Applied DNA Enters into Multi-Year Commercialization Agreement with Indus Group for Large-Scale Implementation of CertainT Cotton Traceability

Rhea-AI Summary

Applied DNA Sciences (NASDAQ:APDN) has signed a five-year license and commercialization agreement with Indus Group for its CertainT traceability platform. The agreement covers non-home, cotton-based products from Indus facilities in Pakistan, Egypt, and Jordan. Indus, which consumes about 450 million pounds of cotton annually, will have exclusive use of the platform in these countries and non-exclusive use elsewhere.

The CertainT platform uses forensic, multiple-proof-point evidence for source and authenticity verification of materials throughout global supply chains. This marks CertainT's first large-scale deployment catalyzed by the Uyghur Forced Labor Prevention Act (UFLPA). The agreement is expected to reduce revenue lumpiness in Applied DNA's segment by enabling year-round cotton tagging at Indus's spinners.

Positive

• Five-year license and commercialization agreement signed with Indus Group
• Potential for steadier revenue stream through year-round cotton tagging
• First large-scale deployment of CertainT platform driven by UFLPA implementation
• Exclusive use of CertainT platform granted to Indus in Pakistan, Egypt, and Jordan
• Partnership with a company consuming approximately 450 million pounds of cotton annually

Negative

• Financial terms of the agreement were not disclosed

Insights

Financial Analyst

The multi-year commercialization agreement between Applied DNA Sciences and Indus Group marks a significant development in the textile traceability sector. This partnership has several key implications:

• Applied DNA gains access to Indus Group's massive cotton consumption of 450 million pounds annually, potentially leading to a substantial increase in tagging volumes.
• The shift from seasonal cotton harvest tagging to year-round tagging at spinners could result in more consistent revenue streams for Applied DNA, addressing the historical 'lumpiness' in segment revenues.
• The agreement's five-year duration provides Applied DNA with a stable, long-term revenue source, enhancing financial predictability.
• While financial terms weren't disclosed, the scale of Indus Group's operations suggests this could be a material contract for Applied DNA.

From an investor's perspective, this agreement could significantly boost Applied DNA's top-line growth and improve its financial stability. However, the lack of disclosed financial terms makes it challenging to quantify the exact impact on the company's financials. Investors should monitor future earnings reports for concrete evidence of revenue growth and margin improvements resulting from this partnership.

Supply Chain Expert

This agreement represents a pivotal shift in cotton supply chain management, particularly in light of the Uyghur Forced Labor Prevention Act (UFLPA). Key points to consider:

• The CertainT platform's implementation across Indus Group's facilities in Pakistan, Egypt and Jordan demonstrates a growing demand for verifiable, ethical sourcing in the textile industry.
• This large-scale deployment, catalyzed by UFLPA, could set a new industry standard for cotton traceability, potentially leading to wider adoption across the sector.
• The ability to trace cotton from yarn to finished goods addresses a critical gap in supply chain transparency, offering a competitive advantage to both Applied DNA and Indus Group.
• The exclusive rights granted to Indus in certain countries could position them as a preferred supplier for brands seeking UFLPA compliance.

For investors, this development signals a potential shift in industry practices, with traceability becoming a key differentiator. As more regulations like UFLPA come into play globally, companies offering robust traceability solutions could see increased demand, potentially leading to significant market growth in this sector.

Textile Industry Analyst

The partnership between Applied DNA and Indus Group represents a significant advancement in textile traceability technology adoption. Several aspects of this agreement are noteworthy:

• Indus Group's annual cotton consumption of 450 million pounds provides a massive scale for CertainT platform implementation, potentially setting a new industry benchmark.
• The agreement covers non-home, cotton-based products including apparel, footwear and accessories, indicating a broad application across various product categories.
• The planned implementation at multiple cotton spinning mills in Year 1, with subsequent broader deployment, suggests a phased approach that could allow for optimization and scalability.
• The partnership addresses the growing demand for supply chain transparency among global brands and retailers, particularly those served by Indus in North America, the EU, Australia and New Zealand.

For investors, this agreement signals a potential shift in the textile industry towards advanced traceability solutions. As major players like Indus Group adopt these technologies, it could create a ripple effect, driving demand for similar solutions across the industry. This trend could benefit companies like Applied DNA that are at the forefront of such technologies, potentially leading to increased market share and revenue growth in the medium to long term.

- Indus Group Consumes Approximately 450 Million Pounds of Cotton Annually for the Manufacture of Apparel, Footwear, and Accessories for Global Brands and Retailers -

STONY BROOK, NY / ACCESSWIRE / July 25, 2024 / Applied DNA Sciences, Inc. (NASDAQ:APDN) ("Applied DNA" or the "Company"), a leader in PCR-based DNA technologies, today announced the signing of a five-year license and commercialization agreement for its CertainT^® traceability platform (the "Agreement") with Indus Group ("Indus") a multinational apparel/textile manufacturing and sourcing company with a reputation for cutting-edge fabric technology and product innovation. Indus consumes approximately 450 million pounds of cotton annually. Financial terms of the Agreement were not disclosed.

CertainT is a textiles traceability platform that uses forensic, multiple-proof-point evidence to enable source and authenticity verification of materials and products at any point as they are transformed through global supply chains.

Under the terms of the Agreement, Applied DNA will supply Indus with its CertainT platform for non-home, cotton-based products (apparel, footwear, and accessories) originating from Indus facilities in Pakistan, Egypt, and Jordan, utilizing cotton from multiple global sources. Indus will have exclusive use of the platform in these countries and non-exclusive use elsewhere. The platform encompasses spray systems, DNA taggant, taggant and genotyping testing services, devices and materials for on-site testing, and isotopic testing services. No rights to the CertainT platform with respect to home textiles were granted under the Agreement.

The Company's cotton tagging revenues have historically been tied to annual cotton harvests; tagging will now occur at Indus's spinners, which operate year-round. The parties intend to implement the CertainT platform at multiple cotton spinning mills in Year 1 of the Agreement with a planned subsequent broader deployment based on forecasts from Indus for tagged cotton.

Dr. James A. Hayward, president and CEO of Applied DNA, stated, "We believe this Agreement is key to reducing the lumpiness in segment revenues to create a steadier revenue stream. For the first time, we have secured a partner that can tag cotton year-round with globally sourced cotton. Furthermore, this is CertainT's first large-scale deployment catalyzed by the implementation of the Uyghur Forced Labor Prevention Act (UFLPA). We expect the UFLPA to be an important tailwind for this segment, informing our sales approach to other apparel textile manufacturers. We look forward to a long and mutually beneficial relationship with Indus."

Indus is comprised of wholly owned and joint-venture production facilities in Pakistan, Egypt, and Jordan that serve brands in North America, the European Union, Australia, and New Zealand, including big box retailers and global leaders in sportswear and premium brands.

Indus CEO Abid Hafeez added, "Innovation and product development are at the heart of our corporate ethos and are fundamental to our ambitious growth goals. CertainT brings innovation to our organization with forensic cotton traceability and supply chain security, from yarn to finished goods, and compliance with the UFLPA for shipments bound to the U.S. Such a capability creates value, sustainability, and traceability for existing customers, giving us a significant competitive advantage in global fashion and apparel. We look forward to our new partnership with Applied DNA and expanding CertainT's footprint within our cotton supply chain in the coming years."

About Indus Group

Indus Group is a licensed CertainT® Cotton partner, specializing in apparel products for global brands. With a commitment to sustainability and transparency, Indus Group is dedicated to revolutionizing the apparel industry's supply chain through innovative solutions.

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 CertainT® platform, the unknown amount of revenues and profits that will result from the agreement with Indus Group, limited market acceptance for its CertainT Platform, the unknown future impact of the UFLPA on the demand for the CertainT platform, 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, as amended, filed on December 7, 2023, and Quarterly Report on Form 10-Q filed on February 8, 2024, May 10, 2024, 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.

Investor Relations contact: Sanjay M. Hurry, 917-733-5573, sanjay.hurry@adnas.com

Program and Media contact:
MeiLin Wan, 631-240-8849, meilin.wan@adnas.com
Web: www.adnas.com
CertainT®: www.CertainT.com
X: @APDN
LinkedIn: https://www.linkedin.com/company/certaint/

SOURCE: Applied DNA Sciences, Inc.

View the original press release on accesswire.com

FAQ

What is the duration of the agreement between Applied DNA Sciences and Indus Group for the CertainT platform?

The agreement between Applied DNA Sciences and Indus Group for the CertainT platform is for a duration of five years.

How much cotton does Indus Group consume annually?

Indus Group consumes approximately 450 million pounds of cotton annually for the manufacture of apparel, footwear, and accessories.

What products are covered under the CertainT traceability agreement with Indus Group?

The agreement covers non-home, cotton-based products including apparel, footwear, and accessories originating from Indus facilities in Pakistan, Egypt, and Jordan.

How is the CertainT platform expected to impact Applied DNA's (APDN) revenue?

The agreement is expected to reduce lumpiness in segment revenues and create a steadier revenue stream for Applied DNA through year-round cotton tagging at Indus's spinners.

What legislation has catalyzed the large-scale deployment of Applied DNA's (APDN) CertainT platform?

The implementation of the Uyghur Forced Labor Prevention Act (UFLPA) has catalyzed the first large-scale deployment of Applied DNA's CertainT platform.