Applied DNA Sciences, Inc. (OTC:APDN) Climb Interrupted

After a reversal at around $0.13, Applied DNA Sciences, Inc. (OTC:APDN) started another climb in mid-March. It was clear skies from there on but the extended run came to an abrupt halt yesterday, with APDN closing almost 15% down in yesterday’s session.

The drop happened in the afternoon, after the stock spent the morning in the green and relatively even, so it may have blindsided more than a few traders. APDN has climbed and dropped before but this time the move up happened more gradually and over an extended period of time.

The company’s DNA recognition technology aiming to prevent counterfeiting and enhance authentication procedures provided APDN with respectable quarterly revenues but the overall picture painted by the latest 10-Q is not a very optimistic one. Here is the brief rundown of the report’s numbers:

• $984 thousand in cash
• $808 thousand in current liabilities
• $317 thousand in revenues for Sep-Dec 2012
• $8.7 million in net loss for Sep-Dec 2012
• $177 million accumulated deficit

The fact that the company has almost a million in cash is always a good thing, as the money can potentially be put to revenue-generating use. The problem is, even if we disregard the $6 million expense written off as “change in fair value of warrant liability”, the company’s operating expenses still trumped revenue eight times.

To APDN‘s credit, the company has not been the target of a promotional campaign for almost two full years. Despite this fact the last two times APDN surged, it dropped quickly, in a manner similar to the movement of most pumps. The series of double-digit drops in mid-February trailed the release of the 10-Q in question, indicating traders expectations were not buoyed by the contents of the filing. APDN‘s management will have to think of a way to turn the company’s available resources into revenue streams, while also reining in expenses, so as to be able to steer the company into profit.