shares) at Dec. 31, 2021 | 7,486,120 | ||||
Balance at Sep. 30, 2022 | $ 12,909 | 305,399,008 | (292,500,088) | (2,890) | $ 12,908,939 |
Balance (in shares) at Sep. 30, 2022 | 12,908,520 | 12,908,520 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Stock based compensation expense | 93,748 | $ 93,748 | |||
Net loss | (3,843,372) | (874) | (3,844,246) | ||
Balance at Dec. 31, 2022 | $ 12,909 | $ 305,492,756 | $ (296,343,460) | $ (3,764) | $ 9,158,441 |
Balance (in shares) at Dec. 31, 2022 | 12,908,520 | 12,908,520 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (3,844,246) | $ (4,720,911) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 338,918 | 320,751 |
Gain on sale of property and equipment | (6,083) | 0 |
Unrealized loss on change in fair value of warrants classified as a liability | 2,637,800 | 0 |
Stock-based compensation | 93,748 | 1,699,920 |
Change in provision for bad debts | (290,022) | 10,000 |
Change in operating assets and liabilities: | ||
Accounts receivable | (695,912) | (1,063,237) |
Inventories | 125,230 | 69,304 |
Prepaid expenses and other current assets and deposits | 133,374 | (24,268) |
Accounts payable and accrued liabilities | (586,236) | (169,991) |
Deferred revenue | (289,677) | 176,538 |
Net cash used in operating activities | (2,383,106) | (3,701,894) |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 45,000 | 0 |
Purchase of property and equipment | 0 | (104,686) |
Net cash provided by (used in) investing activities | 45,000 | (104,686) |
Net decrease in cash and cash equivalents | (2,338,106) | (3,806,580) |
Cash and cash equivalents at beginning of period | 15,215,285 | 6,554,948 |
Cash and cash equivalents at end of period | 12,877,179 | 2,748,368 |
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 | 20,619 | 0 |
Issuance of stock options for payment of accrued bonus | $ 0 | $ 300,000 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 3 Months Ended |
Dec. 31, 2022 | |
NATURE OF THE BUSINESS | |
NATURE OF THE BUSINESS | NOTE A — NATURE OF THE BUSINESS Applied DNA Sciences, Inc. (“Applied DNA” or the “Company”) is a biotechnology company developing technologies to produce and detect deoxyribonucleic acid (“DNA”). The Company uses the polymerase chain reaction (“PCR”) to enable both the production and detection of DNA, for use in three primary markets: (i) the manufacture of DNA for use in nucleic acid-based therapeutics (“Therapeutic DNA Production Services”); (ii) the detection of DNA in molecular diagnostics testing services (“MDx Testing Services”); and (iii) the manufacture and detection of DNA for industrial supply chain security services (“DNA Tagging and Security Products and Services”). Under its MDx Testing Services, the Company’s wholly owned subsidiary, Applied DNA Clinical Labs, LLC (“ADCL”), is offering a high-throughput turnkey solution for population-scale COVID-19 testing marketed as safeCircle TM |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES Interim Financial Statements The accompanying condensed consolidated financial statements as of December 31, 2022, and for the three-month periods ended December 31, 2022, and 2021 are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023. 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, 2022 and footnotes thereto included in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission (“SEC”) on December 14, 2022, as amended. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year’s presentation. The condensed consolidated balance sheet as of September 30, 2022 contained herein has been derived from the audited consolidated financial statements as of September 30, 2022 but does not include all disclosures required by GAAP. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, APDN (B.V.I.) Inc., Applied DNA Sciences Europe Limited, and Applied DNA Sciences India Private Limited, ADCL and its majority-owned subsidiary, LineaRx, Inc. (“LRx”). Significant inter-company transactions and balances have been eliminated in consolidation. Liquidity The Company has recurring net losses, which have resulted in an accumulated deficit of $296,343,460 as of December 31, 2022. The Company incurred a net loss of $3,844,246 and generated negative operating cash flow of $2,383,106 for the three-month period ended December 31, 2022. At December 31, 2022, the Company had cash and cash equivalents of $12,877,179 and working capital of $15,002,349. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Liquidity 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. Through December 31, 2022, the Company has dedicated most of its financial resources to commercialization of its MDx Testing Services, specifically its COVID-19 Testing Services, as well as to research and development efforts,primarily in the Therapeutic DNA Production segment, including the development and validation of its own technologies as well as, advancing its intellectual property, and general and administrative activities. The Company estimates that it will have sufficient cash and cash equivalents to fund operations for the next twelve months from the date of filing of this quarterly report. The Company may require additional funds to complete the continued development of its products, services, product manufacturing, and to fund expected additional losses from operations until revenues are sufficient to cover its operating expenses. If revenues are not sufficient to cover the Company’s operating expenses, and if the Company is not successful in obtaining the necessary additional financing, the Company will most likely be forced to reduce operations. 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 significant estimates include revenue recognition, recoverability of long-lived assets, including the values assigned to property and equipment, fair value calculations for warrants, contingencies, and management’s anticipated liquidity. Management reviews its estimates on a regular basis and the effects of any material revisions are reflected in the consolidated financial statements in the period they are deemed necessary. Accordingly, actual results could differ from those estimates. Revenue Recognition The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codifications (“ASC”), Revenue Recognition (“ASC 606” or “Topic 606”). The Company measures revenue at the amounts that reflect the consideration to which it is expected to be entitled in exchange for transferring control of goods and services to customers. The Company recognizes revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. The Company’s contracts with customers may include multiple performance obligations (e.g. taggants, maintenance, authentication services, research and development services, etc.). For such arrangements, the Company allocates revenues to each performance obligation based on their relative standalone selling price. Due to the short-term nature of the Company’s contracts with customers, it has elected to apply the practical expedients under Topic 606 to: (1) expense as incurred, incremental costs of obtaining a contract and (2) not adjust the consideration for the effects of a significant financing component for contracts with an original expected duration of one year or less. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Revenue Recognition Product Revenues and Authentication Services The Company’s PCR-produced linear DNA product revenues are accounted for/recognized in accordance with contracts with customers. The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The Company invoices customers upon shipment, and its collection terms range, on average, from 30 to 60 days. Authentication Services The Company recognizes revenue for authentication services upon satisfying its promises to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company services are complete, which in nearly all cases is when the authentication report is released to the customer. Clinical Laboratory Testing Services The Company records revenue for its clinical laboratory testing service contracts, which includes its COVID-19 Testing Services, upon satisfying its promise to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time that Company services are complete, which in nearly all cases is when the testing results are released to the customer. For those customers with a fixed monthly fee, the revenue is recognized over-time as the services are provided. Research and Development Services The Company records revenue for its research and development contracts using the over-time revenue recognition model. Revenue is primarily measured using the cost-to-cost method, which the Company believes best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Revenues are recorded proportionally as costs are incurred. For contracts where the total costs cannot be estimated, revenues are recognized for the actual costs incurred during a period until the remaining costs to complete a contract can be estimated. The Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Revenue Recognition 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, 2022 2021 Research and development services (over-time) $ 126,058 $ 105,695 Clinical laboratory testing services (point-in-time) 3,074,414 1,873,722 Clinical laboratory testing services (over-time) 1,439,881 1,326,400 Product and authentication services (point-in-time): Supply chain 411,765 411,547 Large Scale DNA Production 127,506 — Asset marking 83,128 105,522 MDx test kits and supplies — 342,820 Total $ 5,262,752 $ 4,165,706 Contract balances As of December 31, 2022, the Company has entered into contracts with customers for which revenue has not yet been recognized. Consideration received from a customer prior to revenue recognition is recorded to a contract liability and is recognized as revenue when the Company satisfies the related performance obligations under the terms of the contract. The Company’s contract liabilities, which are reported as deferred revenue on the condensed consolidated balance sheet, consist almost entirely of research and development contracts where consideration has been received and the development services have not yet been fully performed. The opening and closing balances of the Company’s contract balances are as follows: October 1, December 31, $ Balance sheet classification 2022 2022 change Contract liabilities Deferred revenue $ 563,557 $ 273,880 $ 289,677 For the three-month period ended December 31, 2022, the Company recognized $341,285 of revenue that was included in Contract liabilities as of October 1, 2022. Inventories Inventories, which consist primarily of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable value, with cost determined by using the first-in, first-out (FIFO) method. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued 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, 2022 and 2021, 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 that 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, 2022 and 2021 are as follows: 2022 2021 Warrants 7,295,588 743,563 Stock options 1,006,141 1,061,460 Total 8,301,729 1,805,023 Concentrations Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and cash equivalents with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. As of December 31, 2022, the Company had cash and cash equivalents of approximately $12.2 million 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, 2022 included an aggregate of 83% from two customers within the MDx Testing Services segment. One customer from within the MDx Testing Services segment accounted for 48% of the Company’s revenues earned from sale of products and services for the three-month period ended December 31, 2021. One customer accounted for 88% of the Company’s accounts receivable at December 31, 2022 and two customers accounted for 89% of the Company’s accounts receivable at September 30, 2022. NOTE B – BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Segment Reporting The Company has three reportable segments. (1) Therapeutic DNA Production Services (2) MDx Testing Services, and (3) DNA Tagging and Security Products and Services. Resources are allocated by our CEO, COO, CFO and CLO whom, collectively the Company has determined to be our Chief Operating Decision Maker (CODM). The following is a brief description of our reportable segments. Therapeutic DNA Production Services MDx Testing Services TM DNA Tagging and Security Products and Services The Company evaluates the performance of its segments and allocates resources to them based on revenues and operating income (losses). Operating income (loss) includes intersegment revenues, as well as a charge allocating all corporate headquarters costs. Since each vertical has shared employee resources, payroll and certain other general expense such as rent, and utilities were allocated based on an estimate by management of the percentage of employee time spent in each vertical. Segment assets are not reported to, or used by, the CODM to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed. Fair Value of Financial Instruments The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related asset or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. The Company utilizes observable market inputs (quoted market prices) when measuring fair value whenever possible. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, which reports to the Chief Financial Officer, determine its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department and are approved by the Chief Financial Officer. As of December 31, 2022, there were transfers between Levels 1 2 3 NOTE B – BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Recent Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU-2016-13”), which changes the methodology for measuring credit losses on financial instruments and certain other instruments, including trade receivables and contract assets. The new standard replaces the current incurred loss model for measurement of credit losses on financial assets with a forward-looking expected loss model based on historical experience, current conditions, and reasonable and supportable forecasts. The new standard is effective for reporting periods beginning after December 15, 2022. The Company does not expect the adoption of ASU 2016-13 to have a significant impact on its condensed consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, “Debt: Debt with Conversion and Other Options,” that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, “Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of ASU 2020-06 to have a significant impact on its condensed consolidated financial statements. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
INVENTORIES | NOTE C — INVENTORIES Inventories consist of the following: December 31, September 30, 2022 2022 (unaudited) Raw materials $ 366,116 $ 471,947 Work-in-progress 35,786 55,817 Finished goods 75,112 74,480 Total $ 477,014 $ 602,244 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 3 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE D — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities are as follows: December 31, September 30, 2022 2022 (unaudited) Accounts payable $ 2,023,295 $ 1,744,105 Accrued salaries payable 830,986 1,458,661 Other accrued expenses 201,842 418,985 Total $ 3,056,123 $ 3,621,751 |
WARRANTS
WARRANTS | 3 Months Ended |
Dec. 31, 2022 | |
WARRANTS | |
WARRANTS | NOTE E —WARRANTS Warrants The following table summarizes the changes in warrants outstanding. These warrants were granted as part of financing transactions, as well as in lieu of cash compensation for services performed or as financing expenses in connection with the sales of the Company’s Common Stock. Transactions involving warrants are summarized as follows: Weighted Average Exercise Number of Price Per Shares Share Balance at October 1, 2022 7,313,963 $ 3.68 Granted — — Exercised — — Cancelled or expired (18,375) 17.60 Balance at December 31, 2022 7,295,588 $ 3.65 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE F — COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases office space under an operating lease in Stony Brook, New York for its corporate headquarters. The lease is for a 30,000 square foot building. The term of the lease commenced on June 15, 2013 and originally expired on May 31, 2016, with the option to extend the lease for two additional three-year periods. The Company exercised its option to extend the lease for one additional three-year period ending May 31, 2019. During November 2019, the Company extended this lease until January 15, 2020. In addition to the office space, the Company also has 2,200 square feet of laboratory space. On January 20, 2020 , the Company entered into an agreement to amend both of these leases, extending the term for the corporate headquarters as well as the laboratory space until January 15, 2021, with a one-year renewal option. During October 2020, the Company exercised the one-year renewal option, extending the term for these leases until January 15, 2022. On February 1, 2022, the Company entered into a new lease agreement for the same facility for an one-year term, expiring January 31, 2023. The base rent during the additional twelve-month period was $589,056 per annum. The Company is currently negotiating a lease renewal with its landlord and is operating under the old lease on a month-to-month basis until the new lease is finalized. The Company also has a satellite testing facility in Ahmedabad, India, which occupies 1,108 square feet for a three-year term beginning November 1, 2017. During August 2022, the Company renewed this lease with a new expiration date of July 31, 2023. The base rent is approximately $6,500 per annum. The Company’s future minimum rental payments (excluding real estate tax and maintenance costs as of December 31, 2022 are $50,839 and are considered short-term lease obligations).The total rent expense for the three-month periods ended December 31, 2022 and 2021 were $148,826 and $142,952 , respectively. Employment Agreement The employment agreement with Dr. James Hayward, the Company’s President and Chief Executive Officer (“CEO”), entered into in July 2016 provides that he will be the Company’s CEO and will continue to serve on the Company’s Board of Directors. The initial term was from July 1, 2016 through June 30, 2017, with automatic one-year renewal periods. On July 28, 2017, the employment agreement was renewed for a successive one-year term and the employment agreement has been renewed for successive one-year terms, most recently as of June 30, 2022. Under the employment agreement, the CEO is eligible for a special aggregate cash incentive bonus of up to $800,000 , $300,000 of which is payable if and when annual revenue reaches $8 million, plus an additional $100,000 payable for each additional $2 million of annual revenue in excess of $8 million. Pursuant to the contract, the CEO’s annual salary is $400,000 . The Board of Directors, acting in its discretion, may grant annual bonuses to the CEO. The CEO will be entitled to certain benefits and perquisites and will be eligible to participate in retirement, welfare and incentive plans available to the Company’s other employees. The employment agreement with the CEO also provides that if he is terminated before the end of the initial or a renewal term by the Company without cause or if the CEO terminates his employment for good reason, then, in addition to previously earned and unpaid salary, bonus and benefits, and subject to the delivery of a general release and continuing compliance with restrictive covenants, the CEO will be entitled to receive a pro rata NOTE F — COMMITMENTS AND CONTINGENCIES, continued Employment Agreement , continued Upon termination due to death or disability, the CEO will generally be entitled to receive the same payments and benefits he would have received if his employment had been terminated by the Company without cause (as described in the preceding paragraph), other than salary continuation payments. On October 29, 2021, the Board of Directors amended the existing compensatory arrangement with the CEO to increase his salary to $450,000, effective November 1, 2021. 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE G – SEGMENT INFORMATION As detailed in Note B above, the Company has three reportable segments; (1) Therapeutic DNA Production Services, (2) MDx Testing Services, and (3) DNA Tagging and Security Products and Services. Resources are allocated by our CEO, COO CFO and CLO whom, collectively the Company has determined to be our CODM. Information regarding operations by segment for the three-month period ended December 31, 2022 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ 127,506 $ — $ 388,890 $ 516,396 Service revenues 121,743 — 110,318 232,061 Clinical laboratory service revenues — 4,565,815 — 4,565,815 Less intersegment revenues — (51,520) — (51,520) Total revenues $ 249,249 $ 4,514,295 $ 499,208 $ 5,262,752 Gross profit $ 170,924 $ 1,933,219 $ 273,540 $ 2,377,683 (Loss) income from segment operations (a) $ (852,253) $ 1,109,884 $ (474,715) $ (217,084) NOTE G – SEGMENT INFORMATION, continued Information regarding operations by segment for the three-month period ended December 31, 2021 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ — $ 342,821 $ 483,490 $ 826,311 Service revenues 89,438 — 49,835 139,273 Clinical laboratory service revenues — 3,349,658 — 3,349,658 Less intersegment revenues — (149,536) — (149,536) Total revenues $ 89,438 $ 3,542,943 $ 533,325 $ 4,165,706 Gross profit $ 89,438 $ 820,690 $ 199,010 $ 1,109,138 (Loss) income from segment operations (a) $ (924,778) $ (334,988) $ (896,399) $ (2,156,165) Reconciliation of segment loss from operations to consolidated loss before provision for income taxes is as follows: December 31, 2022 2021 Loss from operations of reportable segements $ (217,084) $ (2,156,165) General corporate expenses (b) (1,001,894) (2,550,412) Interest income, net 3,686 273 Unrealized loss on change in fair value of warrants classified as a liability (2,637,800) — Other income (expense), net 8,846 (14,607) Consolidated loss before provision for income taxes $ (3,844,246) $ (4,720,911) (a) Segment operating loss consists of net sales, less cost of sales, specifically identifiable research and development, and selling, general and administrative expenses. (b) General corporate expenses consists of Selling, general and administrative expenses that are not specifically identifiable to a segment. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE H – FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments at fair value are measured on a recurring basis. Related unrealized gains or losses are recognized in unrealized gain on change in fair value of the warrants classified as a liability in the condensed consolidated statements of operations. For additional disclosures regarding methods and assumptions used in estimating fair values of these financial instruments, see Note B. The following table presents the fair value of the Company’s financial instruments as of December 31, 2022 and summarizes the significant unobservable inputs in fair value measurement of Level 3 financial assets and liabilities as of December 31, 2022. The Company did not have any assets or liabilities categorized as Level 1 or 2 as of December 31, 2022. Fair value at Valuation Unobservable Weighted December 31, 2022 Technique Input Average Liabilities: Common Warrants $ 2,187,000 Monte Carlo simulation Annualized volatility 160.00 % Series A Warrants $ 4,269,000 Monte Carlo simulation Annualized volatility 160.00 % Series B Warrants $ 1,321,200 Monte Carlo simulation Annualized volatility 190.00 % NOTE H – FAIR VALUE OF FINANCIAL INSTRUMENTS, continued The change in fair value of the Common Warrants and the Series A and Series B Warrants for the three-month period ended December 31, 2022 is summarized as follows: Common Warrants Series A Warrants Series B Warrants Fair value at October 1, 2022 $ 1,477,000 $ 2,883,000 $ 779,400 Change in fair value 710,000 1,386,000 541,800 Fair Value at December 31, 2022 $ 2,187,000 $ 4,269,000 1,321,200 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE I – SUBSEQUENT EVENTS On January 25, 2023 the Company granted 694,670 options to non-employee board of director members that have a ten-year term and vest on the one-year anniversary of the date of grant. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |
Interim Financial Statements | Interim Financial Statements The accompanying condensed consolidated financial statements as of December 31, 2022, and for the three-month periods ended December 31, 2022, and 2021 are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023. 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, 2022 and footnotes thereto included in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission (“SEC”) on December 14, 2022, as amended. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year’s presentation. The condensed consolidated balance sheet as of September 30, 2022 contained herein has been derived from the audited consolidated financial statements as of September 30, 2022 but does not include all disclosures required by GAAP. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, APDN (B.V.I.) Inc., Applied DNA Sciences Europe Limited, and Applied DNA Sciences India Private Limited, ADCL and its majority-owned subsidiary, LineaRx, Inc. (“LRx”). Significant inter-company transactions and balances have been eliminated in consolidation. |
Liquidity | Liquidity The Company has recurring net losses, which have resulted in an accumulated deficit of $296,343,460 as of December 31, 2022. The Company incurred a net loss of $3,844,246 and generated negative operating cash flow of $2,383,106 for the three-month period ended December 31, 2022. At December 31, 2022, the Company had cash and cash equivalents of $12,877,179 and working capital of $15,002,349. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Liquidity 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. Through December 31, 2022, the Company has dedicated most of its financial resources to commercialization of its MDx Testing Services, specifically its COVID-19 Testing Services, as well as to research and development efforts,primarily in the Therapeutic DNA Production segment, including the development and validation of its own technologies as well as, advancing its intellectual property, and general and administrative activities. The Company estimates that it will have sufficient cash and cash equivalents to fund operations for the next twelve months from the date of filing of this quarterly report. The Company may require additional funds to complete the continued development of its products, services, product manufacturing, and to fund expected additional losses from operations until revenues are sufficient to cover its operating expenses. If revenues are not sufficient to cover the Company’s operating expenses, and if the Company is not successful in obtaining the necessary additional financing, the Company will most likely be forced to reduce operations. |
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 significant estimates include revenue recognition, recoverability of long-lived assets, including the values assigned to property and equipment, fair value calculations for warrants, contingencies, and management’s anticipated liquidity. Management reviews its estimates on a regular basis and the effects of any material revisions are reflected in the consolidated financial statements in the period they are deemed necessary. Accordingly, actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codifications (“ASC”), Revenue Recognition (“ASC 606” or “Topic 606”). The Company measures revenue at the amounts that reflect the consideration to which it is expected to be entitled in exchange for transferring control of goods and services to customers. The Company recognizes revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. The Company’s contracts with customers may include multiple performance obligations (e.g. taggants, maintenance, authentication services, research and development services, etc.). For such arrangements, the Company allocates revenues to each performance obligation based on their relative standalone selling price. Due to the short-term nature of the Company’s contracts with customers, it has elected to apply the practical expedients under Topic 606 to: (1) expense as incurred, incremental costs of obtaining a contract and (2) not adjust the consideration for the effects of a significant financing component for contracts with an original expected duration of one year or less. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Revenue Recognition Product Revenues and Authentication Services The Company’s PCR-produced linear DNA product revenues are accounted for/recognized in accordance with contracts with customers. The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The Company invoices customers upon shipment, and its collection terms range, on average, from 30 to 60 days. Authentication Services The Company recognizes revenue for authentication services upon satisfying its promises to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company services are complete, which in nearly all cases is when the authentication report is released to the customer. Clinical Laboratory Testing Services The Company records revenue for its clinical laboratory testing service contracts, which includes its COVID-19 Testing Services, upon satisfying its promise to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time that Company services are complete, which in nearly all cases is when the testing results are released to the customer. For those customers with a fixed monthly fee, the revenue is recognized over-time as the services are provided. Research and Development Services The Company records revenue for its research and development contracts using the over-time revenue recognition model. Revenue is primarily measured using the cost-to-cost method, which the Company believes best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Revenues are recorded proportionally as costs are incurred. For contracts where the total costs cannot be estimated, revenues are recognized for the actual costs incurred during a period until the remaining costs to complete a contract can be estimated. The Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Revenue Recognition 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, 2022 2021 Research and development services (over-time) $ 126,058 $ 105,695 Clinical laboratory testing services (point-in-time) 3,074,414 1,873,722 Clinical laboratory testing services (over-time) 1,439,881 1,326,400 Product and authentication services (point-in-time): Supply chain 411,765 411,547 Large Scale DNA Production 127,506 — Asset marking 83,128 105,522 MDx test kits and supplies — 342,820 Total $ 5,262,752 $ 4,165,706 Contract balances As of December 31, 2022, the Company has entered into contracts with customers for which revenue has not yet been recognized. Consideration received from a customer prior to revenue recognition is recorded to a contract liability and is recognized as revenue when the Company satisfies the related performance obligations under the terms of the contract. The Company’s contract liabilities, which are reported as deferred revenue on the condensed consolidated balance sheet, consist almost entirely of research and development contracts where consideration has been received and the development services have not yet been fully performed. The opening and closing balances of the Company’s contract balances are as follows: October 1, December 31, $ Balance sheet classification 2022 2022 change Contract liabilities Deferred revenue $ 563,557 $ 273,880 $ 289,677 For the three-month period ended December 31, 2022, the Company recognized $341,285 of revenue that was included in Contract liabilities as of October 1, 2022. |
Inventories | Inventories Inventories, which consist primarily of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable value, with cost determined by using the first-in, first-out (FIFO) method. |
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, 2022 and 2021, 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 that 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, 2022 and 2021 are as follows: 2022 2021 Warrants 7,295,588 743,563 Stock options 1,006,141 1,061,460 Total 8,301,729 1,805,023 |
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. As of December 31, 2022, the Company had cash and cash equivalents of approximately $12.2 million 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, 2022 included an aggregate of 83% from two customers within the MDx Testing Services segment. One customer from within the MDx Testing Services segment accounted for 48% of the Company’s revenues earned from sale of products and services for the three-month period ended December 31, 2021. One customer accounted for 88% of the Company’s accounts receivable at December 31, 2022 and two customers accounted for 89% of the Company’s accounts receivable at September 30, 2022. |
Segment Reporting | Segment Reporting The Company has three reportable segments. (1) Therapeutic DNA Production Services (2) MDx Testing Services, and (3) DNA Tagging and Security Products and Services. Resources are allocated by our CEO, COO, CFO and CLO whom, collectively the Company has determined to be our Chief Operating Decision Maker (CODM). The following is a brief description of our reportable segments. Therapeutic DNA Production Services MDx Testing Services TM DNA Tagging and Security Products and Services The Company evaluates the performance of its segments and allocates resources to them based on revenues and operating income (losses). Operating income (loss) includes intersegment revenues, as well as a charge allocating all corporate headquarters costs. Since each vertical has shared employee resources, payroll and certain other general expense such as rent, and utilities were allocated based on an estimate by management of the percentage of employee time spent in each vertical. Segment assets are not reported to, or used by, the CODM to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related asset or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. The Company utilizes observable market inputs (quoted market prices) when measuring fair value whenever possible. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, which reports to the Chief Financial Officer, determine its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department and are approved by the Chief Financial Officer. As of December 31, 2022, there were transfers between Levels 1 2 3 |
Recent Accounting Standards | Recent Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU-2016-13”), which changes the methodology for measuring credit losses on financial instruments and certain other instruments, including trade receivables and contract assets. The new standard replaces the current incurred loss model for measurement of credit losses on financial assets with a forward-looking expected loss model based on historical experience, current conditions, and reasonable and supportable forecasts. The new standard is effective for reporting periods beginning after December 15, 2022. The Company does not expect the adoption of ASU 2016-13 to have a significant impact on its condensed consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, “Debt: Debt with Conversion and Other Options,” that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, “Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of ASU 2020-06 to have a significant impact on its condensed consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |
Schedule of revenues disaggregated by business operations and timing of revenue recognition | The following table presents revenues disaggregated by our business operations and timing of revenue recognition: Three Month Period Ended: December 31, December 31, 2022 2021 Research and development services (over-time) $ 126,058 $ 105,695 Clinical laboratory testing services (point-in-time) 3,074,414 1,873,722 Clinical laboratory testing services (over-time) 1,439,881 1,326,400 Product and authentication services (point-in-time): Supply chain 411,765 411,547 Large Scale DNA Production 127,506 — Asset marking 83,128 105,522 MDx test kits and supplies — 342,820 Total $ 5,262,752 $ 4,165,706 |
Schedule of opening and closing contract balances | The opening and closing balances of the Company’s contract balances are as follows: October 1, December 31, $ Balance sheet classification 2022 2022 change Contract liabilities Deferred revenue $ 563,557 $ 273,880 $ 289,677 |
Schedule of anti-dilutive securities not included computation of net loss per share | 2022 2021 Warrants 7,295,588 743,563 Stock options 1,006,141 1,061,460 Total 8,301,729 1,805,023 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
Schedule of inventories | December 31, September 30, 2022 2022 (unaudited) Raw materials $ 366,116 $ 471,947 Work-in-progress 35,786 55,817 Finished goods 75,112 74,480 Total $ 477,014 $ 602,244 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
Schedule of accounts payable and accrued liabilities | December 31, September 30, 2022 2022 (unaudited) Accounts payable $ 2,023,295 $ 1,744,105 Accrued salaries payable 830,986 1,458,661 Other accrued expenses 201,842 418,985 Total $ 3,056,123 $ 3,621,751 |
WARRANTS (Tables)
WARRANTS (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
WARRANTS | |
Schedule of transactions involving warrants | Weighted Average Exercise Number of Price Per Shares Share Balance at October 1, 2022 7,313,963 $ 3.68 Granted — — Exercised — — Cancelled or expired (18,375) 17.60 Balance at December 31, 2022 7,295,588 $ 3.65 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
Schedule of information regarding operations by segment | Information regarding operations by segment for the three-month period ended December 31, 2022 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ 127,506 $ — $ 388,890 $ 516,396 Service revenues 121,743 — 110,318 232,061 Clinical laboratory service revenues — 4,565,815 — 4,565,815 Less intersegment revenues — (51,520) — (51,520) Total revenues $ 249,249 $ 4,514,295 $ 499,208 $ 5,262,752 Gross profit $ 170,924 $ 1,933,219 $ 273,540 $ 2,377,683 (Loss) income from segment operations (a) $ (852,253) $ 1,109,884 $ (474,715) $ (217,084) Information regarding operations by segment for the three-month period ended December 31, 2021 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ — $ 342,821 $ 483,490 $ 826,311 Service revenues 89,438 — 49,835 139,273 Clinical laboratory service revenues — 3,349,658 — 3,349,658 Less intersegment revenues — (149,536) — (149,536) Total revenues $ 89,438 $ 3,542,943 $ 533,325 $ 4,165,706 Gross profit $ 89,438 $ 820,690 $ 199,010 $ 1,109,138 (Loss) income from segment operations (a) $ (924,778) $ (334,988) $ (896,399) $ (2,156,165) (a) Segment operating loss consists of net sales, less cost of sales, specifically identifiable research and development, and selling, general and administrative expenses. |
Schedule of reconciliation of segment loss from operations to corporate loss | December 31, 2022 2021 Loss from operations of reportable segements $ (217,084) $ (2,156,165) General corporate expenses (b) (1,001,894) (2,550,412) Interest income, net 3,686 273 Unrealized loss on change in fair value of warrants classified as a liability (2,637,800) — Other income (expense), net 8,846 (14,607) Consolidated loss before provision for income taxes $ (3,844,246) $ (4,720,911) (b) General corporate expenses consists of Selling, general and administrative expenses that are not specifically identifiable to a segment. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Summary of the significant unobservable inputs in fair value measurement of Level 3 financial assets and liabilities | Fair value at Valuation Unobservable Weighted December 31, 2022 Technique Input Average Liabilities: Common Warrants $ 2,187,000 Monte Carlo simulation Annualized volatility 160.00 % Series A Warrants $ 4,269,000 Monte Carlo simulation Annualized volatility 160.00 % Series B Warrants $ 1,321,200 Monte Carlo simulation Annualized volatility 190.00 % |
Schedule of change in fair value of warrants | Common Warrants Series A Warrants Series B Warrants Fair value at October 1, 2022 $ 1,477,000 $ 2,883,000 $ 779,400 Change in fair value 710,000 1,386,000 541,800 Fair Value at December 31, 2022 $ 2,187,000 $ 4,269,000 1,321,200 |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) | 3 Months Ended |
Dec. 31, 2022 item | |
NATURE OF THE BUSINESS | |
Number of primary markets that use the Company's technologies | 3 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Revenues disaggregated by our business operations and timing of revenue recognition (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | $ 5,262,752 | $ 4,165,706 |
Research and development services (over-time) | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | 126,058 | 105,695 |
Clinical laboratory testing services (point-in-time) | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | 3,074,414 | 1,873,722 |
Clinical laboratory testing services (over-time) | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | 1,439,881 | 1,326,400 |
Supply chain | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | 411,765 | 411,547 |
Large Scale DNA Production | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | 127,506 | |
Asset marking | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | $ 83,128 | 105,522 |
MDx test kits and supplies | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Total | $ 342,820 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Opening and closing balances of the Company's contract balances (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Oct. 01, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Change in contract liabilities | $ 289,677 | |
Revenue recognized in contract liabilities | 341,285 | |
Contract liabilities | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Deferred revenue | $ 273,880 | $ 563,557 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Potential stock issuances under various options, and warrants (Details) - shares | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 8,301,729 | 1,805,023 |
Warrants | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 7,295,588 | 743,563 |
Stock options | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 1,006,141 | 1,061,460 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2022 USD ($) customer segment | Dec. 31, 2021 USD ($) customer | Sep. 30, 2022 USD ($) customer | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||
Accumulated deficit | $ 296,343,460 | $ 292,500,088 | |
Net loss | 3,844,246 | $ 4,720,911 | |
Operating cash flow | 2,383,106 | ||
Allowance on accounts receivable | 40,831 | 330,853 | |
Cash and cash equivalents | 12,877,179 | $ 15,215,285 | |
Research and development | $ 971,304 | $ 1,080,096 | |
Number of reportable segments | segment | 3 | ||
Transfers from Level 2 to Level 1, Assets | $ 0 | ||
Transfers from Level 1 to Level 2, Assets | 0 | ||
Transfers from Level 2 to Level 1, Liabilities | 0 | ||
Transfers from Level 1 to Level 2, Liabilities | 0 | ||
Transfers Into Level 3, Liabilities | 0 | ||
Transfers out of Level 3, Liabilities | 0 | ||
Working capital | 15,002,349 | ||
Excess of FDIC insurance limit | $ 12,200,000 | ||
Customer Concentration Risk | Total Revenue | |||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||
Number of customers | customer | 2 | 1 | |
Customer Concentration Risk | Total Revenue | One customer | |||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||
Concentration risk percentage | 83% | 48% | |
Customer Concentration Risk | Accounts Receivable | |||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||
Number of customers | customer | 1 | 2 | |
Customer Concentration Risk | Accounts Receivable | Two customer | |||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||
Concentration risk percentage | 88% | 89% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
INVENTORIES | ||
Raw materials | $ 366,116 | $ 471,947 |
Work-in-progress | 35,786 | 55,817 |
Finished goods | 75,112 | 74,480 |
Total | $ 477,014 | $ 602,244 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||
Accounts payable | $ 2,023,295 | $ 1,744,105 |
Accrued salaries payable | 830,986 | 1,458,661 |
Other accrued expenses | 201,842 | 418,985 |
Total | $ 3,056,123 | $ 3,621,751 |
WARRANTS - Transactions involvi
WARRANTS - Transactions involving warrants (Details) | 3 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Shares | |
Balance at October 1, 2022 | shares | 7,313,963 |
Cancelled or expired | shares | (18,375) |
Balance at December 31, 2022 | shares | 7,295,588 |
Weighted Average Exercise Price Per Share | |
Balance at October 1, 2022 | $ / shares | $ 3.68 |
Cancelled or expired | $ / shares | 17.60 |
Balance at December 31, 2022 | $ / shares | $ 3.65 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating Leases (Details) | 1 Months Ended | 3 Months Ended | ||||
Jan. 20, 2020 | Nov. 01, 2017 USD ($) ft² | Jun. 15, 2013 ft² | Oct. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
COMMITMENTS AND CONTINGENCIES | ||||||
Area of property under operating lease | ft² | 30,000 | |||||
Extended operating lease for additional period | 1 year | 3 years | 1 year | |||
Area of laboratory space | ft² | 2,200 | |||||
Lessee, operating lease, option to extend | January 20, 2020 | |||||
Base rent during initial lease term per annum | $ 589,056 | |||||
Lease for satellite testing | ft² | 1,108 | |||||
Term lease | 3 years | |||||
Base rent | $ 6,500 | |||||
Short-term lease obligation | $ 50,839 | |||||
Total lease rental expenses | $ 148,826 | $ 142,952 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Employment Agreement (Details) - Employment Agreement - CEO - USD ($) | 12 Months Ended | |||
Jun. 30, 2022 | Oct. 29, 2021 | Jul. 28, 2017 | Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | ||||
Agreement renewal period | 1 year | 1 year | 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 salary | $ 450,000 | $ 400,000 | ||
Compensation Description | The employment agreement with the CEO also provides that if he is terminated before the end of the initial or a renewal term by the Company without cause or if the CEO terminates his employment for good reason, then, in addition to previously earned and unpaid salary, bonus and benefits, and subject to the delivery of a general release and continuing compliance with restrictive covenants, the CEO will be entitled to receive a pro rata portion of the greater of either (X) the annual bonus he would have received if employment had continued through the end of the year of termination or (Y) the prior year’s bonus; salary continuation payments for two years following termination equal to the greater of (i) three times base salary or (ii) two times base salary plus bonus; company-paid COBRA continuation coverage for 18 months post-termination; continuing life insurance benefits (if any) for two years; and extended exercisability of outstanding vested options (for three years from termination date or, if earlier, the expiration of the fixed option term). If termination of employment as described above occurs within six months before or two years after a change in control of the Company, then, in addition to the above payments and benefits, all of the CEO’s outstanding options and other equity incentive awards will become fully vested and the CEO will receive a lump sum payment of the amounts that would otherwise be paid as salary continuation. In general, a change in control will include a 30% or more change in ownership of the Company. |
SEGMENT INFORMATION - Informati
SEGMENT INFORMATION - Information regarding operations by segment (Details) | 3 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
SEGMENT INFORMATION | ||
Number of reportable segments | segment | 3 | |
Total revenues | $ 5,262,752 | $ 4,165,706 |
Gross profit | 2,377,683 | 1,109,138 |
(Loss) income from segment operations | (1,218,978) | (4,706,577) |
Product revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 516,396 | 826,311 |
Service revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 232,061 | 139,273 |
Clinical laboratory service revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 4,514,295 | 3,200,122 |
Therapeutic DNA Production | ||
SEGMENT INFORMATION | ||
Total revenues | 249,249 | 89,438 |
Gross profit | 170,924 | 89,438 |
Therapeutic DNA Production | Product revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 127,506 | |
Therapeutic DNA Production | Service revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 121,743 | 89,438 |
MDx Testing Services | ||
SEGMENT INFORMATION | ||
Total revenues | 4,514,295 | 3,542,943 |
Gross profit | 1,933,219 | 820,690 |
MDx Testing Services | Product revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 342,821 | |
DNA Tagging and Security Products | ||
SEGMENT INFORMATION | ||
Total revenues | 499,208 | 533,325 |
Gross profit | 273,540 | 199,010 |
DNA Tagging and Security Products | Product revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 388,890 | 483,490 |
DNA Tagging and Security Products | Service revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 110,318 | 49,835 |
Operating segment | ||
SEGMENT INFORMATION | ||
(Loss) income from segment operations | (217,084) | (2,156,165) |
Operating segment | Clinical laboratory service revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 4,565,815 | 3,349,658 |
Operating segment | Therapeutic DNA Production | ||
SEGMENT INFORMATION | ||
(Loss) income from segment operations | (852,253) | (924,778) |
Operating segment | MDx Testing Services | ||
SEGMENT INFORMATION | ||
(Loss) income from segment operations | 1,109,884 | (334,988) |
Operating segment | MDx Testing Services | Clinical laboratory service revenues | ||
SEGMENT INFORMATION | ||
Total revenues | 4,565,815 | 3,349,658 |
Operating segment | DNA Tagging and Security Products | ||
SEGMENT INFORMATION | ||
(Loss) income from segment operations | (474,715) | (896,399) |
Intersegment Elimination | ||
SEGMENT INFORMATION | ||
Total revenues | (51,520) | (149,536) |
Intersegment Elimination | MDx Testing Services | ||
SEGMENT INFORMATION | ||
Total revenues | $ (51,520) | $ (149,536) |
SEGMENT INFORMATION -Reconcilia
SEGMENT INFORMATION -Reconciliation of segment loss from operation to corporate loss (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of segment loss from operations to corporate loss | ||
Loss from operations of reportable segments | $ (1,218,978) | $ (4,706,577) |
General corporate expenses | (2,625,357) | (4,735,619) |
Interest income, net | 3,686 | 273 |
Unrealized loss on change in fair value of warrants classified as a liability | (2,637,800) | 0 |
Other income (expense), net | 8,846 | (14,607) |
Loss before provision for income taxes | (3,844,246) | (4,720,911) |
Operating segment | ||
Reconciliation of segment loss from operations to corporate loss | ||
Loss from operations of reportable segments | (217,084) | (2,156,165) |
Segment reconciling items | ||
Reconciliation of segment loss from operations to corporate loss | ||
General corporate expenses | $ (1,001,894) | $ (2,550,412) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - inputs used in fair value of Level 3 Financial asset and liabilities (Details) - Level 3 - Monte Carlo simulation - Annualized Volatility | Dec. 31, 2022 USD ($) |
Common Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Financial liabilities fair value disclosure | $ 2,187,000 |
Common Warrants | Weighted Average | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Warrants and rights outstanding, measurement input | 1.6000 |
Series A Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Financial liabilities fair value disclosure | $ 4,269,000 |
Series A Warrants | Weighted Average | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Warrants and rights outstanding, measurement input | 1.6000 |
Series B Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Financial liabilities fair value disclosure | $ 1,321,200 |
Series B Warrants | Weighted Average | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Warrants and rights outstanding, measurement input | 1.9000 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Change in fair value of warrants (Details) | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Change in fair value, Gain (loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Unrealized loss on change in fair value of warrants classified as a liability |
Common Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Fair value at beginning of period | $ 1,477,000 |
Change in fair value | 710,000 |
Fair Value at ending of period | 2,187,000 |
Series A Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Fair value at beginning of period | 2,883,000 |
Change in fair value | 1,386,000 |
Fair Value at ending of period | 4,269,000 |
Series B Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Fair value at beginning of period | 779,400 |
Change in fair value | 541,800 |
Fair Value at ending of period | $ 1,321,200 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] - Non-employee board of director | Jan. 25, 2023 shares |
SUBSEQUENT EVENTS | |
Number of shares granted | 694,670 |
Expected term | 10 years |
Vesting period | 1 year |