Parker –
A review of my Inbox shows that I received no email from you subsequent to my response to you dated October 12, 2017 that you provide below.
With regard to your cotton question, I cannot update you on the amount of cotton APDN has marked as that would provide you with non-public information of a potentially material nature and on a selective basis. That being said, the graph shown at the December 6 Imperial Capital Security conference (shown below) is still valid. Cotton revenues remain back-end loaded and are generated by previously awarded recurring orders from Himatsingka. Management has noted on multiple occasions over the past several quarters that approximately $4.4M of the $6.5M in recurring revenues in FY18 will be derived from cotton via Himatsingka. The second graphic below – taken from the company’s FQ4’17 earnings presentation on December 28, 2017 – correlates to the 350M lbs and $4.4M figures in FY18.
Given the above, I would be interested in knowing why you perceive that a “significant event” has occurred in cotton between December 28, 2017 and today and how you arrived at a decline of 5-10% in cotton revenues.
With regard to the DMF, the delay stems from input required from Colorcon. As Applied DNA’s CEO stated on the FQ1’18 earnings call on February 8, 2018, Colorcon’s review is necessary as the DMF is a reference document that links to their products, hence their review is requisite. Their review, admittedly, has taken longer than expected. Given that Colorcon has concurrently signed definitive agreements to utilize Applied DNA’s molecular taggant technology, the delay in filing the DMF is not reflective of Colorcon’s interest in deploying Applied DNA’s molecular tagging technology. To be clear, Colorcon does not file the DMF; Applied DNA will file the DMF.
