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Applied DNA Sciences Inc (NASDAQ:APDN) Climbing Up The Charts

Applied DNA Sciences Inc (NASDAQ:APDN) Climbing Up The Charts
Written by
Jarrod Wesson
Published on
July 12, 2017
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Today, we bring to our readers a unique company delivering very particular solutions to address brand protection; Applied DNA Sciences Inc (NASDAQ:APDN). Other investment analysts, such as Grant Zeng, CFA from Seeking Alpha, who wrote "Applied DNA Sciences: An Unique Biotech Company Targeting The Anti-Counterfeiting Market", or Renee Jackson from cerbatgem.com, assessed the stock. After reading their analyses, we became interested in the stock, and decided to take a look at it as well. Take a look at the recent share price action and note the recent volume. In this piece, we will try to explain you what happened.SourceApplied DNA SciencesSourceThe company uses DNA authentication to mark products. APDN's technology is featured in the following way on the company website:

"With secure taggants, high-resolution DNA authentication, and comprehensive reporting, our plant-based DNA technologies are designed to deliver what we believe to be the greatest levels of security, deterrence and legal recourse strength. We are also engaged in the large-scale production of specific DNA sequences using the polymerase chain reaction (“PCR”)." Source

The number of applications is huge. The following are a few of them, but there are many more on the company's website.

  • Fine Wine: SigNature® DNA-embedded labels are used to protect premium wines (We will show a video about it).
  • Wool: SigNature T helps assure the authenticity of loose wool fiber.
  • Vehicle parts: DNAnet is being used to protect auto parts in Sweden.
  • Supply chain security: Supply chains are vulnerable to raw material manipulation, diversion, and counterfeiting. DNA tagging can remedy these issues.

This is the best video that we could find, wherein the ABC channel shows the new technology:https://youtu.be/gLYvxrQGqVUSourceRecent Announcements - Market ReactionThe company releases large amount of news, which we appreciate. Some of them moved the share price. On June 23, 2017, it was put out that APDN had received an order to tag "27.5 million pounds of cotton". In the press release, it was stated that 27.5 million pounds of cotton would be shipped before the end of June. Dr. James A. Hayward, President and CEO of Applied DNA, explained in the following words:

Now in our third season, Applied DNA’s SigNature T DNA has been meeting the need for supply chain traceability, transparency and trust within the cotton industry ecosystem with national retailers, their supply chain partners, and consumers. We are proud to continue to tag, test and track cotton for the 2017/2018 ginning season.Source

As the new order of 27.5 million pounds of cotton will increase the revenue line of APDN, the market pushed up the share price immediately. Have a look at the volume and increase in the share price the following day.SourceIn addition, on June 27, other news was put out, which made the share price jump even higher. Applied DNA Sciences declared that they had completed their preliminary work under a financed contract with Lily of the Desert. The pilot examinations of that understanding were expected to show the achievability of sub-atomic labelling to make the industry's first traceable and validated Aloe vera juices; from raw material to the manufacture of wholesome drinks, and topical customer items.Applied DNA Sciences also announced the marking of another licensing agreement with Himatsingka America Inc., which is a part of the Himatsingka Group on June 27. Dr. James A. Hayward explained in the following words:

This new agreement represents a strengthened partnership between Applied DNA and Himatsingka, as both companies are committed to meeting the need for supply chain traceability, transparency and trust within the cotton industry. Source

Shrikant Himatsingka, CEO of Himatsingka Group, likewise said that they were foreseeing on taking the Applied DNA technology stage universally and continuing to bring those cutting-edge track and trace capacities to benefit partners from across the cotton value chain.On June 28, Applied DNA Sciences reported that it had gone into a stock trading agreement with a number of investors, which included an important client of the company and several of its Executive Officers, plus members from the Board of Directors. This private placement is expected to close by July 28, 2017. DNA Sciences will issue and offer 1,025,574 shares at a price of $1.76 per share. We appreciate that the news did not make the stock decline, as it usually happens when companies issue new shares. Dr. James A. Hayward, President and CEO of Applied DNA, expressed as follows:

I am extremely pleased with the investment and support received from our management team, the Board and a key customer in joining me in strengthening the Company’s balance sheet to give us additional resources with which to execute on our growth strategy. This investment was done without any discount or preference, without warrants or banking fees, offering the best value for the Company and for existing investors.” Source

On 5th July, Applied DNA announced the addition of two new partners to the company’s project with BLC Leather Technology Centre (BLC). The project is intended to develop and approve a Signature® T-based framework to provide comprehensive and verifiable leather traceability, from farm to completed items.These two new corporate backers include:- Scottish Leather Group Ltd: it is said to be the largest manufacturer of leather in the United Kingdom.- Tong Hong Tannery: it is the largest manufacturer of split leather in the world.Tony Benson, EMEA Managing Director for Applied DNA, said:

“The addition of these new sponsors reflects the leather industry’s growing interest in a 100% secure supply chain for its products and an ongoing commitment to taking positive action to deal with environmental sustainability, animal welfare and supply chain risk management that are key issues for industrial participants and their customers.” Source

Finally, on July 11, 2017, it put out a license agreement with GHCL Limited; a home textiles manufacturer. Under the agreement, APDN will provide "CertainT™ platform services in connection with source-verified, polyethylene terephthalate (PET) and recycled PET (post consumer) in select home textile products". Additionally, GHCL also acquired "Applied DNA’s CertainT trademark for use on its products, as well as for promotional, marketing and sales materials". Finally, the most interesting fact is that under the agreement, GHCL will provide guaranteed minimum annual revenues, and royalties, which means that the contract will make the revenue line increase. Consequently, the share price was pushed up by the market.ConclusionIn our article, we checked the most recent developments of APDN and found out that it is doing great work. The new order to tag 27.5 million pounds of cotton, the good news about the contract with the Lily of the Desert and the licensing agreement with Himatsingka America Inc. were celebrated by the market. Furthermore, the new license agreement with GHCL Limited, which will surely bring revenues to the company, was a good reason to push up the share price. To sum up, follow the stock closely, as it is delivering good returns to the market. This is one name to keep on your radar.We will updating out subscribers as soon as we know more. For the latest updates on APDN, sign up below!Image courtesy of R F via FlickrDisclosure: We have no position in APDN and have not been compensated for this article.

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