Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
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, $0.001 par value | |
Trading Symbol | APDN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,908,520 | |
Entity Central Index Key | 0000744452 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 12,287,228 | $ 15,215,285 |
Accounts receivable, net of allowance of $40,831 and $330,853 at March 31, 2023 and September 30, 2022, respectively | 1,967,710 | 3,067,544 |
Inventories | 366,085 | 602,244 |
Prepaid expenses and other current assets | 758,530 | 1,058,056 |
Total current assets | 15,379,553 | 19,943,129 |
Property and equipment, net | 1,575,309 | 2,222,988 |
Other assets: | ||
Restricted cash | 750,000 | |
Right of use asset | 1,470,615 | |
Deposits | 98,997 | |
Total assets | 19,175,477 | 22,265,114 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 2,895,578 | 3,621,751 |
Lease liability, current | 476,502 | |
Deferred revenue | 283,298 | 563,557 |
Total current liabilities | 3,655,378 | 4,185,308 |
Long term accrued liabilities | 31,467 | 31,467 |
Lease liability, long term | 994,111 | |
Warrants classified as a liability | 4,526,300 | 5,139,400 |
Total liabilities | 9,207,256 | 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 March 31, 2023 and September 30, 2022, respectively | 0 | 0 |
Common stock, par value $0.001 per share; 200,000,000 shares authorized as of March 31, 2023 and September 30, 2022, 12,908,520 shares issued and outstanding as of March 31, 2023 and September 30, 2022 | 12,909 | 12,909 |
Additional paid in capital | 305,751,360 | 305,399,008 |
Accumulated deficit | (295,755,117) | (292,500,088) |
Applied DNA Sciences, Inc. stockholders' equity | 10,009,152 | 12,911,829 |
Noncontrolling interest | (40,931) | (2,890) |
Total equity | 9,968,221 | 12,908,939 |
Total liabilities and equity | 19,175,477 | 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 March 31, 2023 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 March 31, 2023 and September 30, 2022, respectively | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Mar. 31, 2023 | 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 | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | ||||
Total revenues | $ 4,407,614 | $ 6,147,283 | $ 9,670,366 | $ 10,312,989 |
Total cost of revenues | 2,600,179 | 3,658,798 | 5,485,248 | 6,715,366 |
Gross profit | 1,807,435 | 2,488,485 | 4,185,118 | 3,597,623 |
Operating expenses: | ||||
Selling, general and administrative | 3,522,715 | 3,572,680 | 6,148,072 | 8,308,299 |
Research and development | 988,744 | 1,070,041 | 1,960,048 | 2,150,137 |
Total operating expenses | 4,511,459 | 4,642,721 | 8,108,120 | 10,458,436 |
LOSS FROM OPERATIONS | (2,704,024) | (2,154,236) | (3,923,002) | (6,860,813) |
Interest income | 3,639 | 5,540 | 7,325 | 5,813 |
Transaction cost allocated to warrant liabilities | 0 | (391,335) | (391,335) | |
Unrealized gain on change in fair value of warrants classified as a liability | 3,250,900 | 782,500 | 613,100 | 782,500 |
Other income (expense), net | 661 | (2,266) | 9,507 | (16,873) |
Income (loss) before provision for income taxes | 551,176 | (1,759,797) | (3,293,070) | (6,480,708) |
Provision for income taxes | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) | 551,176 | (1,759,797) | (3,293,070) | (6,480,708) |
Less: Net loss attributable to noncontrolling interest | 37,167 | 1,112 | 38,041 | 257 |
NET INCOME (LOSS) attributable to Applied DNA Sciences, Inc. | 588,343 | (1,758,685) | (3,255,029) | (6,480,451) |
Deemed dividend related to warrant modification | 0 | 110,105 | 110,105 | |
NET INCOME (LOSS) attributable to common stockholders | $ 588,343 | $ (1,868,790) | $ (3,255,029) | $ (6,590,556) |
Net income (loss) per share attributable to common stockholders-basic | $ 0.05 | $ (0.23) | $ (0.25) | $ (0.85) |
Net income (loss) per share attributable to common stockholders- diluted | $ 0.05 | $ (0.23) | $ (0.25) | $ (0.85) |
Weighted average shares outstanding - basic | 12,908,520 | 8,084,680 | 12,908,520 | 7,783,747 |
Weighted average shares outstanding - diluted | 12,908,520 | 8,084,680 | 12,908,520 | 7,783,747 |
Product revenues | ||||
Revenues | ||||
Total revenues | $ 297,454 | $ 408,351 | $ 813,850 | $ 1,234,662 |
Total cost of revenues | 369,563 | 469,981 | 734,941 | 904,910 |
Service revenues | ||||
Revenues | ||||
Total revenues | 169,058 | 248,690 | 401,119 | 387,963 |
Clinical laboratory service revenues | ||||
Revenues | ||||
Total revenues | 3,941,102 | 5,490,242 | 8,455,397 | 8,690,364 |
Total cost of revenues | $ 2,230,616 | $ 3,188,817 | $ 4,750,307 | $ 5,810,456 |
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, 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 | |||||
Net loss | (6,480,708) | ||||
Balance at Mar. 31, 2022 | $ 8,236 | 298,351,897 | (290,712,648) | (979) | 7,646,506 |
Balance (in shares) at Mar. 31, 2022 | 8,234,320 | ||||
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 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock based compensation expense | 272,915 | 272,915 | |||
Deemed dividend - warrant repricing | 110,105 | (110,105) | |||
Common stock issued in public offering, net of offering costs | $ 748 | 4,091,085 | 4,091,833 | ||
Common stock issued in public offering, net of offering costs (in shares) | 748,200 | ||||
Fair value of warrants issued in connection with public offering | (3,350,400) | (3,350,400) | |||
Net loss | (1,758,685) | (1,112) | (1,759,797) | ||
Balance at Mar. 31, 2022 | $ 8,236 | 298,351,897 | (290,712,648) | (979) | 7,646,506 |
Balance (in shares) at Mar. 31, 2022 | 8,234,320 | ||||
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 | ||||
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 | |||||
Net loss | $ (3,293,070) | ||||
Balance at Mar. 31, 2023 | $ 12,909 | 305,751,360 | (295,755,117) | (40,931) | $ 9,968,221 |
Balance (in shares) at Mar. 31, 2023 | 12,908,520 | 12,908,520 | |||
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 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock based compensation expense | 258,604 | 258,604 | |||
Net loss | 588,343 | (37,167) | 551,176 | ||
Balance at Mar. 31, 2023 | $ 12,909 | $ 305,751,360 | $ (295,755,117) | $ (40,931) | $ 9,968,221 |
Balance (in shares) at Mar. 31, 2023 | 12,908,520 | 12,908,520 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (3,293,070) | $ (6,480,708) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 683,422 | 641,615 |
Gain on sale of property and equipment | (6,083) | 0 |
Unrealized gain on change in fair value of warrants classified as a liability | (613,100) | (782,500) |
Stock-based compensation | 352,352 | 1,972,835 |
Change in provision for bad debts | (290,022) | 10,000 |
Change in operating assets and liabilities: | ||
Accounts receivable | 1,389,855 | 206,227 |
Inventories | 236,159 | 725,965 |
Prepaid expenses and other current assets and deposits | 398,523 | (842,071) |
Accounts payable and accrued liabilities | (746,495) | 472,201 |
Deferred revenue | (280,259) | 112,656 |
Net cash used in operating activities | (2,168,718) | (3,963,780) |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 45,000 | 0 |
Purchase of property and equipment | (54,339) | (170,217) |
Net cash used in investing activities | (9,339) | (170,217) |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock and warrants | 0 | 4,091,833 |
Net cash provided by financing activities | 0 | 4,091,833 |
Net decrease in cash, cash equivalents and restricted cash | (2,178,057) | (42,164) |
Cash, cash equivalents and restricted cash at beginning of period | 15,215,285 | 6,554,948 |
Cash, cash equivalents and restricted cash at end of period | 13,037,228 | 6,512,784 |
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 | 20,321 | 76,178 |
Deemed dividend warrant modifications | 0 | 110,105 |
Leased assets obtained in exchange for new operating lease liabilities | 1,545,916 | 0 |
Fair value of warrants issued | 0 | 3,350,400 |
Issuance of stock options for payment of accrued bonus | $ 0 | $ 300,000 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 6 Months Ended |
Mar. 31, 2023 | |
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 and genetic 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 | 6 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023, and for the three and six-month periods ended March 31, 2023, and 2022 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 and six-month periods ended March 31, 2023 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, Applied DNA Sciences India Private Limited, and 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 $295,755,117 as of March 31, 2023. The Company incurred a net loss of $3,293,070 and generated negative operating cash flow of $2,168,718 for the six-month period ended March 31, 2023. At March 31, 2023, the Company had cash and cash equivalents of $12,287,228 and working capital of $11,724,175. 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 March 31, 2023, 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. Historically, a majority of the Company’s revenue attributable to its MDx Testing Services has been derived from its safeCircle COVID-19 testing solutions. On April 11, 2023, the U.S. National Emergency in response to the COVID-19 pandemic was terminated. While the Company continues to support several safeCircle customers, it is currently observing a market decrease in demand for COVID-19 testing, which the Company believes will result in significantly lower revenues from its safeCircle COVID-19 testing solutions in subsequent quarters. Also, on May 1, 2023, the Company received notice from the City University of New York (“CUNY”), its largest safeCircle COVID-19 testing solution customer, that CUNY is terminating their COVID-19 testing contract with ADCL no later than June 30, 2023, subject to a wind-down plan to be negotiated by the parties These factors could also have a negative impact on the Company’s future liquidity. 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 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: March 31, March 31, 2023 2022 Research and development services (over-time) $ 87,907 $ 219,898 Clinical laboratory testing services (point-in-time) 3,003,022 4,331,867 Clinical laboratory testing services (over-time) 938,080 1,158,375 Product and authentication services (point-in-time): Supply chain 27,636 115,463 Large Scale DNA Production 253,626 — Asset marking 97,343 141,657 MDx test kits and supplies — 180,023 Total $ 4,407,614 $ 6,147,283 Six Month Period Ended: March 31, March 31, 2023 2022 Research and development services (over-time) $ 213,964 $ 325,591 Clinical laboratory testing services (point-in-time) 6,077,436 6,205,589 Clinical laboratory testing services (over-time) 2,377,961 2,484,775 Product and authentication services (point-in-time): Supply chain 439,973 527,295 Large Scale DNA Production 381,131 — Asset marking 179,901 246,895 MDx test kits and supplies — 522,844 Total $ 9,670,366 $ 10,312,989 NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Revenue Recognition Contract balances As of March 31, 2023, 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, March 31, $ Balance sheet classification 2022 2023 change Contract liabilities Deferred revenue $ 563,557 $ 283,298 $ 280,259 For the three and six-month periods ended March 31, 2023, the Company recognized $2,082 and $343,367 of revenue that was included in Contract liabilities as of October 1, 2022, respectively. 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 Income (Loss) Per Share The Company presents income (loss) per share utilizing a dual presentation of basic and diluted income (loss) per share. Basic income (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 and six-month periods ended March 31, 2023 and 2022, 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 income (loss) per share because to do so would have been anti-dilutive for the three and six-month periods ended March 31, 2023 and 2022 are as follows: 2023 2022 Warrants 7,295,588 2,239,963 Restricted Stock Units 282,640 — Stock options 2,206,336 1,067,614 Total 9,784,564 3,307,577 Cash and Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows: March 31, September 30, 2023 2022 Cash and cash equivalents $ 12,287,228 $ 15,215,285 Restricted cash 750,000 — Total cash, cash equivalents and restricted cash $ 13,037,228 $ 15,215,285 The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its February 2023 standby letter of credit agreement related to its new operating lease. See Note F for further details. NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued 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 March 31, 2023, the Company had cash and cash equivalents of approximately $11.6 million in excess of the FDIC insurance limit. The Company’s revenues earned from sale of products and services for the three and six-month periods ended March 31, 2023 included an aggregate of 85% and 84%, respectively from two customers within the MDx Testing Services segment. Two customers from within the MDx Testing Services segment accounted for 53% and 14%, respectively of the Company’s revenues earned from sale of products and services for the three-month period ended March 31, 2022. One customer from within the MDx Testing Services segment accounted for 51% of the Company's revenues earned from sales of products and services for the six-month period ended March 31, 2022. Two customers accounted for 86% of the Company’s accounts receivable at March 31, 2023 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 March 31, 2023, 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 adoption of ASU 2016-13 is not expected to have a significant impact on the Company’s 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 | 6 Months Ended |
Mar. 31, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE C — INVENTORIES Inventories consist of the following: March 31, September 30, 2023 2022 (unaudited) Raw materials $ 305,775 $ 471,947 Work-in-progress 26,425 55,817 Finished goods 33,885 74,480 Total $ 366,085 $ 602,244 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 6 Months Ended |
Mar. 31, 2023 | |
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: March 31, September 30, 2023 2022 (unaudited) Accounts payable $ 1,647,164 $ 1,744,105 Accrued salaries payable 789,199 1,458,661 Other accrued expenses 459,215 418,985 Total $ 2,895,578 $ 3,621,751 |
WARRANTS, STOCK OPTIONS AND RES
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | 6 Months Ended |
Mar. 31, 2023 | |
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | |
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | NOTE E —WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS 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 March 31, 2023 7,295,588 $ 3.65 Options For the three and six-month periods ended March 31, 2023, the Company granted 308,333 options to certain officers of the Company. These options have a ten-year term and vest 25% per year commencing on the first anniversary of the grant date. Also, during the three and six-month periods ended March 31, 2023, the Company granted 694,670 options to non-employee board of director members. The options granted to non-employee board of directors have a ten-year term and vest on the one-year anniversary of the date of grant. The fair value of options granted during the three and six-month periods ended March 31, 2023, was determined using the Black Scholes Option Pricing Model. For the purposes of the valuation model, the Company used the simplified method for determining the granted options expected lives. The simplified method is used since the Company does not have adequate historical data to utilize in calculating the expected term of options. The fair value for options granted during the three and six-month periods ended March 31, 2023 was calculated using the following weighted average assumptions: stock price $1.27 ; exercise price $1.27 ; expected term 5.74 years; dividend yield 0 ; volatility 157% ; and risk-free rate of 3.64% . The weighted average grant date fair value per share for the options granted during the three and six-month periods ended March 31, 2023 was $1.20 . Restricted Stock Units During the three and six-month periods ended March 31, 2023, the Company granted 282,640 restricted stock units (“RSUs”) to certain officers of the Company. These RSUs vest on the first anniversary of the grant date. The fair value of the RSUs granted was the closing stock price on the date of grant. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2023 | |
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 Company entered into an amended lease agreement on February 1, 2023. The initial term is for three years and expires on February 1, 2026. The lease for the corporate headquarters requires monthly payments of approximately $48,861 , which is adjusted annually based on the US Consumer Price Index (“CPI). In lieu of a security deposit, the Company provided a standby letter of credit of $750,000 . In addition, the Company also has 2,500 square feet of laboratory space, which it entered into an amended lease agreement for on February 1, 2023. The initial lease term for the laboratory space is one year from the commencement date. The lease requires monthly payments of $8,750 . 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 laboratory lease, as well as the testing facility in Ahmedabad are both considered short-term lease obligations. The total rent expense for the three and six-month periods ended March 31, 2022 were $165,871 and $314,697 , respectively. The components of lease expense are as follows: Three-month Six-month period ended period ended Lease Cost March 31, 2023 March 31, 2023 Finance lease cost: Amortization of right-of-use assets $ — $ — Interest on lease liabilities — — Operating lease cost 97,722 97,722 Short-term lease cost 68,149 216,975 Variable lease cost — — Total lease cost $ 165,871 $ 314,697 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 97,722 Right-of-use assets obtained in exchange for new operating lease liabilities 1,545,916 Weighted-average remaining lease term — operating leases 2.8 years Weighted-average discount rate — operating leases 9.1 % Maturities of operating lease liabilities as of March 31, 2023 were as follows: Six-month period ended Maturity of Lease Liabilities March 31, 2023 Operating Leases 2023 (excluding the six months ended March 31, 2023) $ 293,167 2024 586,334 2025 586,334 2026 195,445 2027 — Thereafter — Total lease payments 1,661,280 Less: interest (190,667) Present value of lease liabilities $ 1,470,613 NOTE F — COMMITMENTS AND CONTINGENCIES continued 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 an annual special aggregate cash incentive bonus of up to $800,000 each fiscal year, $300,000 of which is payable if and when annual revenue reaches $8 million for such fiscal year, plus an additional $100,000 payable for each additional $2 million of annual revenue in excess of $8 million for such fiscal year. 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. In accordance with the terms of his employment agreement, for the six-month period ended March 31, 2023, the CEO earned a $300,000 bonus as the Company’s year to date revenue was greater than $8 million. The bonus has not yet been paid and is included in accounts payable and accrued liabilities in the condensed consolidated balance sheet. 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 | 6 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ 255,626 $ — $ 41,828 $ 297,454 Service revenues 83,906 — 85,152 169,058 Clinical laboratory service revenues — 3,971,582 — 3,971,582 Less intersegment revenues — (30,480) — (30,480) Total revenues $ 339,532 $ 3,941,102 $ 126,980 $ 4,407,614 Gross profit $ 215,477 $ 1,650,113 $ (58,155) $ 1,807,435 (Loss) income from segment operations (a) $ (1,054,123) $ 492,288 $ (914,736) $ (1,476,571) NOTE G – SEGMENT INFORMATION, continued Information regarding operations by segment for the three-month period ended March 31, 2022 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ — $ 180,023 $ 228,328 $ 408,351 Service revenues 158,243 — 90,447 248,690 Clinical laboratory service revenues — 5,623,922 — 5,623,922 Less intersegment revenues — (133,680) — (133,680) Total revenues $ 158,243 $ 5,670,265 $ 318,775 $ 6,147,283 Gross profit $ 158,243 $ 2,335,169 $ (4,927) $ 2,488,485 (Loss) income from segment operations (a) $ (1,049,207) $ 1,084,388 $ (1,292,632) $ (1,257,451) Information regarding operations by segment for the six-month period ended March 31, 2023 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ 383,132 $ — $ 430,718 $ 813,850 Service revenues 205,649 — 195,470 401,119 Clinical laboratory service revenues — 8,537,397 — 8,537,397 Less intersegment revenues — (82,000) — (82,000) Total revenues $ 588,781 $ 8,455,397 $ 626,188 $ 9,670,366 Gross profit $ 386,401 $ 3,583,332 $ 215,385 $ 4,185,118 (Loss) income from segment operations (a) $ (1,906,376) $ 1,602,172 $ (1,389,451) $ (1,693,655) Information regarding operations by segment for the six-month period ended March 31, 2022 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ — $ 522,844 $ 711,818 $ 1,234,662 Service revenues 247,681 — 140,282 387,963 Clinical laboratory service revenues — 8,973,580 — 8,973,580 Less intersegment revenues — (283,216) — (283,216) Total revenues $ 247,681 $ 9,213,208 $ 852,100 $ 10,312,989 Gross profit $ 247,681 $ 3,155,859 $ 194,083 $ 3,597,623 (Loss) income from segment operations (a) $ (1,973,984) $ 749,400 $ (2,189,032) $ (3,413,616) NOTE G – SEGMENT INFORMATION, continued Reconciliation of segment loss from operations to consolidated loss before provision for income taxes is as follows: Three-Month Period Ended: March 31, 2023 2022 Loss from operations of reportable segments $ (1,476,571) $ (1,257,451) General corporate expenses (b) (1,227,453) (896,785) Interest income 3,639 5,540 Unrealized gain on change in fair value of warrants classified as a liability 3,250,900 782,500 Transaction cost allocated to warrant liabilities — (391,335) Other income (expense), net 661 (2,266) Consolidated income (loss) before provision for income taxes $ 551,176 $ (1,759,797) Six-Month Period Ended: March 31, 2023 2022 Loss from operations of reportable segements $ (1,693,655) $ (3,413,616) General corporate expenses (b) (2,229,347) (3,447,197) Interest income 7,325 5,813 Unrealized gain on change in fair value of warrants classified as a liability 613,100 782,500 Transaction cost allocated to warrant liabilities — (391,335) Other income (expense), net 9,507 (16,873) Consolidated loss before provision for income taxes $ (3,293,070) $ (6,480,708) (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 | 6 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and summarizes the significant unobservable inputs in fair value measurement of Level 3 financial assets and liabilities as of March 31, 2023. The Company did not have any assets or liabilities categorized as Level 1 or 2 as of March 31, 2023. Fair value at Valuation Unobservable Weighted March 31, 2023 Technique Input Average Liabilities: Common Warrants $ 1,429,000 Monte Carlo simulation Annualized volatility 160.00 % Series A Warrants $ 2,768,000 Monte Carlo simulation Annualized volatility 160.00 % Series B Warrants $ 329,300 Monte Carlo simulation Annualized volatility 175.00 % NOTE H – FAIR VALUE OF FINANCIAL INSTRUMENTS, continued The change in fair value of the Warrants classified as a liability for the three-month period ended March 31, 2023 is summarized as follows: Common Warrants Series A Warrants Series B Warrants Fair value at January 1, 2023 $ 2,187,000 $ 4,269,000 $ 1,321,200 Change in fair value (758,000) (1,501,000) (991,900) Fair Value at March 31, 2023 $ 1,429,000 $ 2,768,000 329,300 The change in fair value of the Warrants classified as a liability for the six-month period ended March 31, 2023 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 (48,000) (115,000) (450,100) Fair Value at March 31, 2023 $ 1,429,000 $ 2,768,000 329,300 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2023 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |
Interim Financial Statements | Interim Financial Statements The accompanying condensed consolidated financial statements as of March 31, 2023, and for the three and six-month periods ended March 31, 2023, and 2022 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 and six-month periods ended March 31, 2023 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, Applied DNA Sciences India Private Limited, and 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 $295,755,117 as of March 31, 2023. The Company incurred a net loss of $3,293,070 and generated negative operating cash flow of $2,168,718 for the six-month period ended March 31, 2023. At March 31, 2023, the Company had cash and cash equivalents of $12,287,228 and working capital of $11,724,175. 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 March 31, 2023, 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. Historically, a majority of the Company’s revenue attributable to its MDx Testing Services has been derived from its safeCircle COVID-19 testing solutions. On April 11, 2023, the U.S. National Emergency in response to the COVID-19 pandemic was terminated. While the Company continues to support several safeCircle customers, it is currently observing a market decrease in demand for COVID-19 testing, which the Company believes will result in significantly lower revenues from its safeCircle COVID-19 testing solutions in subsequent quarters. Also, on May 1, 2023, the Company received notice from the City University of New York (“CUNY”), its largest safeCircle COVID-19 testing solution customer, that CUNY is terminating their COVID-19 testing contract with ADCL no later than June 30, 2023, subject to a wind-down plan to be negotiated by the parties These factors could also have a negative impact on the Company’s future liquidity. 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 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: March 31, March 31, 2023 2022 Research and development services (over-time) $ 87,907 $ 219,898 Clinical laboratory testing services (point-in-time) 3,003,022 4,331,867 Clinical laboratory testing services (over-time) 938,080 1,158,375 Product and authentication services (point-in-time): Supply chain 27,636 115,463 Large Scale DNA Production 253,626 — Asset marking 97,343 141,657 MDx test kits and supplies — 180,023 Total $ 4,407,614 $ 6,147,283 Six Month Period Ended: March 31, March 31, 2023 2022 Research and development services (over-time) $ 213,964 $ 325,591 Clinical laboratory testing services (point-in-time) 6,077,436 6,205,589 Clinical laboratory testing services (over-time) 2,377,961 2,484,775 Product and authentication services (point-in-time): Supply chain 439,973 527,295 Large Scale DNA Production 381,131 — Asset marking 179,901 246,895 MDx test kits and supplies — 522,844 Total $ 9,670,366 $ 10,312,989 NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES, continued Revenue Recognition Contract balances As of March 31, 2023, 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, March 31, $ Balance sheet classification 2022 2023 change Contract liabilities Deferred revenue $ 563,557 $ 283,298 $ 280,259 For the three and six-month periods ended March 31, 2023, the Company recognized $2,082 and $343,367 of revenue that was included in Contract liabilities as of October 1, 2022, respectively. |
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 Income (Loss) Per Share | Net Income (Loss) Per Share The Company presents income (loss) per share utilizing a dual presentation of basic and diluted income (loss) per share. Basic income (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 and six-month periods ended March 31, 2023 and 2022, 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 income (loss) per share because to do so would have been anti-dilutive for the three and six-month periods ended March 31, 2023 and 2022 are as follows: 2023 2022 Warrants 7,295,588 2,239,963 Restricted Stock Units 282,640 — Stock options 2,206,336 1,067,614 Total 9,784,564 3,307,577 |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows: March 31, September 30, 2023 2022 Cash and cash equivalents $ 12,287,228 $ 15,215,285 Restricted cash 750,000 — Total cash, cash equivalents and restricted cash $ 13,037,228 $ 15,215,285 The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its February 2023 standby letter of credit agreement related to its new operating lease. See Note F for further details. |
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 March 31, 2023, the Company had cash and cash equivalents of approximately $11.6 million in excess of the FDIC insurance limit. The Company’s revenues earned from sale of products and services for the three and six-month periods ended March 31, 2023 included an aggregate of 85% and 84%, respectively from two customers within the MDx Testing Services segment. Two customers from within the MDx Testing Services segment accounted for 53% and 14%, respectively of the Company’s revenues earned from sale of products and services for the three-month period ended March 31, 2022. One customer from within the MDx Testing Services segment accounted for 51% of the Company's revenues earned from sales of products and services for the six-month period ended March 31, 2022. Two customers accounted for 86% of the Company’s accounts receivable at March 31, 2023 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 March 31, 2023, 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 adoption of ASU 2016-13 is not expected to have a significant impact on the Company’s 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) | 6 Months Ended |
Mar. 31, 2023 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |
Schedule of revenues disaggregated by business operations and timing of revenue recognition | Three Month Period Ended: March 31, March 31, 2023 2022 Research and development services (over-time) $ 87,907 $ 219,898 Clinical laboratory testing services (point-in-time) 3,003,022 4,331,867 Clinical laboratory testing services (over-time) 938,080 1,158,375 Product and authentication services (point-in-time): Supply chain 27,636 115,463 Large Scale DNA Production 253,626 — Asset marking 97,343 141,657 MDx test kits and supplies — 180,023 Total $ 4,407,614 $ 6,147,283 Six Month Period Ended: March 31, March 31, 2023 2022 Research and development services (over-time) $ 213,964 $ 325,591 Clinical laboratory testing services (point-in-time) 6,077,436 6,205,589 Clinical laboratory testing services (over-time) 2,377,961 2,484,775 Product and authentication services (point-in-time): Supply chain 439,973 527,295 Large Scale DNA Production 381,131 — Asset marking 179,901 246,895 MDx test kits and supplies — 522,844 Total $ 9,670,366 $ 10,312,989 |
Schedule of opening and closing contract balances | October 1, March 31, $ Balance sheet classification 2022 2023 change Contract liabilities Deferred revenue $ 563,557 $ 283,298 $ 280,259 |
Schedule of reconciliation of cash, cash equivalents and restricted cash to amounts shown in statement of cash flows | March 31, September 30, 2023 2022 Cash and cash equivalents $ 12,287,228 $ 15,215,285 Restricted cash 750,000 — Total cash, cash equivalents and restricted cash $ 13,037,228 $ 15,215,285 |
Schedule of anti-dilutive securities not included computation of net loss per share | 2023 2022 Warrants 7,295,588 2,239,963 Restricted Stock Units 282,640 — Stock options 2,206,336 1,067,614 Total 9,784,564 3,307,577 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
INVENTORIES | |
Schedule of inventories | March 31, September 30, 2023 2022 (unaudited) Raw materials $ 305,775 $ 471,947 Work-in-progress 26,425 55,817 Finished goods 33,885 74,480 Total $ 366,085 $ 602,244 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
Schedule of accounts payable and accrued liabilities | March 31, September 30, 2023 2022 (unaudited) Accounts payable $ 1,647,164 $ 1,744,105 Accrued salaries payable 789,199 1,458,661 Other accrued expenses 459,215 418,985 Total $ 2,895,578 $ 3,621,751 |
WARRANTS, STOCK OPTIONS AND R_2
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | |
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 March 31, 2023 7,295,588 $ 3.65 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of components of lease expense | Three-month Six-month period ended period ended Lease Cost March 31, 2023 March 31, 2023 Finance lease cost: Amortization of right-of-use assets $ — $ — Interest on lease liabilities — — Operating lease cost 97,722 97,722 Short-term lease cost 68,149 216,975 Variable lease cost — — Total lease cost $ 165,871 $ 314,697 |
Schedule of other information | Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 97,722 Right-of-use assets obtained in exchange for new operating lease liabilities 1,545,916 Weighted-average remaining lease term — operating leases 2.8 years Weighted-average discount rate — operating leases 9.1 % |
Schedule of maturities of operating lease liabilities | Six-month period ended Maturity of Lease Liabilities March 31, 2023 Operating Leases 2023 (excluding the six months ended March 31, 2023) $ 293,167 2024 586,334 2025 586,334 2026 195,445 2027 — Thereafter — Total lease payments 1,661,280 Less: interest (190,667) Present value of lease liabilities $ 1,470,613 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
SEGMENT INFORMATION | |
Schedule of information regarding operations by segment | Information regarding operations by segment for the three-month period ended March 31, 2023 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ 255,626 $ — $ 41,828 $ 297,454 Service revenues 83,906 — 85,152 169,058 Clinical laboratory service revenues — 3,971,582 — 3,971,582 Less intersegment revenues — (30,480) — (30,480) Total revenues $ 339,532 $ 3,941,102 $ 126,980 $ 4,407,614 Gross profit $ 215,477 $ 1,650,113 $ (58,155) $ 1,807,435 (Loss) income from segment operations (a) $ (1,054,123) $ 492,288 $ (914,736) $ (1,476,571) Information regarding operations by segment for the three-month period ended March 31, 2022 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ — $ 180,023 $ 228,328 $ 408,351 Service revenues 158,243 — 90,447 248,690 Clinical laboratory service revenues — 5,623,922 — 5,623,922 Less intersegment revenues — (133,680) — (133,680) Total revenues $ 158,243 $ 5,670,265 $ 318,775 $ 6,147,283 Gross profit $ 158,243 $ 2,335,169 $ (4,927) $ 2,488,485 (Loss) income from segment operations (a) $ (1,049,207) $ 1,084,388 $ (1,292,632) $ (1,257,451) Information regarding operations by segment for the six-month period ended March 31, 2023 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ 383,132 $ — $ 430,718 $ 813,850 Service revenues 205,649 — 195,470 401,119 Clinical laboratory service revenues — 8,537,397 — 8,537,397 Less intersegment revenues — (82,000) — (82,000) Total revenues $ 588,781 $ 8,455,397 $ 626,188 $ 9,670,366 Gross profit $ 386,401 $ 3,583,332 $ 215,385 $ 4,185,118 (Loss) income from segment operations (a) $ (1,906,376) $ 1,602,172 $ (1,389,451) $ (1,693,655) Information regarding operations by segment for the six-month period ended March 31, 2022 is as follows: Therapeutic DNA MDx Testing DNA Tagging and Production Services Security Products Consolidated Revenues: Product revenues $ — $ 522,844 $ 711,818 $ 1,234,662 Service revenues 247,681 — 140,282 387,963 Clinical laboratory service revenues — 8,973,580 — 8,973,580 Less intersegment revenues — (283,216) — (283,216) Total revenues $ 247,681 $ 9,213,208 $ 852,100 $ 10,312,989 Gross profit $ 247,681 $ 3,155,859 $ 194,083 $ 3,597,623 (Loss) income from segment operations (a) $ (1,973,984) $ 749,400 $ (2,189,032) $ (3,413,616) |
Schedule of reconciliation of segment loss from operations to corporate loss | Three-Month Period Ended: March 31, 2023 2022 Loss from operations of reportable segments $ (1,476,571) $ (1,257,451) General corporate expenses (b) (1,227,453) (896,785) Interest income 3,639 5,540 Unrealized gain on change in fair value of warrants classified as a liability 3,250,900 782,500 Transaction cost allocated to warrant liabilities — (391,335) Other income (expense), net 661 (2,266) Consolidated income (loss) before provision for income taxes $ 551,176 $ (1,759,797) Six-Month Period Ended: March 31, 2023 2022 Loss from operations of reportable segements $ (1,693,655) $ (3,413,616) General corporate expenses (b) (2,229,347) (3,447,197) Interest income 7,325 5,813 Unrealized gain on change in fair value of warrants classified as a liability 613,100 782,500 Transaction cost allocated to warrant liabilities — (391,335) Other income (expense), net 9,507 (16,873) Consolidated loss before provision for income taxes $ (3,293,070) $ (6,480,708) |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 Technique Input Average Liabilities: Common Warrants $ 1,429,000 Monte Carlo simulation Annualized volatility 160.00 % Series A Warrants $ 2,768,000 Monte Carlo simulation Annualized volatility 160.00 % Series B Warrants $ 329,300 Monte Carlo simulation Annualized volatility 175.00 % |
Schedule of change in fair value of warrants | Common Warrants Series A Warrants Series B Warrants Fair value at January 1, 2023 $ 2,187,000 $ 4,269,000 $ 1,321,200 Change in fair value (758,000) (1,501,000) (991,900) Fair Value at March 31, 2023 $ 1,429,000 $ 2,768,000 329,300 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 (48,000) (115,000) (450,100) Fair Value at March 31, 2023 $ 1,429,000 $ 2,768,000 329,300 |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) | 6 Months Ended |
Mar. 31, 2023 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 | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | $ 4,407,614 | $ 6,147,283 | $ 9,670,366 | $ 10,312,989 |
Research and development services (over-time) | ||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | 87,907 | 219,898 | 213,964 | 325,591 |
Clinical laboratory testing services (point-in-time) | ||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | 3,003,022 | 4,331,867 | 6,077,436 | 6,205,589 |
Clinical laboratory testing services (over-time) | ||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | 938,080 | 1,158,375 | 2,377,961 | 2,484,775 |
Supply chain | ||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | 27,636 | 115,463 | 439,973 | 527,295 |
Large Scale DNA Production | ||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | 253,626 | 381,131 | ||
Asset marking | ||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | $ 97,343 | 141,657 | $ 179,901 | 246,895 |
MDx test kits and supplies | ||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Total | $ 180,023 | $ 522,844 |
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 | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2023 | Oct. 01, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||
Change in contract liabilities | $ 280,259 | ||
Revenue recognized in contract liabilities | $ 2,082 | 343,367 | |
Contract liabilities | |||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||
Deferred revenue | $ 283,298 | $ 283,298 | $ 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 | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 9,784,564 | 3,307,577 |
Warrants | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 7,295,588 | 2,239,963 |
Stock options | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 2,206,336 | 1,067,614 |
Restricted Stock Units | ||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||
Antidilutive securities excluded from the computation of diluted net loss per share | 282,640 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Cash and Cash Equivalents and Restricted Cash (Details) (Imported) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | ||||
Cash and cash equivalents | $ 12,287,228 | $ 15,215,285 | ||
Restricted cash | 750,000 | |||
Total cash, cash equivalents and restricted cash | $ 13,037,228 | $ 15,215,285 | $ 6,512,784 | $ 6,554,948 |
BASIS OF PRESENTATION AND SUM_8
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2023 USD ($) customer | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2023 USD ($) customer segment | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) customer | |
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||||||
Accumulated deficit | $ 295,755,117 | $ 295,755,117 | $ 292,500,088 | ||||
Net loss | (551,176) | $ 3,844,246 | $ 1,759,797 | $ 4,720,911 | 3,293,070 | $ 6,480,708 | |
Operating cash flow | 2,168,718 | ||||||
Cash and cash equivalents | 12,287,228 | 12,287,228 | $ 15,215,285 | ||||
Working capital | 11,724,175 | $ 11,724,175 | |||||
Number of reportable segments | segment | 3 | ||||||
Transfers from Level 2 to Level 1, Assets | 0 | $ 0 | |||||
Transfers from Level 1 to Level 2, Assets | 0 | 0 | |||||
Transfers from Level 2 to Level 1, Liabilities | 0 | 0 | |||||
Transfers from Level 1 to Level 2, Liabilities | 0 | 0 | |||||
Transfers Into Level 3, Liabilities | 0 | ||||||
Transfers out of Level 3, Liabilities | 0 | ||||||
Excess of FDIC insurance limit | $ 11,600,000 | $ 11,600,000 | |||||
Customer Concentration Risk | Total Revenue | |||||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||||||
Number of customers | customer | 2 | 2 | |||||
Customer Concentration Risk | Total Revenue | One customer | |||||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||||||
Concentration risk percentage | 85% | 53% | 85% | 51% | |||
Number of customers | customer | 1 | ||||||
Customer Concentration Risk | Total Revenue | Two customer | |||||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||||||
Concentration risk percentage | 84% | 14% | 84% | ||||
Customer Concentration Risk | Accounts Receivable | |||||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||||||
Number of customers | customer | 2 | 2 | |||||
Customer Concentration Risk | Accounts Receivable | Two customer | |||||||
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES | |||||||
Concentration risk percentage | 86% | 89% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
INVENTORIES | ||
Raw materials | $ 305,775 | $ 471,947 |
Work-in-progress | 26,425 | 55,817 |
Finished goods | 33,885 | 74,480 |
Total | $ 366,085 | $ 602,244 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||
Accounts payable | $ 1,647,164 | $ 1,744,105 |
Accrued salaries payable | 789,199 | 1,458,661 |
Other accrued expenses | 459,215 | 418,985 |
Total | $ 2,895,578 | $ 3,621,751 |
WARRANTS, STOCK OPTIONS AND R_3
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS - Transactions involving warrants (Details) | 6 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Shares | |
Balance at October 1, 2022 | shares | 7,313,963 |
Cancelled or expired | shares | (18,375) |
Balance at March 31, 2023 | 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 March 31, 2023 | $ / shares | $ 3.65 |
WARRANTS, STOCK OPTIONS AND R_4
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS - Options (Details) - Options | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 $ / shares shares | Mar. 31, 2023 $ / shares shares | |
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | ||
Offering price (in dollars per share) | $ 1.27 | $ 1.27 |
exercise price | $ 1.27 | $ 1.27 |
Expected term | 5 years 8 months 26 days | 5 years 8 months 26 days |
Fair value of options, dividend yield | 0% | 0% |
Fair value of options, volatility rate | 157% | 157% |
Fair value of options, risk free rate | 3.64% | 3.64% |
Weighted average grant date fair value per share for options granted | $ 1.20 | $ 1.20 |
Officers of the Company | ||
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | ||
Number of shares granted | shares | 308,333 | 308,333 |
Term of option | 10 years | |
Officers of the Company | Vest on first anniversary of grant date | ||
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | ||
Vesting percentage | 25% | |
Non-employee board of director | ||
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | ||
Number of shares granted | shares | 694,670 | 694,670 |
Term of option | 10 years | |
Non-employee board of director | Vest on first anniversary of grant date | ||
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | ||
Vesting period | 1 year |
WARRANTS, STOCK OPTIONS AND R_5
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS - Restricted Stock Units (Details) - shares | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 | Mar. 31, 2023 | |
Restricted Stock Units | Vest on first anniversary of grant date | ||
WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS | ||
Shares granted | 282,640 | 282,640 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating Leases (Details) | 3 Months Ended | 6 Months Ended | ||||
Feb. 01, 2023 ft² | Nov. 01, 2017 USD ($) ft² | Jun. 15, 2013 ft² | Mar. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
COMMITMENTS AND CONTINGENCIES | ||||||
Area of property under operating lease | ft² | 30,000 | |||||
Initial term expired period | 3 years | |||||
Area of laboratory space | ft² | 2,500 | |||||
Lease for satellite testing | ft² | 1,108 | |||||
Initial lease term | 3 years | |||||
Base rent during initial lease term per annum | $ 6,500 | |||||
Total lease rental expenses | $ 165,871 | $ 314,697 | ||||
Leased office space for corporate headquarters | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||
Monthly payments of lease | $ 48,861 | |||||
Leased office space for Laboratory | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||
Monthly payments of lease | 8,750 | |||||
Initial lease term | 1 year | |||||
Letter of credit | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||
Letter of credit amount | $ 750,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Components of lease expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 | Mar. 31, 2023 | |
Lease Cost | ||
Operating lease cost | $ 97,722 | $ 97,722 |
Short-term lease cost | 68,149 | 216,975 |
Total lease cost | $ 165,871 | $ 314,697 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Other Information (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | ||
Operating cash flows from operating leases | $ 97,722 | |
Leased assets obtained in exchange for new operating lease liabilities | $ 1,545,916 | $ 0 |
Weighted-average remaining lease term - operating leases | 2 years 9 months 18 days | |
Weighted-average discount rate - operating leases | 9.10% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Maturities of operating lease liabilities (Details) | Mar. 31, 2023 USD ($) |
Maturity of Lease Liabilities | |
2023 (excluding the six months ended March 31, 2023) | $ 293,167 |
2024 | 586,334 |
2025 | 586,334 |
2026 | 195,445 |
Total lease payments | 1,661,280 |
Less: interest | (190,667) |
Present value of lease liabilities | $ 1,470,613 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Employment Agreement (Details) - Employment Agreement - CEO - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Oct. 29, 2021 | Jul. 28, 2017 | Mar. 31, 2023 | 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. | ||||
Approved bonus | $ 300,000 | ||||
Revenue bonus recorded to long term accrued liabilities | $ 8,000,000 |
SEGMENT INFORMATION - Informati
SEGMENT INFORMATION - Information regarding operations by segment (Details) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | |
SEGMENT INFORMATION | ||||
Number of reportable segments | segment | 3 | |||
Total revenues | $ 4,407,614 | $ 6,147,283 | $ 9,670,366 | $ 10,312,989 |
Gross profit | 1,807,435 | 2,488,485 | 4,185,118 | 3,597,623 |
(Loss) income from segment operations | (2,704,024) | (2,154,236) | (3,923,002) | (6,860,813) |
Product revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 297,454 | 408,351 | 813,850 | 1,234,662 |
Service revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 169,058 | 248,690 | 401,119 | 387,963 |
Clinical laboratory service revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 3,941,102 | 5,490,242 | 8,455,397 | 8,690,364 |
Therapeutic DNA Production | ||||
SEGMENT INFORMATION | ||||
Total revenues | 339,532 | 158,243 | 588,781 | 247,681 |
Gross profit | 215,477 | 158,243 | 386,401 | 247,681 |
Therapeutic DNA Production | Product revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 255,626 | 383,132 | ||
Therapeutic DNA Production | Service revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 83,906 | 158,243 | 205,649 | 247,681 |
MDx Testing Services | ||||
SEGMENT INFORMATION | ||||
Total revenues | 3,941,102 | 5,670,265 | 8,455,397 | 9,213,208 |
Gross profit | 1,650,113 | 2,335,169 | 3,583,332 | 3,155,859 |
MDx Testing Services | Product revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 180,023 | 522,844 | ||
DNA Tagging and Security Products | ||||
SEGMENT INFORMATION | ||||
Total revenues | 126,980 | 318,775 | 626,188 | 852,100 |
Gross profit | (58,155) | (4,927) | 215,385 | 194,083 |
DNA Tagging and Security Products | Product revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 41,828 | 228,328 | 430,718 | 711,818 |
DNA Tagging and Security Products | Service revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 85,152 | 90,447 | 195,470 | 140,282 |
Operating segment | ||||
SEGMENT INFORMATION | ||||
(Loss) income from segment operations | (1,476,571) | (1,257,451) | (1,693,655) | (3,413,616) |
Operating segment | Clinical laboratory service revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 3,971,582 | 5,623,922 | 8,537,397 | 8,973,580 |
Operating segment | Therapeutic DNA Production | ||||
SEGMENT INFORMATION | ||||
(Loss) income from segment operations | (1,054,123) | (1,049,207) | (1,906,376) | (1,973,984) |
Operating segment | MDx Testing Services | ||||
SEGMENT INFORMATION | ||||
(Loss) income from segment operations | 492,288 | 1,084,388 | 1,602,172 | 749,400 |
Operating segment | MDx Testing Services | Clinical laboratory service revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | 3,971,582 | 5,623,922 | 8,537,397 | 8,973,580 |
Operating segment | DNA Tagging and Security Products | ||||
SEGMENT INFORMATION | ||||
(Loss) income from segment operations | (914,736) | (1,292,632) | (1,389,451) | (2,189,032) |
Less intersegment revenues | ||||
SEGMENT INFORMATION | ||||
Total revenues | (30,480) | (133,680) | (82,000) | (283,216) |
Less intersegment revenues | MDx Testing Services | ||||
SEGMENT INFORMATION | ||||
Total revenues | $ (30,480) | $ (133,680) | $ (82,000) | $ (283,216) |
SEGMENT INFORMATION -Reconcilia
SEGMENT INFORMATION -Reconciliation of segment loss from operation to corporate loss (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Reconciliation of segment loss from operations to corporate loss | ||||
Loss from operations of reportable segments | $ (2,704,024) | $ (2,154,236) | $ (3,923,002) | $ (6,860,813) |
General corporate expenses | (3,522,715) | (3,572,680) | (6,148,072) | (8,308,299) |
Interest income | 3,639 | 5,540 | 7,325 | 5,813 |
Unrealized gain on change in fair value of warrants classified as a liability | 3,250,900 | 782,500 | 613,100 | 782,500 |
Transaction cost allocated to warrant liabilities | 0 | (391,335) | (391,335) | |
Other income (expense), net | 661 | (2,266) | 9,507 | (16,873) |
Income (loss) before provision for income taxes | 551,176 | (1,759,797) | (3,293,070) | (6,480,708) |
Operating segment | ||||
Reconciliation of segment loss from operations to corporate loss | ||||
Loss from operations of reportable segments | (1,476,571) | (1,257,451) | (1,693,655) | (3,413,616) |
Segment reconciling items | ||||
Reconciliation of segment loss from operations to corporate loss | ||||
General corporate expenses | $ (1,227,453) | $ (896,785) | $ (2,229,347) | $ (3,447,197) |
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 | Mar. 31, 2023 USD ($) |
Common Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Financial liabilities fair value disclosure | $ 1,429,000 |
Common Warrants | Weighted Average | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Warrants and rights outstanding, measurement input | 160 |
Series A Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Financial liabilities fair value disclosure | $ 2,768,000 |
Series A Warrants | Weighted Average | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Warrants and rights outstanding, measurement input | 160 |
Series B Warrants | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Financial liabilities fair value disclosure | $ 329,300 |
Series B Warrants | Weighted Average | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Warrants and rights outstanding, measurement input | 175 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Change in fair value of warrants (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 | Mar. 31, 2023 | |
Common Warrants | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Fair value at beginning of period | $ 2,187,000 | $ 1,477,000 |
Change in fair value | (758,000) | (48,000) |
Fair Value at ending of period | 1,429,000 | 1,429,000 |
Series A Warrants | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Fair value at beginning of period | 4,269,000 | 2,883,000 |
Change in fair value | (1,501,000) | (115,000) |
Fair Value at ending of period | 2,768,000 | 2,768,000 |
Series B Warrants | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Fair value at beginning of period | 1,321,200 | 779,400 |
Change in fair value | (991,900) | (450,100) |
Fair Value at ending of period | $ 329,300 | $ 329,300 |