in commercial ecosystems · securities and exchange commission.forward-looking statements include...
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DisruptingUncertainty
in Commercial EcosystemsJames A. Hayward, Ph.D., Sc.D.
President & CEO27 Sept 2017
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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 1995. 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 Annual Report on Form 10-K for the fiscal year ended September 30, 2016, and other reports filed by the Company with the Securities and Exchange Commission. Forward-looking 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 to reflect new information, events or circumstances after the date hereof or otherwise.
Forward-Looking Statement
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Applied DNA Sciences (ADNAS)• Corporate HQ in Stony Brook, NY• NASDAQ-listed as APDN• 30,000 ft2 for scientific laboratories, production, administration• 60+ staff in US, UK, India; Distributors in US, EMEA, Japan• 48 issued and 79 pending patent applications• Regulatory
– ISO 9001:2008 Certified/Registered (ANAB) – quality management– ISO/IEC 17025:2005 Accredited (A2LA) – forensic authentication (expert witness
qualifications)• Select Highlights
– USDA multi-year collaboration agreement on DNA barcoding of cotton– Approved by the US Government / Military: Federal contracts with 3 Department of
Defense agencies, 2 un-named agencies– Over 104,000 unique DNA codes deployed globally– Over 300 commercial customers to date– Over 114 million pounds of DNA-marked and DNA-barcoded cotton
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Securing the Supply Chain is Becoming Even More Critical to Business Success
Using Biotechnology, Applied DNA Sciences provides unique supply chain protection and crime prevention solutions that help keep life real and safe.
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SECURING THEGLOBAL SUPPLY CHAIN
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Short inert “A-C-T-G-C-T-A-G” tag
It’s Your Unique SigNature® T Molecular Tag
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ProvenanceTraceability
Origin Sustainability
AuthenticationRapid and/or Forensic
Analysis
Unique Tag is CreatedFormulated at Parts per BillionApplied onto Billions of Fibers
Raw FiberYarn
FinishedGoods
Packaging
What’s Your Claim?
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The Essence of CertainT™
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CERTAINT™ FOR CONSUMER GOODS
Traceability
Assure in Content Claims in source materials
Assure Label Claims in Consumer Goods
TransparencyTrackability
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Our Value PropositionsUltimate Proof from Molecular Certificates that can not be falsified
Recover counterfeit
market share
Product Differentiation
Sustainability Organic Fair TradeEthical Sourcing Circular Economy
Claims stay with the goods (not paper-trail or the package)
Origin Provenance PurityAuthenticity
Reduce Diversion
Reduce legal supply
chain risk
SatisfyStakeholders
/ Activists
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Disruption is Here and its in Your Sheets
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Patent pending DNA Transfer SystemDNA Transfer System
Gin location
Presence of cotton(flowing/not flowing)
Bale production rate
Status of gin connections
Date/time
Status of system
Amount of SigNature T being sprayed
Amount of SigNature T concentrate remaining 17
Disruption is Here and it is in DNA
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TrackTestTag
-Tag ID-Spraying conditions-Secure storage
-SigNature T test gin cotton-Supply chain sample submission-Self-service reports and analysis
-mobile access-geolocation-timestamp-video links-consumer messaging
DesktopPortable
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Disruption is Here and it’s in DataChain of custody | Geo-location | Authentication records | Documents and images |Reports, queries, alerts
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Proof: Your Shirt Came From This Gin
The Michaels Family
Bowles Farming Company Pacific Gin
www.PimaCott.com
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In developing Kirkland Signature products, we have the unique opportunity to have better control over the entire supply chain, including where the product comes from and under what conditions it is produced.Source: http://www.costco.com/sustainability-kirkland-signature.html
Costco Highlights PimaCott®
https://www.costco.com/sustainability-kirkland-signature.html
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After SigNature T DNA Marking Pima compliance about 100%
The data speak for themselves...Before SigNature T DNA Marking Pima compliance less than 30%
Use of SigNature T DNA eliminates fiber substitution and yields a 100% compliant cotton supply chain
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Disrupting an Industry
(From left to right)• Jerry Harris of King
Mesa Gin
• Mike Conway, Chairman of the House Ag Committee, and
• Sony Perdue, US Secretary of Agriculture
Sept 2017
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Proudly grown by America’s family farmers, HomeGrown is the high-quality American cotton you can feel great about choosing.
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We believe organic cotton is perfect the way it is. Only Organicott is tested for purity from farm to store. So you get nothing but honest-to-
goodness organically grown cotton — the way nature and farmer intended.
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CertainT™ for r-PET
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CertainT™ for recycled PET
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Defense and Security IndustryProviding a secure microcircuit supply chain
for the Defense Logistics Agency. (Over 800,000 components marked & secured)
Protecting cash movement throughout Europe
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DNA-tagged lubricants can
protect machine parts
and tools
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Personal CareEnsuring authentic materials including
certified and those with special provenance
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Fertilizer Supply Chain Check Points
Source: International Fertilizer Development Center (IFDC) as part of AAMP Training Materials
Local transportation
Agro dealer (direct sales or distribution)
Screen Repacking?
Tag Certificate
150 x 100t
Procurement from overseas
fertilizer manufacturers
Quantitative QC
NPK 21.05.05CoA & Tag Certificate
QC Screen
International shipping
Arrival at African port
Screen
Tag Certificate
15ktRepacking?
Inland transportation
Warehousing at port
Screen
Tag Certificate
15 x 1ktRepacking?
Inland warehouse
Farmer
Screen
Tag Certificate Sales bag by bag
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Why DNA Tag leather?
Verify brand claims of: Sustainably produced No deforestation Controlled effluent discharge Responsible use of chemicals Animal welfare Ethically sourced No child or slave labour
Traceability: Enables forensic traceability,
evidence you can use in a court of law
Copyright Applied DNA Sciences Inc. 22nd September 2017
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Pharmaceutical IndustryPreserving patient safety and benefit by
ensuring drug authenticity & active ingredient integrity.
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Transportation IndustryEnsuring the use of authentic
critical components in vehicles, commercial aircraft
and machinery.
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CertainT revenue-generating penetration into supply chain
RawMaterials
Manufacturer Wholesale/Distribution
Retail Finished Goods
Low
High
$Applied DNA
Revenue Potential
Goods ValueWithout CertainT
Goods ValueWith CertainT
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CertainT™ enhanced Videojet systems transform imprints into secure supply chain certification tools.
Secure Chip-locked DNA-Ink Cartridgesonly matched cartridge/device will operate
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data collected from marked packages and items as they progress through the supply chain.
a secure, unique identity is conveyed to a package or item through a Videojet imprint (ink) containing a unique SigNature molecular tag.
conducted in forensic laboratories or on-site with prescribed processes and tools.
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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 theSecurities and Exchange Commission. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or futureperformance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in themost directly comparable measure calculated and presented in accordance with GAAP. The presentation of this non-GAAP financialinformation is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared inpresented in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool. Among other things, Adjusted EBITDA does notinclude all items of income and expense that affect the Company’s operations. Other companies may calculate similarly titled financialmeasures 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 evaluateperiod-to-period comparisons of the performance and results of operations of our core business. Our management believes that thesenon-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 toinvestors as they allow for greater transparency with respect to key metrics used by management in its financial and operational decisionmaking.
“Adjusted EBITDA” is defined as EBITDA adjusted to exclude (i) change in fair value of warrant liability, (ii) the loss on conversion ofpromissory notes, (iii) stock-based compensation and (iv) other non-cash expenses. “EBITDA” is defined as earnings (loss) before interestexpense, income tax expense and depreciation and amortization expense.
Use of Non-GAAP Financial Measures
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Comparative Consolidated Statement of Operations
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Comparative Consolidated
Adjusted EBITDA
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Comparative Consolidated
Balance Sheets
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Today’s successes will be the foundation
of tomorrow’s growth.
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adnas.com+1.631.240.8800
THANK YOU!Jim Hayward