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Disrupting Uncertainty in Commercial Ecosystems James A. Hayward, Ph.D., Sc.D. President & CEO 27 Sept 2017

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Page 1: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

DisruptingUncertainty

in Commercial EcosystemsJames A. Hayward, Ph.D., Sc.D.

President & CEO27 Sept 2017

Page 2: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 3: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 4: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 5: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by
Page 6: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by
Page 7: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by
Page 8: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by
Page 9: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by
Page 10: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by
Page 11: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

SECURING THEGLOBAL SUPPLY CHAIN

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Page 12: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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?

Page 13: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

The Essence of CertainT™

Page 14: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

CERTAINT™ FOR CONSUMER GOODS

Traceability

Assure in Content Claims in source materials

Assure Label Claims in Consumer Goods

TransparencyTrackability

Page 15: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 16: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Disruption is Here and its in Your Sheets

Page 17: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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

Page 18: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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

Page 19: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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Page 20: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Proof: Your Shirt Came From This Gin

The Michaels Family

Bowles Farming Company Pacific Gin

www.PimaCott.com

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Page 21: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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Page 22: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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Page 23: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 24: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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

Page 25: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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

Page 26: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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Page 27: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Proudly grown by America’s family farmers, HomeGrown is the high-quality American cotton you can feel great about choosing.

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Page 28: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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Page 29: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 30: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

CertainT™ for r-PET

Page 31: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

CertainT™ for recycled PET

Page 32: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 33: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

DNA-tagged lubricants can

protect machine parts

and tools

Page 34: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Personal CareEnsuring authentic materials including

certified and those with special provenance

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Page 35: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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

Page 36: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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

Page 37: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Pharmaceutical IndustryPreserving patient safety and benefit by

ensuring drug authenticity & active ingredient integrity.

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Page 38: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Transportation IndustryEnsuring the use of authentic

critical components in vehicles, commercial aircraft

and machinery.

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Page 39: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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

Page 40: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

CertainT™ enhanced Videojet systems transform imprints into secure supply chain certification tools.

Secure Chip-locked DNA-Ink Cartridgesonly matched cartridge/device will operate

Page 41: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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.

Page 42: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by
Page 43: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

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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Page 44: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Comparative Consolidated Statement of Operations

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Page 45: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Comparative Consolidated

Adjusted EBITDA

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Page 46: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Comparative Consolidated

Balance Sheets

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Page 47: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

Today’s successes will be the foundation

of tomorrow’s growth.

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Page 48: in Commercial Ecosystems · Securities and Exchange Commission.Forward-looking statements include all statements which are not historical facts, and can generally be identified by

adnas.com+1.631.240.8800

THANK YOU!Jim Hayward