Applied DNA Sciences Inc . (NASDAQ:APDN), a testing laboratories services provider, has received a notification from The Nasdaq Stock Market LLC indicating non-compliance with the exchange's minimum bid price requirement. The notice, dated July 12, 2024, stated that the company's shares failed to maintain the minimum $1.00 bid price over the previous 30 consecutive business days.
The current status does not affect Applied DNA's listing on The Nasdaq Capital Market. The company has been provided 180 calendar days, until January 8, 2025, to regain compliance. To achieve this, the company's common stock must close at a minimum bid price of $1.00 or more for at least ten consecutive business days.
Should Applied DNA not meet the requirement by the specified date, it may be granted an additional 180-day period if it meets all other initial listing standards, except for the bid price. In such a scenario, the company would need to notify Nasdaq of its intent to remedy the deficiency, potentially through a reverse stock split.
The company has indicated that it plans to implement a reverse stock split to comply with Nasdaq's listing rules and fulfill its obligations under the terms of Series A and B common stock purchase warrants issued in a public offering on May 29, 2024. This action is in line with a warrant provision that mandates a reverse stock split in response to a notice from Nasdaq regarding the minimum bid price requirement.
Applied DNA must regain compliance by January 8, 2025, or if an extension is granted, by July 7, 2025, to avoid delisting. If Nasdaq decides to delist the company's securities, Applied DNA has the right to appeal the decision. However, there are no guarantees that the company's appeal for continued listing would be successful.
In other recent news, Applied DNA Sciences and Alphazyme LLC announced a significant reduction in manufacturing costs for a key component in mRNA production. The successful scale-up of their Linea RNAP enzyme has led to a cost reduction exceeding 70%, which is expected to improve the profitability of Applied DNA's Linea IVT platform. The company has also received approval from the New York State Department of Health for its pharmacogenomic testing service, TR8. Furthermore, Applied DNA Sciences secured a patent for its Linea RNAP enzyme composition from the U.S. Patent and Trademark Office, extending the patent's life until 2041.
Despite these positive developments, H.C. Wainwright lowered its price target for Applied DNA Sciences shares to $1.50 from the previous $7.00, but continues to endorse the stock with a Buy rating. The company also confirmed a 1-for-20 reverse stock split of its common stock, aimed at ensuring compliance with the Nasdaq's minimum bid price requirement.
In addition, Applied DNA Sciences disclosed a public offering expected to generate approximately $12 million in gross proceeds, which will be used to expand its Therapeutic DNA Production Services and MDx Testing Services. These are recent developments in the company's operations.
InvestingPro Insights
As Applied DNA Sciences Inc. (NASDAQ:APDN) navigates through its compliance challenges with Nasdaq's minimum bid price requirement, a look at real-time data and InvestingPro Tips can provide investors with a deeper understanding of the company's financial position. Applied DNA holds more cash than debt, which is a positive indicator of the company's liquidity. However, analysts are forecasting a sales decline in the current year, which could impact the company's ability to maintain its market cap, currently at a modest $4.41 million USD.
The company's revenue for the last twelve months as of Q2 2024 stands at $5.52 million USD, but it has experienced a significant decrease in revenue growth of -68.52% during the same period. The gross profit margin remains at 33.98%, underscoring some efficiency in the cost of goods sold relative to sales. With a price of the previous close at $0.43 USD, the stock is trading well below the Nasdaq minimum bid price requirement.
InvestingPro Tips suggest that Applied DNA is trading at a low revenue valuation multiple and is quickly burning through cash, which could be a concern for investors considering the longevity of the company's financial resources. Additionally, with the stock's price having fallen significantly over the last year and analysts not anticipating profitability this year, investors may exercise caution. For those interested in a comprehensive analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/APDN. Moreover, using coupon code PRONEWS24 can provide up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering valuable insights for informed decision-making.
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