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

Transcription

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

2 Forward-Looking Statement 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 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. 2

3 Applied DNA Sciences (ADNAS) Corporate HQ in Stony Brook, NY NASDAQ-listed as APDN 30,000 ft 2 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 3

4 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. 4

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11 SECURING THE GLOBAL SUPPLY CHAIN 11

12 It s Your Unique SigNature T Molecular Tag What s Your Claim? Provenance Traceability Origin Sustainability Authentication Rapid and/or Forensic Analysis Unique Tag is Created Short inert A-C-T-G- C-T-A-G tag Formulated at Parts per Billion Applied onto Billions of Fibers Raw Fiber Yarn Finished Goods Packaging 12

13 The Essence of CertainT

14 CERTAINT FOR CONSUMER GOODS Assure Label Claims in Consumer Goods Assure in Content Claims in source materials Trackability Transparency Traceability

15 Satisfy Stakeholders / Activists Our Value Propositions Ultimate Proof from Molecular Certificates that can not be falsified Product Differentiation Recover counterfeit market share Claims stay with the goods (not paper-trail or the package) Reduce Diversion Reduce legal supply chain risk Ethical Sourcing Sustainability Organic Fair Trade Circular Economy Authenticity Origin Provenance Purity 15

16 Disruption is Here and its in Your Sheets

17 Disruption is Here and it is in DNA Patent pending DNA Transfer System Gin location DNA Transfer System Status of gin connections Presence of cotton (flowing/not flowing) Date/time Amount of SigNature T being sprayed Bale production rate Status of system Amount of SigNature T concentrate remaining 17

18 Disruption is Here and it s in Data Chain of custody Geo-location Authentication records Documents and images Reports, queries, alerts Tag Test Track Desktop Portable -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 18

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20 The Michaels Family Proof: Your Shirt Came From This Gin Bowles Farming Company Pacific Gin 20

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23 Costco Highlights PimaCott 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:

24 The data speak for themselves... Use of SigNature T DNA eliminates fiber substitution and yields a 100% compliant cotton supply chain Before SigNature T DNA Marking Pima compliance less than 30% After SigNature T DNA Marking Pima compliance about 100%

25 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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27 Proudly grown by America s family farmers, HomeGrown is the high-quality American cotton you can feel great about choosing. 27

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29 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-togoodness organically grown cotton the way nature and farmer intended. 29

30 CertainT for r-pet

31 CertainT for recycled PET

32 Defense and Security Industry Providing a secure microcircuit supply chain for the Defense Logistics Agency. (Over 800,000 components marked & secured) Protecting cash movement throughout Europe 32

33 DNA-tagged lubricants can protect machine parts and tools

34 Personal Care Ensuring authentic materials including certified and those with special provenance 34

35 Fertilizer Supply Chain Check Points Procurement from overseas fertilizer manufacturers QC Screen Quantitative QC NPK CoA & Tag Certificate International shipping 15kt Repacking? Arrival at African port Screen Screen Repacking? Tag Certificate Warehousing at port 15 x 1kt Local transportation 150 x 100t Screen Inland warehouse Tag Certificate Repacking? Screen Inland transportation Tag Certificate Agro dealer (direct sales or distribution) Tag Certificate Sales bag by bag Farmer Source: International Fertilizer Development Center (IFDC) as part of AAMP Training Materials

36 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

37 Pharmaceutical Industry Preserving patient safety and benefit by ensuring drug authenticity & active ingredient integrity. 37

38 Transportation Industry Ensuring the use of authentic critical components in vehicles, commercial aircraft and machinery. 38

39 High $ CertainT revenue-generating penetration into supply chain Goods Value With CertainT Applied DNA Revenue Potential Goods Value Without CertainT Low Raw Materials Manufacturer Wholesale/ Distribution Retail Finished Goods

40 Secure Chip-locked DNA-Ink Cartridges only matched cartridge/device will operate CertainT enhanced Videojet systems transform imprints into secure supply chain certification tools.

41 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. data collected from marked packages and items as they progress through the supply chain.

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43 Use of Non-GAAP Financial Measures 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 noncash 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. 43

44 Comparative Consolidated Statement of Operations 44

45 Comparative Consolidated Adjusted EBITDA 45

46 Comparative Consolidated Balance Sheets 46

47 Today s successes will be the foundation of tomorrow s growth. 47

48 THANK YOU! Jim Hayward adnas.com