Nasdaq: APDN. Jim Hayward, Ph.D., Sc.D., CEO Gateway Conference, September, 2016

Transcription

1 Nasdaq: APDN Jim Hayward, Ph.D., Sc.D., CEO Gateway Conference, September, 2016

2 Forward-Looking Statements The statements made by Applied DNA Sciences, Inc. (the Company, or us ) herein regarding the Company and its business may be forward-looking in nature and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of Forward-looking statements describe the Company s future plans, projections, strategies and expectations, including statements regarding future results of operations and financial position, business strategy, prospective products, timing and likelihood of success, and objectives of management for future operations, and are based on certain assumptions and involve a number of risks and uncertainties, many of which are beyond the control of the Company, including, but not limited to, the risks detailed in the Company s Registration Statement on Form S-3 (including Prospectus Supplements and any documents incorporated by reference therein, including the Company s Annual Report on Form 10-K for the year ended September 30, 2015), and other reports filed by the Company with the Securities and Exchange Commission. Forwardlooking statements include all statements which are not historical facts, and can generally be identified by terms such as anticipates, believes, could, estimates, intends, may, plans, projects, should, will, would, or the negative of those terms and similar expressions. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and may be beyond the Company s control, you should not rely on these statements as predictions of future events. Actual results could differ materially from those projected due to our short operating history, history of losses, lack of market acceptance of our products and services, market competition, changes in the local and national economies, and various other factors. All forward-looking statements contained herein speak only as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements, whether

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5 Focusing on the mission. Delivering the best outcome. DNA makes it possible. Helping the Defense Logistics Agency secure its electronic microcircuit supply chain. Over 700 thousand components marked.

6 Just completed: 2 federal development contracts. OSD - extends DNA marking to 66 additional Federal Supply Classes (>140 mm items purchased/yr) MDA - high-volume marking of semiconductors (FSC 5961 and FSC 3110 FSC 5330 FSC 5961 FSC 2530 FSC 2915 FSG 47

7 Cash and valuables safely transported. DNA makes it possible. The use of DNA-marked degradation dye, and now DNA-cyanoacrylate in the UK has resulted in a 75% reduction in cash transport attacks. 105 Convictions

8 Pushing it to the limit. Braking hard and late. DNA makes it possible. Ensuring the use of authentic critical components in vehicles, commercial aircraft and machinery.

9 That new prescription is having a positive impact on your life. DNA makes it possible. Preserving patient safety and benefit by ensuring drug authenticity and active ingredient integrity.

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11 Target dumps supplier it says delivered fake Egyptian-cotton sheets August 19, 2016 Cotton Egypt Association estimates that 90% of products labeled Egyptian cotton are fake

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13 The joy of sleeping in cool cotton comfort. DNA makes it possible. Restoring integrity to the worldwide cotton textile supply chain. Ensuring quality, comfort and compliance. 100 million pounds of cotton marked.

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15 The Data Speak for Themselves Before SigNature T DNA Marking Pima compliance less than 30% After SigNature T DNA Marking Pima compliance about 100%

16 First launched in 2015, HomeGrown Cotton Proudly Grown in the USA uses the Applied DNA botanical SigNature T DNA to tag and test the long staple cotton fibers known as Upland cotton. Upland cotton is the most widely planted species of cotton in the United States, accounting for at least Applied DNA Sciences Expands US Cotton Tagging Business With Launch of New HomeGrown Lonestar Program and Order to Mark 50 Million Pounds of Cotton SigNature T DNA-tagging of Plains Varietal Upland cotton fibers to assure Cotton Proudly Grown in the USA label claim for textile quality and purity throughout supply chain STONY BROOK, N.Y.(September 7, 2016) Applied DNA Sciences (Applied DNA), Inc. (NASDAQ: APDN), a provider of DNA-based supply chain, anti-counterfeiting, authentication,genotyping and antitheft technologies, expanded its US cotton tagging business by 50 million pounds as part of its newly launched HomeGrown Lonestar program within the 2016 US cotton harvest. The cotton varietal tagged as Lonestar comes from the famous cotton territories of West Texas. Applied DNA received an order for SigNature T DNA adequate to mark 50 million pounds of Lonestar cotton that is expected to ship before the end of September.

17 Increasing Demand for DNA-tagged Cotton Volume and Variety 120 Lbs (milions) of DNA-tagged Cotton (to be) produced Lone star Acala Delta Delta Pima Pima Pima Outlook as of 7 Sept

18 Feeling confident that your new ensemble was ethically sourced. DNA makes it possible. Using DNA markers to verify manufacturing locations, material sources and product provenance.

19 August 4, 2016 Tweet from ILRF At the US Chamber of Commerce

20 Cotton Certainty. Peace of Mind. Determine if fiber is Pima, upland, or a blend with a patented diagnostic assay. Tag cotton at the source with botanical-based molecular DNA to trace origin. Forensically identify the geographic origin of cotton. Assay currently in development.

21 Never considering your shoes during a marathon. DNA makes it possible. Using speciallyengineered markers to protect the integrity of the synthetic fiber textile supply chain.

22 digitaldna platform to support our Customers Business advantage: Transaction and information hub for textiles supply chains, compliance agencies, and consumers.

23 Technology Platform Architecture DNA authentication Spectral profile/ image validation Bar code data entry - overt and covert RFID data entry Documents/ Images storage

24 DNA Registry Extends to Supply Chain Traceability Supply Chain ADNAS produced and shipped DNA SAS produced and shipped gaskets ActionPak receive, IUID bag & tag, ship DLA receive, validate and authenticate Supply Chain reporting

25 digitaldna payoff for the Consumer PimaCott proof positive

26 $ I nthousands Financial Highlights Annual Revenue $9,088 $2,721 $1,855 $2,036 $350 $520 $969 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY % 225% 150% 75% 0% Year over year revenue growth FY2013 FY2014 FY Quarterly Adjusted EBITDA Q1' FY15 Q2' FY15 Q3' FY15 Q4'FY15 Q1'FY16 Q2'FY16 Q3'FY16

27 Comparative Consolidated Statement of Operations Three Month Period Ended Nine Month Period Ended June 30, Variance June 30, Variance $ % $ % Revenues $652,896 $2,267,671 $(1,614,7 75) -71% $$2,550,332 $5,028,234 $(2,477,902) -49 Cost of revenues 121, ,016 (7,756) -6% 304, , , % Operating Expenses Selling, general & administrative 2,707,420 3,222,691 (515,271) -16% 8,616,246 10,323,809 (1,707,563) -17% Research & Development 1,077, , , % 2,861,583 1,587,326 1,274,257 80% Depreciation & amortization 168, ,339 47,302 39% 557, , ,824 58% Total operating expenses 3,953,977 3,810, ,106 4% 12,035,797 12,265,279 (229,482) -2% LOSS FROM OPERATIONS (3,422,341) (1,672,216) 1,750, % (9,790,076) (7,366,060) 2,424,016 33% Other income (expense) 55,330 1,334 (53,996) 4,048% 29,173 (4,019,042) (4,048,215) -101% NET LOSS $(3,367,011) $(1,670,882) 1,696, % $(9,760,903) $(11,385,102) (1,624,199) -14%

28 Use of Non-GAAP Financial Measures This presentation includes Adjusted EBITDA, which is a non-gaap financial measure as defined under Regulation G promulgated by the Securities and Exchange Commission. Generally, a non-gaap financial measure is a numerical measure of a company s historical or future performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The presentation of this non-gaap financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared in presented in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool. Among other things, Adjusted EBITDA does not include all items of income and expense that affect the Company s operations. Other companies may calculate similarly titled financial measures differently than does the Company. We use this non-gaap financial measure for internal financial and operational decision making purposes and as a means to evaluate period-to-period comparisons of the performance and results of operations of our core business. Our management believes that these non-gaap financial measures provide meaningful supplemental information regarding the performance of our business by excluding non-cash expenses that may not be indicative of our recurring operating results. We believe this non-gaap financial measure is useful to investors as they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Adjusted EBITDA is defined as EBITDA adjusted to exclude (i) change in fair value of warrant liability, (ii) the loss on conversion of promissory notes, (iii) stock-based compensation and (iv) other non-cash expenses. EBITDA is defined as earnings (loss) before interest expense, income tax expense and depreciation and amortization expense.

29 Calculation and Reconciliation of Consolidated Adjusted EBITDA Three Month Period Ended June 30, Three Month Period Ended March 31, Nine Month Period Ended June 30, % 2015 % % Net loss $(3,367,011) $(1,670,882) $(3,467,623) $(9,760,903) $(11,385,102) Interest expense (income), net (2,660) (5,052) (4,062) (9,567) 26,807 Depreciation & amortization 168, , , , ,144 (Gain) loss on change in fair value of warrant liability ,994,540 Stock based compensation expense 525,186 1,057, ,668 1,522,304 3,595,631 Loss on conversion of promissory notes ,842 Bad debt expense 83,934 18,971 10, ,247 21,750 Total non-cash items 775,101 1,192, ,587 2,176,952 7,973,714 Consolidated Adjusted EBITDA (loss) $(2,591,910) $(478,527) 442% $(2,791,036) -7% $(7,583,951) $(3,411,388) 122%

30 Clean Balance Sheet ($ in millions) As of June 30, 2016 Cash & Equivalents $7.1 PP&E $0.805 Other Current and Non-Current Assets Accounts Payable and accrued expenses Other Current and Non-Current Liabilities $6.3 $2.2 $0.849 Stockholders Equity $12.2