certainty is only a molecule away - applied dna sciences · 2017-01-30 · historical facts, and...
TRANSCRIPT
Certainty in Uncertain Times
30 January 2017
Certainty is Only a Molecule Away™
NASDAQ: APDN
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 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
2
Applied DNA Sciences (APDN): Quick Facts • Based in Stony Brook, NY in a 30,000 square foot facility • 60 employees; 44 patents; 83 patent applications, globally • Standards oriented:
o ISO 9001:2008 Certified/Registered o ISO/IEC 17025:2005 Accredited o Active member of JEDEC, SAE G19 and G21
• Over 66,000 unique DNA codes deployed globally • Current government contractor: 3 DoD and 3 non-DoD Agencies • 100+ forensic cases successfully attributed to SigNature DNA evidence • >150 million pounds of cotton marked with DNA
Large Botanical DNA is acquired
DNA is segmented, and encrypted
Segments are shuffled and reassembled to form a unique, secure SigNature DNA marker
Bulk DNA for Diagnostics and Therapeutics
Crime Prevention and Security Supply Chain Protection
Three DNA-based Business Models
Our Lines of Revenue • DNA Tags and carriers
– “concentrate” for OEMs – “final products” for commercial businesses and consumers – “bulk volumes” for diagnostics and therapeutic OEMs
• DNA Tagging systems
• Authentication Solutions – Genotyping of natural commodities – Forensic laboratory services – Field equipment and services
• Online application to manage supply chain data
• Development and Consulting services
Our Value Proposition: Molecular Certificates that can not be falsified
• Embedded, infused – contained within the product itself • Eliminate the potential for cheating in electronic or paper records
• Authenticity
• Origins, Provenance, Purity
• Support for claims difficult to ascertain otherwise – Sustainability – Ethical Sourcing – Fair Trade – Organic – Circular Economy
Figure Attribution: Akzonobel
Supply Chain Technology Geneology
• Our competitive advantage lies in process industries where bulk materials transform to discrete goods in the value chain
• Transferability of our science and methods accelerates Development and Sales Cycles
Grower/Ginner Merchant
Spinner/Weaver Manufacturer
Brand/Retailer Consumer
Purity of Supply Chain, Certainty with DNA
Originally published in 2009
Farm
Traceability/Transparency/Quality Assurance • DNA Barcoding of cotton (called fiberTyping) • DNA Tagging (called SigNature T) • Supply Chain checks and balances (Spinner checks ginner; Weaver checks spinner) • SOPs/Testing Frequency/Onboarding/Compliance Testing throughout Supply Chain
Retail Supply Chain Certainty = DNA Barcoding + Tagging + Process
DNA Tag
Gin Spin
Currently being sold in Retailers
DNA Test
Distribution
Weave Finished Goods
Retail
DNA Test DNA Test DNA Test
Farm Gin
Spinner Knitter
Manufacturer Distributor Inspector
Retailer Consumer
System of Record: • Chain of custody • Geo-location • Authentication records • Documents and images • Reports, queries, alerts
ERP
Check the data… Be certified… the tag and the
type
Identity Tag at source… Confirm the
source… the tag and the
type
Track and Trace Platform to Maintain Evidence
DNA Tagging, the ONLY way to track fiber to source
Applied DNA Sciences Provides Farm-to-Finished Goods Traceability in Long Term Arrangement with Key US Retailer
STONY BROOK, NY. December 14, 2016 - Applied DNA Sciences, Inc. ("Applied DNA or the Company") (NASDAQ: APDN), a provider of DNA-based supply chain, anti-counterfeiting and anti-theft technology, product genotyping and product authentication solutions, is pleased to announce that through one of its partners, the Company will provide its SigNature T DNA products and services platform to empower textile supply chain security for one of the largest US-based retailers over an extended multi-year period with established revenue thresholds. Early products are hitting stores now after tagging in FY15. A larger launch is yet to come.
•After SigNature T DNA Marking Pima compliance about 100%
•Before SigNature T DNA Marking Pima compliance less than 30%
The Data Speak for Themselves
Increasing Demand for DNA-tagged
Cotton Volume and Variety
Pima
20
40
60
80
100
2014/15
2015/16
(2016/17 Completed
ginning – Feb 2017)
Pima
Lbs (millions) of DNA-tagged Cotton produced (to be shipped) Delta
Lone star
Pima
Delta
120
Acala
140
160
Is your T-shirt clean of slavery? Science may soon be able to tell
LONDON (Thomson Reuters Foundation) - Shoppers lured by a bargain-priced T-shirt but concerned about whether the item is free of slave labor could soon have the answer - from DNA forensic technology. Hayward said cotton was one of the most complex supply chains he had come across because it was grown in more than 100 countries and goes through a multi-stage transformation process before emerging in "fast fashion" that is cheap and disposable. Modern slavery has become a catch-all term to describe human trafficking, forced labor, debt bondage, sex trafficking, forced marriage and other slave-like exploitation.
28 Nov 2016
In Physical Cybersecurity: Unhackable DNA
The Tablet Becomes the Barcode
Track, Trace and Protect Products: Fits into Serialization Mandate by Governments
• GS1 Standards • Serialize • Aggregate • Report • Protect Raw Materials Primary Packaging In or onTablet or
Capsule Secondary Packaging
DNA Molecular Tags Strengthen Bar Codes
The Product Genome®
Protecting Personal Care Supply Chains with Botanical DNA
Cash and valuables safely transported.
DNA makes it possible.
The use of DNA-marked degradation dye in the UK has resulted in a 75% reduction in
cash transport attacks. 114 Convictions
541 Sentence Years 26% market share in UK
In Scandinavia
Recovered Steering Wheel from Chop Shop Sting in Stockholm
Location of DNA highlighted by fluorophore
Our Strategic Advisory Board
Bob Catell Gunther Faber Dr. Mehmood Khan
Ray Kelly
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.
Use of Non-GAAP Financial Measures
29
Comparative Consolidated Quarterly Financial Information
30
Comparative Consolidated Annual Financial Information
31
Comparative Consolidated Balance Sheets
32
