The Sequester should not affect APDN directly for 2 reasons. The DLA mandate built into the Pentagon budget is itself not budget item. It basically says Pentagon solve your counterfeit problem by requiring your suppliers give you non-counterfeit goods & arresting and punishing those who do not. In theory all of the costs, accounting and enforcement has been pushed onto industry and does not Federal budget line item. In practice the DLA is footing the entire bill, by absorbing all of the implementation costs by allowing the suppliers to pass through the costs and/or applying for direct reimbursements. In other words, the chips get more expensive. The DLA accountants may see their Spare Parts cost go up, but their will never be a line item in any budget that Congress can eliminate. Because the mandate IS NOT a budget item, it cannot be cut or defunded directly using the budget process. Congress will need to repeal or modify the mandate itself. This won't happen. The mandate itself is really well written, anticipates problems, has ways to internally correct and makes it look like it costs nothing to implement. Good luck repealing that Gorgeous Beast.
Interest rates may affect APDN directly if it plans to (re)finance in the near future. It may also affect them if they ever decide to directly finance new customers. Otherwise the answer is no.
Paraphrasing the sage of Omaha, the stock market in the short run is a popularity contest, but in the long run a weighing machine. In the short run, you might see the P/S drop when new-timers freak out. The stock though doesn't correlate well with the S&P, because the stock itself is off limits to many wall street trading houses and its income stream does not come from the consumer market, but from industry and government, which resists change (and thus fluctuations) in all forms. Resistance is bad, when APDN is trying to get in the door, but great now that they're locked in.
Earnings will be the biggest P/S driver in the long run. Congress has already approved the Pentagon budget for 2014. Short of an new act of Congress, the DLA will expand use to their supply base. APDN uses a subscription model to get the customer into the system at a cost of $50K/year per code. Once in, the customer may spend more money to buy services or accessories. As long as they can build out into the supply chains they can grow.
Being feautured by the Wall Street Journal in the investment section as the new solution for counterfeiting IS HUGE. That exposure outweighs any blog, newsletter or pump. The WSJ made APDN legit to a lot of $$$. The next 2 milestones to look for will be (1) earnings and (2) a stock price above $1. APDN runs a subscription model & building an ecosystem for their products. Success means being able to add more users at in different supply chains at different levels. They are successfully doing both, because the DLA has agreed to pay for all of the security upgrages. The DLA deal is an offer no one can refuse. Do it or else get fired. By the way, we'll pay for everthing. With earnings, comes rises in P/S. As a $1 stock, APDN can get off the OTC and trade on the big boards, and bring in institutional investors forbidden to dabble in penny land.
Today is a great day, but slow and steady builds the quality control systems in the supply chain.
Calling all stock mavens.
Does anyone know what the minimum requirements for stocks before we start getting analyst covering APDN? Are there industry standards or is it simply the case that the stock gets covered when someone want to cover it?
Here's my list of fantasy headlines: :
1. All 33 signatory countries have ratified the Anti-Counterfeiting Trade Agreement (ACTA). This multi-national trade agreement This basically makes it illegal to counterfeit or pirate, and requires the signiture countries to help with the law enforcement, spreading US style intellectual property laws & enforcement to the rest of the world. Countries that break the rules get sent to the WTO. As of now, There are 33 countries who have signed and one (Japan) who has ratified. This should create international demand and ONE a standard body of law.
2. FDA approves APDN product is "safe for human consumption".
3. High Profile Jewel Heists forces museums, hotels and art houses to improve their security. Insurers offer financial incentives to drive the change. An insurance spokeswoman said, "We would rather pay for the $50K to secure the jewels than the $150M to replace them." She went to on say, "The Art Registry system & the DNA tagging will make it impossible to fence stolen goods, without alerting authorities...."
4. APDN "encapsulation" technology used to improved the delivery of drug cocktails. A person who is on the drug cocktail to treat AIDS, has to follow a very complicated and rigid regime. The treatment does not work if they do not follow the regimen EXACTLY. Encapsulation allows all parts of the cocktail to be taken at the same time, and released at the appropriate time...."
5. DNA tagging technology used to turn Bacteria into Nanomachines. "Our DNA Encapusulant acts like a virus, that penetrates then "infects" the bacteria with the desired DNA. That part is easy. The hard part is figuring out what we want the Coliform to do." When asked about the negative effects, the scientist said, "Of course, we don't want to destroy the world. That's why we programed not one, one, but five genetic "fail-safes" that prevent the Coliform from reproducing. Frankenstein is a mule you see...."
Correction - nothing fruitful has been announce.
There's always a lag between conferences and revenues. A potential customer will need to have time to implement the technology. In the chip industry, implementing APDN at an OEM may take about 1 year. Implementation entails: "developing a process", "qualifying that process", "scaling up", & "informing their own customers" of the changes if they affect form, fit or function. I can only imagine what the full qualification loop looks like for other industries: textiles, automotive, aerospace, etc.... This means it takes a long time to implement. Once it is in though, it will be very hard to dislodge.
Except of L3, the chip companies that have announce they are APDN ready are not OEMS (chip makers). They are instead distributors. They buy chips from other people, then label themselves. I am waiting for the OEMS, themselves in future announcements. Large OEM's may want to buy more than one license ($50K/yr). Intel for example can afford to track individual plants.
Is anyone on the message board familiar with the qualification cycle for textiles at the factory and industry level?
This is a false dilemma. What would be a "great" earnings report to you?
They can stay in business because they are the Pentagon's chosen contractor to implement a law. It will take (1) an act of congress & presidential approval to change or eliminate the mandate, (2) millions of dollars and several years to prove that your technology works, and (3) the DLA is footing the bill for converting their supply chain to the APDN standard.
I've will be a long term shareholder in this company as long as these 3 facts are still true.
BTW - the real tech breakthrough is not the DNA coding - its the chemical-lock and key capsules APDN developed to store the DNA.
I think folks are bailing because they just read the financials APDN released several days ago. Everyone take a deep breath. The report ends on 6/30/13, right after they spent a bunch of money to expand. Going forward, the revenues should grow along with the mandate. The big question isn't if they survive, but when they will make a profit. Folks dumping today are dumping because they see the price/share drop - not because they are thinking about the long term prospects.