Certainty in Uncertain Times Certainty is Only a Molecule Away ™ Investor Call, Q1 FY17 NASDAQ: APDN 9 Feb 2017
Forward-Looking Statement 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. 2
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 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. 3
Comparative Consolidated Quarterly Financial Information 4
Comparative Consolidated Balance Sheets 5
Applied DNA Sciences (APDN): Quick Facts • Based in Stony Brook, NY in a 30,000 square foot facility • 60 employees; 44 patents; 84 patent applications, globally • Standards oriented: ISO 9001:2008 Certified/Registered o ISO/IEC 17025:2005 Accredited o cGMP production in development o Active member of JEDEC, SAE G19 and G21 o • Over 66,000 unique DNA codes deployed globally • Current government contractor: 3 DoD and 3 non-DoD Agencies, additional contracts in development • 100+ forensic cases successfully attributed to SigNature DNA evidence • >150 million pounds of cotton marked with DNA
tag adhesion, embedment, recovery, connected people, places, things in industrial environments cybersecurity panic genotyping of highly processed Keeping Life natural commodities smart products Real and Safe Validations from US Dept of Defense, urbanization UK courts, cotton supply chain Brand Promise Core Competencies MegaTrends that M atter culture of doing well to do good blind trust a thing of the past forensic science “where did this come from?” sustainability scale for unlimited DNA code creation and production responsible sourcing circular economy “identity of things” platform Sources: PWC, E&Y, Forbes, BusinessInsider, Harvard Business Review, Ellen MacArthur Foundation, ADNAS Team
Three DNA-based Business Models Supply Chain Protection Crime Prevention and Security Bulk DNA for Diagnostics and Therapeutics
Products and Services • Products – Concentrates, Carriers and Finished Formulations – Systems for In-field Tagging and Authentication • Services – Development and Consulting – Forensic Laboratory • Genotyping of natural commodities • DNA tag authentication – Field Operations – IT Platform Note: Financials are reported publicly only at the “Total Products” and “Total Services” level
Supply Chain “product genealogy” ink/varnish similar chemistry bearing oil Viscose polyethylene/polypropylene mb Silicone Fertilizer same process similar chemistry similar process TAG Similar process Cotton fiber Polyester same industry Similar Same process commodity pharma/personal care ingredients Transferability of our Our competitive GENOTYPE Same science and methods advantage lies in Commodity accelerates process industries where or process development /sales bulk materials transform cotton aloe / herbs same method cycles to keep us to discrete goods in the ahead of competition value chain
Our Value Propositions from Molecular Certificates that can not be falsified Claims stay with the Recover Recover lost / Reduce legal Tax savings goods (not counterfeit stolen goods risk market share paper-trail or the package) Ethical Sourcing Organic Circular Economy Sustainability Fair Trade Authenticity Origin Provenance Purity
Global Fiber production snapshot – up to 2020 • MMF is close to 70% of world Fiber market • Polyester is driving the MMF growth • Applications across various segments Source: PCI Fibres
Our Strategic Advisory Board Bob Catell Gunther Faber Dr. Mehmood Ray Kelly Khan
Thank you.
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