Applied DNA Announces $3.44 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

Applied DNA Sciences, Inc. (APDN) has entered into securities purchase agreements with existing institutional investors for the issuance and sale of 5,644,061 shares of common stock at a purchase price of $0.609 per share in a registered direct offering. In a concurrent private placement, the company has also agreed to issue and sell unregistered warrants to purchase up to 11,288,122 shares of its common stock. The warrants have an exercise price of $0.609 per share and will become exercisable on the first trading day after receipt of shareholder approval. Additionally, the company will reduce the exercise price of 3,055,139 common stock warrants previously issued to the investors and extend warrant expiration dates into 2028, subject to approval by the company's stockholders at a stockholder meeting.

Financial Analyst

Applied DNA Sciences, Inc.'s recent securities purchase agreements represent a significant capital infusion for the company. The pricing at $0.609 per share, which is 'at-the-market' under Nasdaq rules, suggests that the offering was done without a discount to the current market price, which is often seen in direct offerings. This could indicate confidence among institutional investors regarding the company's value and future prospects.

The issuance of warrants in a concurrent private placement with an exercise price equal to the direct offering price is a strategic move. It may serve as an incentive for investors to hold onto their shares and potentially provide additional capital to Applied DNA in the future if the warrants are exercised. However, investors should be aware that the potential dilution from the exercise of warrants could impact share value in the long term.

Furthermore, the reduction of the exercise price and extension of expiration dates of existing warrants held by the current investors are also noteworthy. This adjustment is likely intended to keep these investors engaged and supportive, but it requires stockholder approval, which adds a level of uncertainty to the transaction.

Market Research Analyst

Applied DNA Sciences operates in the biotechnology sector with a focus on PCR-based DNA technologies, a field that has seen increased interest and growth, especially in the wake of global health challenges. The capital raised through this offering is likely earmarked for research and development, scaling up operations, or pursuing strategic initiatives.

Investors should consider the company's market position and the competitive landscape when evaluating the impact of this financial move. The ability to secure funding without significant discounts could reflect a positive market sentiment or a lack of available investment opportunities for institutional investors in this niche sector.

It's important to note that while the offering may provide necessary funds for the company to advance, the introduction of additional shares into the market could exert downward pressure on the stock price in the short term due to dilution effects.

Legal Expert

The legal framework surrounding the securities purchase agreements and the issuance of warrants in a private placement involves regulatory compliance with both Nasdaq rules and securities laws. The requirement for stockholder approval for certain terms of the warrants and the amendments to existing warrants emphasizes the governance aspects that protect shareholder interests.

Investors should recognize the importance of such approvals as a check on management's actions, ensuring that they align with shareholder value maximization. The legal process also provides a window during which market reactions and potential investor objections can be gauged, potentially influencing the stock's performance.

The fact that the warrants cannot be exercised until stockholder approval is obtained is a critical legal stipulation that underscores the conditional nature of this aspect of the financing deal.

STONY BROOK, NY / ACCESSWIRE / January 31, 2024 / Applied DNA Sciences, Inc. (NASDAQ:APDN) (Applied DNA), a leader in PCR-based DNA technologies, today announced that it has entered into securities purchase agreements (SPAs) with certain existing institutional investors (collectively the "Holders") for the issuance and sale of an aggregate of 5,644,061 of its shares of common stock (or prefunded warrants in lieu thereof) at a purchase price of $0.609 per share in a registered direct offering priced at-the-market under Nasdaq rules.

In a concurrent private placement, the Company has also agreed to issue and sell unregistered warrants to purchase up to an aggregate of 11,288,122 shares of its common stock. The warrants have an exercise price of $0.609 per share, will become exercisable on the first trading day after receipt of shareholder approval, and will expire on the five-year anniversary of the date of stockholder approval. The warrants cannot be exercised until their terms have been approved by the Company's stockholders at a stockholders meeting. Under the terms of the SPAs, the Company will also reduce the exercise price of 3,055,139 common stock warrants previously issued to and currently held by the Holders to $0.609 per warrant share and will extend warrant expiration dates into 2028. The reduction of the exercise price and extension of expiration of such outstanding common stock warrants is subject to approval by the Company's stockholders at a stockholder meeting.

The closing of the offering is expected to occur on or about February 2, 2024, subject to the satisfaction of customary closing conditions. Applied DNA intends to use the net proceeds from the offering for the further development of its therapeutic DNA production services, including the establishment of a fit-for-purpose manufacturing capacity for DNA critical starting materials for the manufacture of mRNA therapies, as well as general corporate purposes.

Maxim Group LLC is acting as the exclusive placement agent for the offering.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-272267) previously filed with the U.S. Securities and Exchange Commission (the "SEC") and deemed effective on June 6, 2023. The offering is made only by means of a prospectus supplement and accompanying prospectus, which will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Electronic copies of the prospectus supplement may be obtained, when available, from Maxim Group LLC, 300 Park Avenue, 16^th Floor, New York, NY 10022.

About Applied DNA Sciences

Applied DNA Sciences is a biotechnology company developing technologies to produce and detect deoxyribonucleic acid ("DNA"). Using the polymerase chain reaction ("PCR") to enable both the production and detection of DNA, we operate in three primary business markets: (i) the enzymatic manufacture of synthetic DNA for use in the production of nucleic acid-based therapeutics and, through our recent acquisition of Spindle Biotech, Inc. ("Spindle"), the development and sale of a proprietary RNA polymerase ("RNAP") for use in the production of mRNA therapeutics; (ii) the detection of DNA and RNA in molecular diagnostics and genetic testing services; and (iii) the manufacture and detection of DNA for industrial supply chain security services.

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Forward-Looking Statements

The statements made by Applied DNA in this press release may be "forward-looking" in nature within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe Applied DNA's future plans, projections, strategies, and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to its history of net losses, limited financial resources, unknown future demand for its biotherapeutics products and services, the inherent risk and unknown outcome of research and development projects, the unknown amount of revenues and profits that will result from the Linea DNA™ and/or Linea™ IVT platforms, the fact that there has never been a commercial drug product utilizing PCR-produced DNA technology and/or the Linea IVT or Linea DNA platforms approved for human therapeutic use, the risk that the offering described herein may not close, and various other factors detailed from time to time in Applied DNA's SEC reports and filings, including its Annual Report on Form 10-K filed on December 7, 2023, as amended, and other reports it files with the SEC, which are available at www.sec.gov. Applied DNA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless otherwise required by law.

Contacts:
Applied DNA Sciences
Investor Relations contact: Sanjay M. Hurry, 917-733-5573, sanjay.hurry@adnas.com
Web: www.adnas.com
Twitter: @APDN

SOURCE: Applied DNA Sciences, Inc.

View the original press release on accesswire.com

FAQ

What is the registered direct offering price for the 5,644,061 shares of common stock?

The purchase price for the 5,644,061 shares of common stock is $0.609 per share.

How many shares of common stock can be purchased through the unregistered warrants in the concurrent private placement?

Up to 11,288,122 shares of common stock can be purchased through the unregistered warrants.

When will the warrants become exercisable?

The warrants will become exercisable on the first trading day after receipt of shareholder approval.

What is the exercise price of the warrants?

The exercise price of the warrants is $0.609 per share.

What is the condition for the reduction of the exercise price and extension of expiration of outstanding common stock warrants?

The reduction and extension are subject to approval by the company's stockholders at a stockholder meeting.