Filed Pursuant to Rule 424(b)(5)
File No. 333-238557
PROSPECTUS SUPPLEMENT
(to Prospectus dated May 21, 2020)
1,810,000
SHARES OF COMMON STOCK
We are offering 1,810,000 shares of our
common stock directly to the institutional investors in this offering. The shares of common stock are being offered pursuant to
this prospectus supplement and accompanying prospectus. The purchase price for each share of common stock is $8.30.
The aggregate market value of our outstanding
shares of common stock held by non-affiliates was $63,834,901 based on 5,661,330 shares of common stock outstanding as of January
8, 2021, of which 5,484,098 shares are held by non-affiliates, and a per share price of $11.64 based on the closing sale price
of our common stock on January 8, 2021. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities
in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our
public float remains below $75.0 million. During the 12-month period prior to and including the date of this prospectus supplement,
we did not offer any securities pursuant to General Instruction I.B.6 of Form S-3.
We have engaged Roth Capital Partners, LLC
as our sole placement agent for this offering, or the placement agent. The placement agent is not purchasing or selling any shares
offered by this prospectus supplement and the accompanying base prospectus but will use its reasonable best efforts to arrange
for the sale of the securities offered. See “Plan of Distribution.” This offering is expected to close on or about
January 13, 2021, subject to customary closing conditions, without further notice to you. We have not arranged to place the funds
from the investors in an escrow, trust or similar account.
Our common stock is listed on The Nasdaq
Capital Market under the symbol “APDN.” On January 11, 2021, the last reported sales price of our common stock on The
Nasdaq Capital Market was $8.84 per share.
The purchase of the securities offered
through this prospectus involves a high degree of risk. You should consider carefully the risk factors beginning on page S-13
of this prospectus supplement, on page 4 of the accompanying base prospectus, and in the documents incorporated by reference into
this prospectus supplement before purchasing any of the securities offered by this prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus. Any representation to the contrary is a criminal offense.
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Per Share of Common Stock
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Total
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Public offering price
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$
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8.30
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$
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15,023,000.00
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Placement agent fee (1)
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$
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0.58
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$
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1,051,610.00
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Proceeds to us, before expenses (2)
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$
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7.72
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$
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13,971,390.00
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(1)
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We have agreed to pay the placement agent an aggregate cash placement fee equal to 7.0% of the gross proceeds in this offering from sales arranged by the placement agent. We also have agreed to pay certain expenses of the placement agent, as discussed under “Plan of Distribution” in this prospectus supplement.
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(2)
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Does not include additional compensation received by the placement agent, including reimbursement of legal fees and out of pocket expenses, as further discussed under the heading “Plan of Distribution” herein.
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Roth
Capital Partners
Prospectus Supplement dated January 10,
2021
Table of
Contents
Page
Prospectus Supplement
Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is part of a
registration statement that we filed with the Securities and Exchange Commission (SEC) utilizing a “shelf” registration
process. Under this shelf registration statement process, we may from time to time offer to sell up to $50,000,000 of our common
stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock and/or debt securities, rights to purchase
common stock, preferred stock or warrants and units consisting of shares of common stock, preferred stock, warrants, rights or
debt securities or any combination of these securities in one or more transactions.
We provide information to you about this
offering of our common stock in two separate documents that are bound together: (1) this prospectus supplement, which describes
the specific details regarding this offering of shares of common stock; and (2) the accompanying base prospectus dated May 21,
2020, and that was declared effective on June 1, 2020 and is included in our registration statement on Form S-3 (SEC File No. 333-238557)
(the “Registration Statement”), which provides general information regarding our shares of common stock, shares of
preferred stock, debt securities, warrants to purchase common stock, preferred stock and/or debt securities, rights to purchase
common stock, preferred stock or warrants and units consisting of shares of common stock, shares of preferred stock, warrants,
rights or debt securities, or any combination of these securities and other information some of which may not apply to this offering.
If information in this prospectus supplement is inconsistent with the accompanying base prospectus, you should rely on this prospectus
supplement. If any statement in one of these documents is inconsistent with a statement in another document having a later date,
for example, a document incorporated by reference in this prospectus supplement, the statement in the document having the later
date modifies or supersedes the earlier statement as our business, financial condition, results of operations and prospects may
have changed since the earlier dates.
You should read this prospectus supplement,
together with the accompanying base prospectus, the documents incorporated by reference in this prospectus supplement and the base
prospectus and any free writing prospectus that we have authorized for use in connection with this offering before making an investment
decision. You should also read and consider the information in the documents referred to in the sections of this prospectus supplement
and the accompanying base prospectus entitled “Where You Can Find More Information” and “Information Incorporated
by Reference.” When we refer to this “prospectus”, we are referring to both this prospectus supplement and the
base prospectus combined.
You should rely only on the information
contained or incorporated by reference in this prospectus supplement, the base prospectus, or in any free writing prospectus that
we have authorized for use in connection with this offering. We and the placement agent have not authorized anyone to provide you
with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
This prospectus supplement and the accompanying
prospectus contain summaries of certain provisions contained in some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies
of some of the documents referred to herein have been filed, will be filed or will be incorporated herein by reference as exhibits
to the registration statement, and you may obtain copies of those documents as described below under the section entitled “Where
You Can Find More Information.”
We further note that the representations,
warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference
herein were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating
risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover,
such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties
and covenants should not be relied on as accurately representing the current state of our affairs.
We are not making an offer to sell the securities
covered by this prospectus supplement in any jurisdiction in which an offer or solicitation is not permitted or in which the person
making the offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation.
The information appearing in this prospectus
supplement, the documents incorporated by reference in this prospectus supplement, the base prospectus, and in any free writing
prospectus that we have authorized for use in connection with this offering is accurate only as of its respective date, regardless
of the time of delivery of the respective document or of any sale of securities covered by this prospectus. You should not assume
that the information contained in or incorporated by reference in this prospectus supplement, the base prospectus, or in any free
writing prospectus that we have authorized for use in connection with this offering, is accurate as of any date other than the
respective dates thereof.
Our trademarks currently used in the United
States include Applied DNA Sciences®, SigNature® molecular tags, SigNature® T molecular tags, fiberTyping®, DNAnet®,
SigNify®, Beacon®, CertainT®, LinearDNATM, LineaTM COVID-19 Assay Kit and safeCircleTM
Surveillance Program. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship
with, or endorsement or sponsorship of us by, any other companies. In this prospectus supplement “Applied DNA,” “we,”
“us,” the “Company,” and “our” refer to Applied DNA Sciences, Inc. and its subsidiaries.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus supplement and the documents
incorporated by reference herein contain “forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), that are intended to qualify for the “safe harbor” created by those sections. In addition,
we may make forward-looking statements in other documents filed with or furnished to the SEC, and our management and other representatives
may make forward-looking statements orally or in writing to analysts, investors, representatives of the media and others.
Forward-looking statements can generally
be identified by the fact that they do not relate strictly to historical or current facts and include, but are not limited to,
statements using terminology such as “can”, “may”, “could”, “should”, “assume”,
“forecasts”, “believe”, “designed to”, “will”, “expect”, “plan”,
“anticipate”, “estimate”, “potential”, “position”, “predicts”, “strategy”,
“guidance”, “intend”, “seek”, “budget”, “project” or “continue”,
or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future,
including risks relating to the continuing outbreak of the coronavirus (COVID-19). You should read statements that contain these
words carefully because they:
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discuss our future expectations;
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contain projections of our future results of operations or of our financial condition; and
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state other “forward-looking” information.
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We believe it is important to communicate
our expectations. However, forward-looking statements are based on our current expectations, assumptions, estimates and projections
about our business and our industry and are subject to known and unknown risks, uncertainties and other factors. Accordingly, our
actual results and the timing of certain events may differ materially from those expressed or implied in such forward-looking statements
due to a variety of factors and risks, including, but not limited to, those set forth under “Risk Factors” and “Prospectus
Supplement Summary – Our Company” set forth in this prospectus supplement and those set forth from time to time in
our other filings with the SEC.
Our forward-looking statements address,
among other things:
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our expectations of future revenues, expenditures, capital or other funding requirements;
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the adequacy of our cash and working capital to fund present and planned operations and growth;
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our business strategy and the timing of our expansion plans;
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our expectations concerning product candidates for our technologies;
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our expectations concerning existing or potential development and license agreements for third-party collaborations and joint
ventures;
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our expectations of when different phases of clinical activity may commence and conclude;
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the effect of governmental regulations generally;
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our expectations of when regulatory submissions may be filed or when regulatory clearances or approvals may be received; and
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our expectations of when or if we will become profitable.
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Any or all of our forward-looking statements
may turn out to be wrong. They may be affected by inaccurate assumptions that we might make or by known or unknown risks and uncertainties.
Actual outcomes and results may differ materially from what is expressed or implied in our forward-looking statements. Among the
factors that could affect future results are:
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the inherent uncertainties of product development based on our new and as yet not fully proven technologies;
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the risks and uncertainties regarding the actual effect on humans of seemingly safe and efficacious formulations and treatments
when tested clinically;
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the inherent uncertainties associated with clinical trials of product candidates;
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the inherent uncertainties associated with the process of obtaining regulatory clearance or approval to market product candidates;
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the inherent uncertainties associated with commercialization of products that have received regulatory clearance or approval;
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economic and industry conditions generally and in our specific markets;
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the volatility of, and decline in, our stock price; and
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our current lack of financing for operations and our ability to obtain the necessary financing to fund our operations and effect
our strategic development plan.
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All forward-looking statements and risk
factors included in this prospectus supplement and the documents incorporated herein by reference are made as of the date hereof,
or in the case of documents incorporated by reference, the original date of any such documents, based on information available
to us as of such date, and we assume no obligations to update any forward-looking statement or risk factor, unless we are required
to do so by law. If we do update one or more forward-looking statements, no inference should be drawn that we will make updates
with respect to other forward-looking statements or that we will make any further updates to those forward-looking statements at
any future time.
Any of the assumptions underlying the forward-looking
statements contained in this prospectus supplement and the documents incorporated herein by reference could prove inaccurate and,
therefore, we cannot assure you that the results contemplated in any of such forward-looking statements will be realized. Based
on the significant uncertainties inherent in these forward-looking statements, the inclusion of any such statement should not be
regarded as a representation or as a guarantee by us that our objectives or plans will be achieved, and we caution you against
relying on any of the forward-looking statements contained herein.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights certain information
about us, this offering and information appearing elsewhere in this prospectus supplement, the accompanying base prospectus and
in the documents we incorporate by reference in this prospectus supplement. This summary is not complete and does not contain all
of the information that you should consider before investing in our securities. After you carefully read this summary, to fully
understand our company and this offering and its consequences to you, you should read this entire prospectus supplement, the accompanying
base prospectus, and any related free writing prospectus authorized by us, including the information referred to under the heading
“Risk Factors” in this prospectus supplement beginning on page S-13, and any related free writing prospectus, as
well as the other documents that we incorporate by reference into this prospectus supplement, including our financial statements
and the notes to those financial statements, which are incorporated herein by reference from our Annual Report on Form 10-K for
the year ended September 30, 2020, filed on December 17, 2020. Please read “Where You Can Find More Information” on
page S-24 of this prospectus supplement.
Our Company
Overview
Our proprietary PCR-based DNA LinearDNATM
manufacturing platform produces large quantities of DNA for use in nucleic acid-based in vitro medical diagnostics and preclinical
nucleic acid-based drug development and manufacturing markets (“Biotherapeutic Contract Research and Manufacturing”)
and for supply chain security, anti-counterfeiting and anti-theft technology purposes (“Non-Biologic Tagging”). In
response to the SARS-CoV-2 (“COVID-19”) pandemic, the Company developed a PCR-based molecular diagnostic test for
COVID-19, which was granted Emergency Use Authorization (EUA) by the U.S. Food and Drug Administration (“FDA”) in
May 2020. The Company currently manufactures and sells its EUA authorized COVID-19 molecular diagnostic test kit under the LineaTM
COVID-19 Assay Kit trademark (“COVID-19 Diagnostic Testing”). In addition, and in further response to the COVID-19
pandemic, the Company developed and is currently offering non-diagnostic COVID-19 pooled surveillance testing to detect instances
of COVID-19 in defined populations. The Company’s COVID-19 pooled surveillance testing services are currently offered under
the safeCircleTM trademark (“COVID-19 Surveillance Testing”). The Company is also developing an invasive
circulating tumor cell capture and identification technology (“iCTC Technology”) which uses a patented functional
assay to capture live invasive circulating tumor cell and associated lymphocytes that can be identified and expanded for further
analysis.
Applied DNA’s LinearDNATM
PCR platform is capable of producing large scale DNA, which we believe offers many benefits over the limitations of other large
scale DNA manufacturing systems, including:
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Speed – Production of DNA via the LinearDNATM platform can be measured in terms of hours, not days and weeks
like other large scale DNA manufacturing platforms.
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Scale – The LinearDNATM platform is flexible and can be adapted to encompass large quantity production.
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Purity – DNA produced via PCR is pure, resulting in only large quantities of the target DNA sequence. Unwanted DNA sequences
such as bacterially-derived DNA are not present.
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Customization – DNA produced via PCR can be easily chemically modified to suit specific customer applications.
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Biotherapeutic Contract Research and
Manufacturing
Our patented continuous flow PCR systems
and other proprietary PCR-based production technology and post-processing systems that comprise the LinearDNATM platform
allows for the large-scale production of specific DNA sequences. The LinearDNATM platform is currently being used for
customers to manufacture DNA as components of in vitro diagnostic tests and for preclinical nucleic acid-based drug development
in the fields of adoptive cell therapies (CAR T and TCR therapies), DNA vaccines (anti-viral and cancer), RNA therapies, clustered
regularly interspaced short palindromic repeats (CRISPR) based therapies and gene therapies. We believe our LinearDNATM
platform confers a distinct competitive advantage in cost, cleanliness, and time-to-market as compared to other DNA manufacturing
systems.
The Company provides preclinical contract
research and manufacturing services for the nucleic acid-based therapeutic markets. We work with biotech and pharmaceutical companies
to convert plasmid-based and/or viral transduction-based preclinical biotherapeutics into PCR-produced linear DNA-based forms that
can be produced on our LinearDNATM platform. In addition, we provide contract research services to RNA based drug and
biologic customers for preclinical studies. These services include the design, development and manufacture of PCR-produced DNA
templates for RNA. In addition, we also use our LinearDNATM platform to produce very large gram-scale quantities of
DNA for the in vitro diagnostic market where our DNA is used for both commercially available diagnostics and diagnostics under
development.
We also seek to develop, acquire, and commercialize,
ourselves or with partners, a diverse portfolio of nucleic acid-based therapeutics based on PCR-produced linear DNA to improve
existing nucleic acid-based therapeutics or to create new nucleic acid-based therapeutics that address unmet medical needs. We
are currently directly engaged in preclinical drug candidate development activities focusing on therapeutically-relevant DNA constructs
manufactured via our LinearDNATM platform in the fields of DNA-based anti-viral and anti-cancer vaccines, CAR-T cell
immunotherapy and the manufacture of rAAV vectors for gene therapy.
We are also engaged in preclinical and animal
drug candidate development activities focusing on therapeutically relevant DNA constructs manufactured via our PCR-based production
platform. We seek to develop, acquire and commercialize, alone or with partners, a diverse portfolio of nucleic acid-based therapeutics
based on PCR-produced linear DNA which we believe will improve existing nucleic acid-based therapeutics or create new nucleic acid-based
therapeutics that address unmet medical needs. To this end, we are currently working with our development partners Takis S.R.L.
and Evvivax S.R.L. (“Takis/Evvivax”) to develop an amplicon-based linear DNA vaccine for COVID-19 that would be manufactured
on our LinearDNATM platform. Together with our development partners, our amplicon-based linear COVID-19 vaccine candidate
has shown efficacy in preclinical cell and small animal studies. In September 2020, we entered into an Animal Clinical Trial Agreement
with Takis/Evvivax and with Veterinary Oncology Services, PLLC, an affiliate of Guardian Veterinary Specialists (“GVS”),
a multi-specialty veterinary hospital. In November 2020, we, together with Takis/Evvivax and GVS, announced receipt of approvals
from the New York State Department of Agriculture and Markets and the U.S. Department of Agriculture (“USDA”) on an
advanced clinical strategy to conduct a veterinary trial of a vaccine candidate. Our jointly-developed amplicon-based DNA vaccine
for COVID-19 is expected to start veterinary clinical trials in domestic feline cats by early 2021, with the end goal of applying
for a USDA Animal and Plant Health Inspection Service conditional license to enable commercial veterinary sales for domestic felines.
COVID-19 Diagnostic Testing
On May 13, 2020 we received an EUA from
the FDA for the clinical use of the LineaTM COVID-19 Assay Kit for the qualitative detection of nucleic acid from SARS-CoV-2
in respiratory specimens including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare
worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates,
and bronchoalveolar lavage specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their
healthcare provider. Under the EUA, testing is limited to laboratories certified under the Clinical Laboratory Improvement Amendments
of 1988, 42 U.S.C. §263a (“CLIA”), that meet requirements to perform high complexity tests, which certification
we have applied for but have not yet obtained. As a result, we currently can sell the tests to CLIA laboratories that satisfy
such requirements to perform high complexity tests, but we cannot currently perform the test for the purpose of providing patient
specific results. Subsequently, during July and November 2020, we were granted EUA amendments that expand the installed base of
PCR equipment platforms on which our Linea™ COVID-19 Assay Kit can be processed and significantly increased the daily testing
capacity of the Linea™ COVID-19 Assay Kit through the use of automation. The scope of the EUA, as amended, is expressly
limited to use consistent with the Instructions for Use by authorized laboratories, certified under CLIA to perform high complexity
tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency
use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination
or revocation. Our Linea™ COVID-19 Assay Kit has not been FDA cleared or approved, and the EUA’s limited authorization
is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens. We currently manufacture the
LineaTM COVID-19 Assay Kit at our facilities in Stony Brook, New York.
On September 29, 2020 we announced that
we had entered into a Master Services Agreement with Stony Brook University Hospital to supply the LineaTM COVID-19
Assay Kit and related automation systems.
COVID-19 Surveillance Testing
Starting in July 2020, the Company under
its wholly-owned subsidiary, Applied DNA Clinical Labs LLC (“ADCL”), began offering COVID-19 pooled surveillance testing
to customers as a Testing-as-a-Service (TaaS) offering branded under the safeCircleTM trademark. Unlike diagnostic testing,
which looks for the occurrence of COVID-19 at the individual level, safeCircleTM surveillance testing looks for infections
within a defined population or community and can be used for making health management decisions at the population level. safeCircleTM
surveillance testing uses high-sensitivity pooled COVID-19 testing utilizing the Linea™ COVID-19 Assay Kit. Under the safeCircleTM
surveillance testing service, pooled test results are returned to the sponsoring organization in the aggregate only, not directly
to the participating individuals, and may be performed without CLIA certification. Once potentially infected portions of a defined
population are identified by the safeCircleTM surveillance testing service, the individuals comprising the potentially
infected portions of the defined population are referred to follow on diagnostic testing at a clinical lab to obtain individual
results. ADCL is offering its safeCircleTM surveillance testing in compliance with current CDC, FDA, CMS and New York
State Department of Health recommendations. The use of pooled sampling procedures for the safeCircleTM surveillance
testing service has been internally validated by ADCL in compliance with current CDC guidance. The use of pooled sampling procedures
is not included in the LineaTM COVID-19 Assay Kit EUA.
We seek to commercialize the safeCircleTM
surveillance testing TaaS offering with institutional clients such as schools, colleges and businesses. We currently provide safeCircleTM
surveillance testing to several private schools, New York State-based small enterprises and college athletic programs.
Clinical Testing Laboratory
Under our ADCL subsidiary, we have applied
to the New York State Department of Health for all necessary licensing to operate a New York State clinical diagnostics laboratory.
These applications are currently pending. Until this licensing is obtained, we will be unable to operate a clinical diagnostic
laboratory and cannot provide individual patient testing results. The New York State Department of Health performed its initial
inspection of our clinical laboratory and identified deficiencies in the clinical standard of practice. These deficiencies need
to be rectified before we can submit a request for re-inspection. We are working to rectify these deficiencies now. Through ADCL,
we seek to further commercialize our EUA authorized LineaTM COVID-19 Assay Kit and our iCTC Technology.
iCTC Technology
We seek to further develop, manufacture
and commercialize our Vita-AssayTM iCTC Technology acquired from Vitatex, Inc. in August 2019. Our iCTC Technology uses
a patented functional assay to capture live invasive circulating tumor cell and associated lymphocytes that can be identified and
expanded for further analysis, including genetic sequencing. We believe our iCTC Technology can be used as an early cancer diagnostic
tool, to facilitate cancer disease progression monitoring, to assess metastatic tumor risk and to discover epitopes to serve as
targets for nucleic-acid based immunotherapies. Our iCTC Technology has been used and is currently being used in a human cancer
drug candidate clinical trial to monitor cancer disease progression in the trial subjects as a Research Use Only diagnostic assay.
We believe our iCTC Technology has several advantages over existing in vitro circulating tumor cell diagnostic technologies that
do not capture live iCTC cells. The Company seeks to further develop and commercialize this technology and to potentially integrate
aspects of the iCTC Technology with the LinearDNATM platform for cancer research and nucleic-acid based drug development.
Non-Biologic Tagging and Security Products
and Services
Our supply chain security business allows
our customers to use non-biologic DNA (molecular) tags manufactured on our LinearDNATM platform to mark objects in a
unique manner and then identify these objects by detecting the absence or presence of the molecular tag. We believe our molecular
tags are not economically feasible nor practical to replicate, and that our disruptive tracking platform offers broad commercial
relevance across many industry verticals.
The underlying strategy in our tagging business
is to become an authenticity and traceability platform provider for large complex supply chains, particularly in process industries
in which contracts for our products and services are typically larger and recurring over longer duration as compared to our historic
norms, where the benefits to customers and consumers are more significant, and where our forensic security and traceability offer
a unique and protected value. Using our tagging products and technology, manufacturers, brands, and other stakeholders can ensure
authenticity and protect against diversion throughout a product’s journey from manufacturer to use.
SigNature® Molecular Tags, SigNature®
T Molecular Tags, fiberTyping®, SigNify® Beacon® and CertainT® comprise our principal Non-Biologic tagging and
security technology platform.
Signature Molecular Tags
SigNature® molecular tags manufactured
via our LinearDNATM platform form the core of our supply chain security technology platform. They provide forensic power
and protection for a wide array of applications. Highly secure, robust and durable, SigNature® molecular tags are an ingredient
that can be used to fortify brand protection efforts; strengthen supply chain security; and mark, track and convict criminals.
Through our SigNature® molecular tags, custom DNA sequences can be embedded into a wide range of host carriers including natural
and synthetic materials such as cotton, leather, cannabis, ink, varnish, thread, metal coatings, and pharmaceuticals and nutraceuticals.
SigNature® molecular tag formulations are made to be resistant to challenging environments such as heat, cold, vibration, abrasion,
organic solvents, chemicals, UV radiation and other extreme environmental conditions, and can be identified for numerous years
after being embedded directly into or on an item. The sequence of each individual molecular tag is recorded and stored in a secure
database so that we can later detect it to obtain definitive proof of the presence or absence of a specific molecular tag using
a simple in-field test, or in our laboratories. Our in-lab forensic testing capability delivers Certificate of DNA Authentication
(“CODA”) or an expert witness report, with expert witness services for some cases. Because DNA can be amplified with
high fidelity, only minute quantities of our molecular tags extracted from our customers’ goods are necessary for successful
analysis and authentication. As a result, SigNature® molecular tags can fold seamlessly into production and logistics workflows
at extremely low concentrations.
Our SigNature® molecular tags can be
uniquely designed for specific industries. For example, our SigNature® T molecular tags, designed for textiles and apparel
industry, are specially engineered to adhere tenaciously to textile substrates, which make them resistant to standard textile production
conditions. The result is an enduring forensic level molecular tag that remains present from the fiber stage through to the finished
product. Overall SigNature® molecular tags now exist on hundreds of millions of commodity goods ranging from consumer product
packaging to microcircuits to cotton and synthetic fibers.
SigNify®
SigNify® IF portable DNA readers and
SigNify® consumable reagent test kits provide definitive real-time authentication of molecular tags in the field, providing
a front-line solution for supply chain integrity backed with forensic-level molecular tag authentication.
CertainT®
The CertainT® trademark indicates the
use of our tagging, testing and tracking platforms and solutions, enabling manufacturers, brands and trade organizations to convey
proof of their product claims.
CertainT® and other customer applications
include the use of a software platform that enables customers to manage the security of company-marked goods from point of marking
to point of authentication or validation to end of life. The base platform is configurable to customer requirements. Basic functions
offered include molecular tag inventory management, program training and communications, a database of marked items information,
associated documents and images, chain of custody and location tracking, sample authentication processing and CODA downloads, and
other administrative functions.
Recent Developments
FDA Alert and Letter Regarding the Linea™
COVID-19 Assay Kit and COVID-19 Mutations
On December 29, 2020 the Company received
a letter (the “FDA Information Request”) from the FDA requesting certain information about the potential impact
of the 69—70del SARS-CoV-2 (“COVID-19”) mutation (the “69—70del mutation”) on the performance
of the Linea™ COVID-19 Assay Kit. The 69—70del mutation is a mutation in the S-gene of COVID-19 that is found in several
variants of COVID-19, including, but not limited to the so called “UK Variant,” whose technical designation is UK
COV202012/01 or the B.1.1.7 variant. The B.1.1.7 variant contains many mutations, including the 69—70del mutation.
The B.1.1.7 variant has been associated with an increased risk of transmission. As a result, early identification
of individuals potentially infected with this variant is important because it could reduce further transmission of COVID-19.
In
response to the FDA Information Request, the Company performed analysis of the Linea™ COVID-19 Assay Kit’s performance
in the presence of the 69—70del mutation. Results showed that sensitivity of one of the Linea™ COVID-19 Assay Kit’s
two targets, specifically the S1 target, was highly diminished in the presence of the 69—70del mutation. The sensitivity
of the Linea™ COVID-19 Assay Kit’s other target (S2) was not impacted by the mutation. This results in a detection
pattern in the presence of the 69—70del mutation where the sensitivity of the Linea™ COVID-19 Assay Kit’s S1
target is highly reduced as compared to the sensitivity of the Linea™ COVID-19 Assay Kit’s S2 target (“S-gene
target dropout”). While reduced sensitivity with molecular diagnostics is typically not desirable, with certain multi-target
COVID-19 molecular diagnostic tests such as the Linea™ COVID-19 Assay Kit, reduced sensitivity in regard to one target allows
viral variants to be identified while still detecting the presence of COVID-19 via the assay’s other target(s). On December
31, 2020, the Company responded to the FDA Information Request informing the FDA of the Linea™ COVID-19 Assay Kit’s
S-gene target dropout in the presence of the 69—70del mutation.
On January 8, 2021, the FDA issued an Alert
to Health Care Providers and Clinical Laboratory Staff (the “FDA Alert”) regarding the potential impact of COVID-19
mutations on the accuracy of COVID-19 molecular diagnostic tests. Coincident with the FDA Alert, the FDA also issued a Letter to
Health Care Providers and Clinical Laboratory Staff (the “FDA Letter”). The FDA Alert and the FDA Letter advised that
false negatives are a risk with all laboratory tests, including COVID-19 molecular diagnostic tests. The FDA further advised that
false negatives can occur with any COVID-19 molecular diagnostic test if a mutation occurs in the region of the virus that the
test is designed to assess. The FDA explained that the potential for false negatives with COVID-19 molecular diagnostics may be
increased with tests that only assess a single region of the COVID-19 virus as compared to tests that assess more than one region
of the virus. The FDA stated that it believes the overall impact of COVID-19 mutations on testing accuracy will be low.
The FDA Alert and the FDA Letter also stated
that FDA is conducting continuous data analysis to evaluate all currently EUA authorized molecular tests in light of COVID-19 mutations.
Based on the FDA’s own analysis and input from manufacturers, the FDA Alert and the FDA Letter identified three EUA authorized
molecular diagnostic tests that might be impacted by currently known COVID-19 mutations. The FDA Alert and the FDA Letter stated
that the Linea™ COVID-19 Assay Kit and one other molecular diagnostic test exhibit S-gene target dropout detection patterns
when certain COVID-19 variants are present, including variants with the 69—70del mutation, which includes the B.1.1.7 variant.
The FDA Letter further stated that this detection pattern may help with the early identification of new COVID-19 variants in patients,
including variants with the 69—70del mutation, which could help to reduce the further spread of COVID-19. The FDA Letter
further noted that when the S-gene target dropout is observed in patient samples tested with the identified kits such samples should
be considered for further characterization via full genetic sequencing, which would allow for identification of the specific variant
at issue. The FDA letter further concluded that due to the identified kits’ multi-target design, overall test sensitivity
should not be impacted.
Preliminary First Quarter 2021 Results
On January 4, 2021, the Company announced
that it expects revenues for the first fiscal quarter of 2021 ended December 31, 2020, to be in the range of $1.3 million to $1.6
million compared to revenues of $314,000 in the fourth quarter of fiscal 2020. The sequential growth in quarterly revenues is driven
principally by demand for safeCircle™, the pooled COVID-19 surveillance testing program offered by the Company’s subsidiary,
ADCL, and from sales of its Linea™ COVID-19 Assay Kit under EUA by the FDA EUA). These preliminary unaudited results are
based on management’s initial analysis of operations for the first fiscal quarter of 2021 ended December 31, 2020, and are
subject to review and revision. The Company expects to issue full financial results for the first fiscal quarter of 2021 in mid-February.
SUMMARY OF RISKS
Our business is subject to numerous risks
and uncertainties, discussed in more detail in the following section. These risks include, among others, the following key risks:
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The COVID-19 global pandemic may continue to materially and adversely impact our business, financial condition and results
of operations.
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Our ability to continue as a going concern.
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We have a history of net losses.
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We have not produced significant revenues. This makes it difficult to evaluate our future prospects and increases the risk
that we will not be successful.
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Our opportunities in medical devices, pharmaceuticals and biologics will require substantial additional funding. We may not
be successful in our efforts to create a pipeline of product candidates or to develop commercially successful products. If we fail
to successfully identify, finance and develop product candidates, our commercial opportunities in medical devices, pharmaceuticals
and biologics may be limited.
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Our LineaTM COVID-19 Assay Kit is being sold under a FDA EUA which could be revoked or terminated by the FDA at
any time and will cease to be effective once the public health emergency justifying its use ends.
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Our COVID-19 Surveillance Testing may become obsolete for a variety of reasons, including an end to the current pandemic. The
utility will also be diminished if positivity rates reach levels high enough to render surveillance testing ineffective or inefficient.
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Our LineaTM COVID-19 Assay Kits could become obsolete or their utility could be significantly diminished.
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Medical device, pharmaceutical and biologic products are highly complex, and if we or our collaborators and customers are unable
to provide quality and timely offerings to our respective customers, our business could suffer.
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Pharmaceutical and biologic-related revenue will be dependent on our collaborators’ and customers’ demand for our
manufacturing services.
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The markets for our medical devices, drug and biologic candidates and linear DNA are very competitive, and we may be unable
to continue to compete effectively in these industries in the future.
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The markets for our supply chain security and product authentication solutions are very competitive, and we may be unable to
continue to compete effectively in these industries in the future.
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Intellectual property litigation could harm our business, financial condition and results of operations.
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Our joint pursuit of a potential vaccine for COVID-19 is at an early stage and may be unable to produce a vaccine that successfully
treats the virus in a timely manner, if at all, and compete successfully with vaccines developed by larger companies.
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Medical device, pharmaceutical and biologic-related revenue is generally dependent on regulatory authorization, clearance or
approval, oversight and compliance.
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The regulatory authorization, clearance and approval processes of the FDA and comparable foreign regulatory authorities are
lengthy, time consuming, and inherently unpredictable. If we are ultimately unable to obtain regulatory authorization, clearance
or approval for our product candidates, we will be unable to generate product revenue from the related product candidates and our
business may be substantially harmed.
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If the FDA were to begin to enforce regulation of Laboratory Developed Tests (“LDTs”), we could incur substantial
costs and delays associated with trying to obtain pre-market clearance or approval and costs associated with complying with post-market
requirements if clearance or approval is ever obtained.
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If we are unable to obtain laboratory licensure or we fail to comply with laboratory licensing requirements, we would not be
able to offer clinical diagnostic testing services.
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If we fail to comply with healthcare laws, we could face substantial penalties and our business, operations and financial conditions
could be adversely affected.
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We need to expand our sales, marketing and support organizations to increase market acceptance of our products and services.
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If we are unable to continue to retain the services of Dr. Hayward, we may not be able to continue our operations.
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We may have conflicts of interest with our affiliates and related parties, and in the past we have engaged in transactions
and entered into agreements with affiliates that were not negotiated at arms’ length.
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In addition to the above key factors, as
well as other variables affecting our operating results and financial condition, past financial performance may not be a reliable
indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. The
following are important factors that could cause actual results or events to differ materially from those contained in any forward-looking
statements made by us or on our behalf. The risks and uncertainties described below are not the only ones we face. In addition
to the factors discussed elsewhere in this prospectus supplement and our other reports and documents filed with the SEC, risks
and uncertainties not presently known to us or that we may currently deem immaterial also may impair our business, financial condition,
operating results and/or stock price. If any of the following risks or such other risks actually occurs, our business, financial
condition, operating results and/or stock price could be harmed. In the following factors, “volatility in our share price”,
“adverse impact on the price (or value) of our shares”, “decline in the price of our common stock” and
similar terms also refer to our warrants and shares to be received upon exercise of our warrants.
CORPORATE INFORMATION
We are a Delaware corporation, which was
initially formed in 1983 under the laws of the State of Florida as Datalink Systems, Inc. In 1998, we reincorporated in the State
of Nevada, and in 2002, we changed our name to our current name, Applied DNA Sciences, Inc. In December 2008, we reincorporated
from Nevada to the State of Delaware. LineaRx, Inc. was incorporated in Delaware on September 11, 2018. ADCL was formed in Delaware
on June 12, 2020.
Our corporate headquarters are located at
the Long Island High Technology Incubator at Stony Brook University in Stony Brook, New York, where we established laboratories
for the manufacture of molecular tags, product prototyping, molecular tag authentication, bulk DNA production, as well the manufacture
of our Linea™ COVID-19 Assay Kit and the performance of our COVID-19 Surveillance Testing. The address of our corporate headquarters
is 50 Health Sciences Drive, Stony Brook, New York 11790, and our telephone number is (631) 240-8800. We maintain a website at
www.adnas.com where general information about us is available. The information on, or that may be accessed through, our website
is not incorporated by reference into and should not be considered a part of this prospectus supplement.
THE OFFERING
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Securities offered:
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1,810,000 shares of our common stock
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Offering price per share of common stock:
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$8.30 per share
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Common stock outstanding before the offering(1):
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5,661,330 shares
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Common stock to be outstanding after the offering(1)(2):
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7,471,330 shares
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Use of Proceeds:
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We intend to use the net proceeds from this offering for general corporate purposes, including working capital, for research and development, and to advance the adoption of our LinearDNATM manufacturing platform.
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Listing and Symbols:
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Our common stock is listed on The Nasdaq Capital Market under the symbol “APDN”.
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Risk Factors:
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Investing in our securities involves substantial risks. You should carefully review and consider the “Risk Factors” section of this prospectus supplement beginning on page S-13 and on page 4 of the accompanying base prospectus, as well as the other information in this prospectus supplement for a discussion of the factors you should consider before you decide to invest in this offering.
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(1)
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The number of shares of our common stock outstanding
as of January 11, 2021 excludes 443,178 shares of common stock issuable upon exercise of outstanding stock options, at a weighted
average exercise price of $43.74 per share and 778,118 shares
of common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $13.08 per share.
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(2)
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The total number of shares of our common stock outstanding
after this offering is based on 5,661,330 shares outstanding as
of January 11, 2021, excluding 443,178 shares of common stock issuable upon exercise of outstanding stock options, at a weighted
average exercise price of $43.74 per share and 778,118 shares
of common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $13.08 per share.
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RISK FACTORS
Investment in our securities involves a
high degree of risk. In addition to the risks and investment considerations discussed elsewhere in this prospectus supplement or
any document incorporated by reference herein, the following factors should be carefully considered by anyone purchasing the securities
offered by this prospectus supplement. The risks and uncertainties described below are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. We also
update risk factors from time to time in our periodic reports on Forms 10-K, 10-Q and 8-K which will be incorporated by reference
in this prospectus supplement. If any of the following risks actually occur, our business could be harmed. In such case, the trading
price of our common stock could decline and investors could lose all or a part of their investment.
See also the statements contained under
the heading “Special Note Regarding Forward Looking Statements.”
Risks Relating to this Offering:
Our management has broad discretion as to the use of
the net proceeds from this offering.
We cannot specify with certainty the particular
uses of the net proceeds we will receive from this offering, and these uses may vary from our current plans. Our management will
have broad discretion in the application of the net proceeds, including for any of the purposes described in “Use of Proceeds.”
Accordingly, you will have to rely upon the judgment of our management with respect to the use of the proceeds. Our management
may spend a portion or all of the net proceeds from this offering in ways that holders of our common stock may not desire or that
may not yield a significant return or any return at all. The failure by our management to apply these funds effectively could harm
our business. Pending their use, we may also invest the net proceeds from this offering in a manner that does not produce income
or that loses value.
If you purchase the common stock, you will experience
immediate dilution as a result of this offering.
Since the price per share of our common
stock being offered is substantially higher than the net tangible book value per share of our common stock, you will suffer immediate
and substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on a public offering
price of $8.30 per share, if you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution
of approximately $5.63 per share in the net tangible book value of the common stock. See the section entitled “Dilution”
in this prospectus supplement for a more detailed discussion of the dilution you will incur if you purchase common stock in this
offering.
You may experience future dilution as a result of future
equity offerings.
In order to raise additional capital, we
may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common
stock that could result in further dilution to investors purchasing our common stock in this offering or result in downward pressure
on the price of our common stock. We may sell shares of our common stock or other securities in any other offering at prices that
are higher or lower than the prices paid by investors in this offering, and investors purchasing shares or other securities in
the future could have rights superior to existing stockholders. Moreover, to the extent that we issue options or warrants to purchase,
or securities convertible into or exchangeable for, shares of our common stock in the future and those options, warrants or other
securities are exercised, converted or exchanged, stockholders may experience further dilution.
The trading price of our common stock has been, and
is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of
which are beyond our control.
Our stock price is volatile. During the
period from January 1, 2020 to January 11, 2021, the closing price of our common stock ranged from a high of $15.21 per share
to a low of $2.80 per share. The stock market in general and the market for smaller pharmaceutical and biotechnology companies
in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
As a result of this volatility, you may not be able to sell your common stock at or above the public offering price and you may
lose some or all of your investment.
Risks Relating to Our Business:
The COVID-19 global pandemic may continue to materially
and adversely impact our business, financial condition and results of operations.
Our business has been and could continue
to be materially and adversely affected by the outbreak of a widespread health epidemic. The present coronavirus (or COVID-19)
pandemic has disrupted our operations and has affected our business, as government authorities impose mandatory closures, work-from-home
orders and social distancing protocols or impose other restrictions that could materially adversely affect our ability to adequately
staff and maintain our operations. Portions of our business are considered “essential” such as our government and
pharmaceutical contracts, as well as our vaccine and diagnostic candidate development and our COVID-19 Surveillance Testing. However,
we have experienced, and may continue to experience in the future, facility closures related to our “nonessential”
businesses, and pursuant to the government order, the Company has reduced the scope of its operations and where possible, certain
workers are telecommuting from their homes. As a result of COVID-19 we have experienced a decline in revenues from non-biological
tagging and related services. As the COVID-19 outbreak and responses to it continue to evolve, we may experience further adverse
impacts on our operations, including our ability to secure supplies, and our ability to access capital on favorable terms, or
at all, may be impaired. There may also be long-term effects on our customers in and the economies of affected countries. Although
the duration and ultimate impact of these factors is unknown at this time, the decline in economic conditions due to COVID-19,
or another disease causing similar impacts, may adversely affect our business, financial condition and results of operations and
such impact may be material.
There is substantial doubt relating to our ability to
continue as a going concern.
We have recurring net losses, which have
resulted in an accumulated deficit of $269,835,650 as of September 30, 2020. We have incurred a net loss of $13,028,904 for the
fiscal year ended September 30, 2020. At September 30, 2020, we had cash and cash equivalents of $7,786,743. We have concluded
that these factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the
financial statements. In addition, the report from our independent registered public accounting firm for the year ended September
30, 2020 includes an explanatory paragraph stating that our significant losses and needs to raise additional funds to meet our
obligations and sustain operations raise substantial doubt about our ability to continue as a going concern. We will continue to
seek to raise additional working capital through public equity, private equity or debt financings. If we fail to raise additional
working capital, or do so on commercially unfavorable terms, it would materially and adversely affect our business, prospects,
financial condition and results of operations, and we may be unable to continue as a going concern. Future reports from our independent
registered public accounting firm may also contain statements expressing substantial doubt about our ability to continue as a going
concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about
our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding
to us on commercially reasonable terms, if at all.
Our new emphasis on biotherapeutic contract research
and manufacturing and COVID-19 diagnostic and surveillance testing may reduce our ability to maintain and expand our existing Non-Biologic
Tagging businesses.
Our new emphasis on biotherapeutic contract
research and manufacturing and COVID-19 diagnostic and surveillance testing may divert funding and our limited managerial and other
resources from our existing non-biologic tagging businesses. This may have the effect of reducing opportunities to grow or maintain
revenues in our existing businesses while at the same time we may fail in our biotherapeutic contracts research and manufacturing
and COVID-19 diagnostic and surveillance testing efforts.
Risks Relating to Our Product Candidates,
Manufacturing, Development, and Industries:
Our LineaTM COVID-19 Assay Kit is being sold
under an FDA EUA.
Our LineaTM COVID-19 Assay Kit
has not been cleared or approved by FDA, but has been authorized for sale under an EUA. The FDA has the authority to grant an EUA
to allow unapproved medical products to be used in an emergency when there are no adequate, approved, and available alternatives.
The EUA authorizes our test to be used by laboratories certified to perform high complexity testing under CLIA. The EUA includes
conditions of authorization with which we must comply, including, but not limited to, compliance with labeling, distribution of
materials designed to ensure proper use, reporting obligations, and restrictions on advertising and promotion. Distributors of
and laboratories using our LineaTM COVID-19 Assay Kit must also comply with the relevant provisions of our EUA. The
EUA is only effective for the duration of the COVID-19 public health emergency. The FDA may revoke or terminate the EUA sooner
if, for example, we fail to comply with the terms of the EUA or our test is determined to be less accurate than it was initially
believed to be. We cannot predict how long the EUA will remain in place. If the EUA is revoked or terminated, it could significantly
harm our business, results of operations, and profits.
Our safeCircleTM surveillance testing service
could become obsolete or its utility could be significantly diminished.
Surveillance testing is not regulated by
the FDA and CMS has stated that CLIA certification is not required to conduct surveillance testing. ADCL is offering its safeCircleTM
surveillance testing in compliance with current CDC, FDA, CMS and New York State Department of Health recommendations. The regulatory
framework or recommendations regarding COVID-19 Surveillance Testing could change at any time. Further, our COVID-19 Surveillance
Testing may become obsolete for a variety of reasons, including an end to the current pandemic or the development and widespread
distribution of a vaccine, including the vaccines developed by Pfizer-BioNTech or Moderna for which the FDA has recently granted
emergency use authorization. In addition, the utility of these services will also diminish if positivity rates reach levels high
enough to render surveillance testing ineffective or inefficient.
Our LineaTM COVID-19 Assay Kits could become
obsolete or their utility could be significantly diminished.
Our LineaTM COVID-19 Assay Kits
may become obsolete for a variety of reasons, including an end to the current pandemic, the development and widespread distribution
of a vaccine, including the vaccines developed by Pfizer-BioNTech or Moderna for which the FDA has recently granted emergency use
authorization. In addition, future or currently undiscovered mutations to the COVID-19 virus could result in our LineaTM
COVID-19 Assay Kits suffering a loss of sensitivity and resulting loss of utility.
Our LineaTM COVID-19 Assay Kit may result
in false negatives.
False negative test results are a risk
with all laboratory tests, including COVID-19 molecular diagnostic tests. A false negative occurs with a COVID-19 molecular diagnostic
when an individual who is infected with the virus tests negative for the virus. False negatives can occur in the presence
or absence of a mutation in the COVID-19 virus. In the presence of a mutation in the virus, false negatives can occur if
a mutation occurs in the region of the virus that the test is designed to assess. The risk of false negatives in the presence
of a mutation is increased with tests that only assess a single region of the COVID-19 virus as compared to tests that assess
more than one region of the virus. Our LineaTM COVID-19 Assay Kit test assesses two regions of the virus,
thus reducing the likelihood of false negatives in the presence of one or more COVID-19 mutations. Regardless, false negatives
may occur with our LineaTM COVID-19 Assay Kit in the presence or absence of one or more COVID-19 mutations.
If false negatives occur with our LineaTM COVID-19 Assay Kit, individuals will incorrectly believe they do not
have COVID-19 and could further spread the virus thereby jeopardizing the health of others.
Other companies may develop and obtain authorization for
molecular diagnostics that can detect the 69—70del mutation.
The 69—70del mutation is a mutation
that is found in several variants of COVID-19, including, but not limited to the so called “UK Variant” or the B.1.1.7
variant. The B.1.1.7 variant has been associated with an increased risk of transmission. According to an Alert to Health
Care Providers and Clinical Laboratory Staff and a Letter to Health Care Providers and Clinical Laboratory Staff both issued by
the FDA on January 8, 2021, there are currently only two EUA authorized COVID-19 molecular diagnostics that can indicate a sample
contains the 69—70del mutation, including our LineaTM COVID-19 Assay Kit. Other companies may develop
and obtain Emergency Use Authorization for COVID-19 molecular diagnostics that can detect the 69—70del mutation. Such
tests would compete with our test and could negatively impact sales of our LineaTM COVID-19 Assay Kit.
USE OF PROCEEDS
We estimate that the net proceeds from the
sale of the shares of common stock we are offering will be approximately $13.7 million. Net proceeds are what we expect to receive
after paying the placement agent’s fees and other expenses of the offering.
We intend to use the net proceeds received
from this offering for general corporate purposes, including working capital, for research and development, and to advance the
adoption of our LinearDNA™ manufacturing platform. The actual allocation of proceeds realized from this offering will depend
upon our operating revenues and cash position and our working capital requirements.
Therefore, as of the date of this prospectus
supplement, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the completion
of this offering. Accordingly, we will have broad discretion in the application of the net proceeds, and investors will be relying
on our judgment regarding the application of the proceeds of this offering.
Pending our use of the net proceeds from
this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade,
interest-bearing instruments and U.S. government securities.
We have never declared or paid any cash
dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition,
any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our
financial condition, results of operations, capital requirements, and such other factors as our board of directors deems relevant
at such time.
DILUTION
If you purchase securities in this offering,
your interest will be immediately and substantially diluted to the extent of the difference between the public offering price per
share of our common stock in this offering and the as adjusted net tangible book value per share of our common stock after giving
effect to this offering.
Our net tangible book value as of September
30, 2020 was approximately $4,818,790, or approximately $0.94 per share of common stock. After giving effect to the sale of the
shares in this offering at the public offering price of $8.30 per share, and after deducting the placement agent’s fees and
other estimated offering expenses payable by us, our pro forma as adjusted net tangible book value at September 30, 2020 would
have been approximately $18,529,180 or $2.67 per share. This represents an immediate increase in net tangible book value of approximately
$1.73 per share to our existing stockholders, and an immediate dilution of $5.63 per share to investors purchasing shares in the
offering.
Dilution in net tangible book value per
share represents the difference between the amount per share paid by purchasers of our common stock in this offering and the net
tangible book value per share of our common stock immediately after this offering.
The following table illustrates the per
share dilution to investors purchasing securities in the offering:
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Public offering price per share
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$
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8.30
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Net tangible book value per share as of September 30, 2020
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$
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0.94
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Increase in net tangible book value per share attributable to this offering
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$
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1.73
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Adjusted net tangible book value per share after this offering
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$
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2.67
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Amount of dilution in net tangible book value per share to new investors in this offering
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$
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5.63
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The discussion and tables above are
based on 5,142,779 shares of our common stock outstanding as of September 30, 2020, which excludes 291,035 shares of common
stock issuable upon exercise of outstanding options and 1,038,919 shares of common stock issuable upon exercise of
outstanding warrants as of such date. To the extent that options or warrants outstanding as of September 30, 2020 have been
or may be exercised, investors purchasing our common stock in this offering may experience further dilution. In addition, we
may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have
sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale
of equity or convertible debt securities, the issuance of these securities could result in further dilution to our
stockholders.
DIVIDEND POLICY
We have never
paid cash dividends on our common stock. We anticipate that we will retain all of our future earnings, if any, for use in the expansion
and operation of our business and do not anticipate paying cash dividends in the foreseeable future.
PLAN OF DISTRIBUTION
Roth Capital Partners, LLC has agreed to
act as our sole placement agent in connection with this offering subject to the terms and conditions of a placement agency agreement,
dated January 10, 2021 between Roth Capital Partners, LLC and us. The placement agent is not purchasing or selling any shares offered
by this prospectus supplement and the accompanying base prospectus but has arranged for the sale of certain of the shares offered
hereby through a securities purchase agreement entered into between the purchasers and us. The public offering price of the shares
offered by this prospectus supplement and the accompanying base prospectus has been determined based upon arm’s-length negotiations
between the purchasers and us.
We have entered into a securities purchase
agreement directly with the investors in this offering. A form of the securities purchase agreement was included as Exhibit 10.2
to our Current Report on Form 8-K filed with the SEC in connection with this offering. The securities purchase agreement provides
such investors with certain representations, warranties and covenants, including indemnifications, from us. Our obligation to issue
and sell the shares of common stock to the investors who are party to the securities purchase agreement is subject to the closing
conditions set forth in the securities purchase agreement, including the absence of any material adverse change in our business
and the receipt of certain opinions, letters and certificates from us or our counsel, which may be waived by the respective parties.
All of the shares will be sold at the offering price specified in this prospectus supplement and, we expect, at a single closing.
Commissions and Expenses
We have agreed to pay the placement agent
an aggregate cash placement fee equal to 7.0% of the gross proceeds in this offering from sales arranged for by the placement agent.
Subject to certain conditions, we also have agreed to reimburse all reasonable travel and other out-of-pocket expenses of the placement
agent in connection with this offering, including but not limited to the reasonable fees of legal counsel, not to exceed $50,000.
We currently anticipate that the delivery
of the shares will occur on or about January 13, 2021. At the closing, The Depository Trust Company will credit the shares of common
stock to the respective accounts of the purchasers or the transfer agent will issue the shares to the purchasers in book-entry
form, as elected by the purchasers in their respective purchase agreements.
Other Terms
Under the securities purchase agreement, and subject to certain
exceptions, we have agreed not to (i) enter into any agreement to issue or announce the issuance or proposed issuance of any common
stock or common stock equivalents, or (ii) file any registration statement or amendment or supplement thereto, for a period of
90 days following the closing of the offering.
Lock-Up Agreements.
In connection with this offering, each of our executive officers
and directors has agreed, subject to certain exceptions set forth in the lock-up agreements, not to sell, offer, agree to sell,
contract to sell, hypothecate, pledge, grant any option to purchase, make any short sale of, or otherwise dispose of, directly
or indirectly, any shares of our common stock, or any securities convertible into or exercisable or exchangeable for shares of
our common stock, for 90 days following the closing of the offering. The purchasers party to the securities purchase agreement
may, in their sole discretion and without notice, waive the terms of the lock-up agreement.
Determination of Offering Price
The public offering price of the shares
of common stock we are offering was negotiated between us and the investors, in consultation with the placement agent based on
the trading of our common stock prior to the offering, among other things. Other factors considered in determining the public offering
price of our common stock we are offering include our history and prospects, the stage of development of our business, our business
plans for the future and the extent to which they have been implemented, an assessment of our management, general conditions of
the securities markets at the time of the offering and such other factors as were deemed relevant.
Regulation M Restrictions
The placement agent may be deemed to be
an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit
realized on the resale of any shares of common stock sold by it while acting as a principal might be deemed to be underwriting
discounts or commissions under the Securities Act. As an underwriter, the placement agent would be required to comply with the
requirements of the Securities Act and the Exchange Act including Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation
M promulgated under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares offered
hereby by the placement agent acting as a principal. Under these rules and regulations, the placement agent:
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must not engage in any stabilization activity in connection with our securities; and
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must not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other
than as permitted under the Exchange Act, until it has completed its participation in the distribution.
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Passive Market Making
In connection with this offering, the placement
agent may engage in passive market making transactions in our common stock on the Nasdaq Stock Market in accordance with Rule 103
of Regulation M promulgated under the Exchange Act during a period before the commencement of offers or sales of shares of our
common stock and extending through the completion of the distribution. A passive market maker must display its bid at a price not
in excess of the highest independent bid of that security. If all independent bids are lowered below the passive market maker’s
bid, however, that bid must then be lowered when specified purchase limits are exceeded.
Indemnification
We have agreed to indemnify the placement
agent against certain liabilities, including liabilities under the Securities Act, and liabilities arising from breaches of representations
and warranties contained in the placement agency agreement, or to contribute to payments that the placement agent may be required
to make in respect of those liabilities.
Other Relationships
The placement agent and its affiliates may
in the future engage in investment banking transactions and other commercial dealings in the ordinary course of business with us
or our affiliates. The placement agent has received, or may in the future receive, customary fees and commissions for these transactions.
Electronic Distribution
This prospectus supplement and the accompanying
base prospectus may be made available in electronic format on websites or through other online services maintained by the placement
agent or by an affiliate. Other than this prospectus supplement and the accompanying base prospectus, the information on the placement
agent’s website and any information contained in any other website maintained by the placement agent is not part of this
prospectus supplement and the accompanying base prospectus or the registration statement of which this prospectus supplement and
the accompanying base prospectus forms a part, has not been approved and/or endorsed by us or the placement agent, and should not
be relied upon by investors.
The foregoing does not purport to be a complete
statement of the terms and conditions of the placement agency agreement and subscription agreements. A copy of the placement agent
agreement and the form of securities purchase agreement with the purchasers are included as exhibits to our Current Report on Form
8-K filed with the SEC in connection with this offering and incorporated by reference into the Registration Statement of which
this prospectus supplement forms a part. See “Where You Can Find More Information.”
Listing
Our common stock is listed on The Nasdaq
Capital Market under the symbol “APDN.”
LEGAL MATTERS
The validity of the issuance of the securities
offered hereby will be passed upon for us by Troutman Pepper Hamilton Sanders LLP, New York, New York. Ellenoff Grossman &
Schole LLP, New York, New York, is acting as counsel for the placement agent in this offering.
EXPERTS
Marcum LLP, independent registered public
accounting firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended
September 30, 2020, as set forth in their report, which is incorporated by reference in the prospectus and elsewhere in this registration
statement. Our consolidated financial statements are incorporated by reference in reliance on Marcum LLP’s report, given
on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration
statement on Form S-3 (File No. 333-238557), of which this prospectus supplement and the accompanying base prospectus are a part,
under the Securities Act, to register the shares of common stock offered by this prospectus supplement. However, this prospectus
supplement and the accompanying base prospectus do not contain all of the information contained in the Registration Statement.
We have omitted from this prospectus supplement some parts of the Registration Statement as permitted by the rules and regulations
of the SEC. Statements in this prospectus supplement concerning any document we have filed as an exhibit to the Registration Statement
or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified in their entirety by reference to
these filings. In addition, we file annual, quarterly and other reports, proxy statements and other information with the SEC. Our
SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov. Our Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including any amendments to those reports, and other information
that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can also be accessed free of charge
through the Internet. These filings will be available as soon as reasonably practicable after we electronically file such material
with, or furnish it to, the SEC. Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including
any amendments to those reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d)
of the Exchange Act, can also be accessed free of charge from our website at http://www.adnas.com. These filings will be available
as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information contained
on our website is not part of this prospectus supplement.
INFORMATION INCORPORATED BY REFERENCE
We have elected to incorporate certain information
by reference into this prospectus supplement. By incorporating by reference, we can disclose important information to you by referring
you to other documents we have filed or will file with the SEC. The information incorporated by reference is deemed to be part
of this prospectus supplement, except for information incorporated by reference that is superseded by information contained in
this prospectus supplement. This means that you must look at all of the SEC filings that we incorporate by reference to determine
if any statements in the prospectus supplement or any document previously incorporated by reference have been modified or superseded.
This prospectus supplement incorporates by reference the documents set forth below that we have previously filed with the SEC,
except in each case the information contained in such document to the extent “furnished” and not “filed”:
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Our Annual Report on Form 10-K for the year ended September 30, 2020, as filed with the SEC
on December 17, 2020.
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All reports
and other documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date
of the registration statement to which this prospectus supplement forms a part of and prior to the effectiveness of such registration
statement or after the date of this prospectus supplement and prior to the termination or completion of the offering of Securities
under this prospectus supplement shall be deemed to be incorporated by reference in this prospectus supplement and to be a part
hereof from the date of filing such reports and other documents.
You may obtain a copy of any or all of the
documents referred to above which may have been or may be incorporated by reference into this prospectus supplement, except for
exhibits to those documents (unless the exhibits are specifically incorporated by reference into those documents) at no cost to
you by writing or telephoning us at the following address: Office of the Corporate Secretary, Applied DNA Sciences, Inc., 50 Health
Sciences Drive, Stony Brook, New York 11790, telephone (631) 240-8800.
Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, including any amendments to those reports, and other information that we
file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, can also be accessed free of charge from
our website at http://www.adnas.com. These filings will be available as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the SEC. Information contained on our website is not part of this prospectus supplement.
PROSPECTUS
$50,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Rights
Units
We may offer and sell, from time to time in one or more offerings,
up to $50,000,000.00 of our common stock, preferred stock, debt securities, warrants and rights, or any combination of these securities,
and/or units consisting of one or more of these securities. We may also offer common stock or preferred stock upon conversion of
debt securities and common stock upon conversion of preferred stock. All of the securities listed above may be sold separately
or as units with other securities.
This prospectus describes some of the general terms that may
apply to these securities. When we decide to sell a particular class or series of securities, we will provide specific terms of
the offered securities in one or more prospectus supplements. We may also authorize one or more free writing prospectuses to be
provided to you in connection with these offerings.
The prospectus supplement, and any documents incorporated by
reference, may also add, update or change information contained in or incorporated by reference into this prospectus. However,
no prospectus supplement shall offer a security that is not registered and described in this prospectus at the time of its effectiveness.
You should read this prospectus and any prospectus supplement, as well as the documents incorporated by reference or deemed to
be incorporated by reference into this prospectus, and any free writing prospectus carefully before you invest. This prospectus
may not be used to offer or sell our securities unless accompanied by a prospectus supplement relating to the offered securities.
Our common stock is listed on The Nasdaq Capital Market under
the symbol “APDN.” Each prospectus supplement will contain information, where applicable, as to our listing on any
securities exchange of the securities covered by the prospectus supplement. The aggregate market value of our outstanding common
stock held by non-affiliates was $47,216,546 based on 4,677,995 shares of outstanding common stock, of which 462,232 shares are
held by affiliates, and a price of $11.20 per share, which was the last reported sale price of our common stock as quoted on The
Nasdaq Capital Market on May 18, 2020. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities registered
in a public primary offering with a value exceeding more than one-third of our public float (the
market value of our common stock held by our non-affiliates) in any 12 calendar month period so long as our public float
remains below $75.0 million. We have not offered any securities pursuant to General Instruction I.B.6 of Form S-3 during the prior
12 calendar month period that ends on and includes the date of this prospectus. As of May 18, 2020, one-third of our public float
is equal to approximately $15.7 million.
These securities may be sold by us directly to purchasers, through
dealers or agents, or to or through underwriters, or through a combination of these methods. See “Plan of Distribution”
in this prospectus. We may also describe the plan of distribution for any particular offering of our securities in a prospectus
supplement. If any agents, underwriters or dealers are involved in the sale of any securities in respect of which this prospectus
is being delivered, we will disclose their names and the nature of our arrangements with them in a prospectus supplement. The net
proceeds we expect to receive from any such sale will also be included in a prospectus supplement.
An investment in our securities involves a high degree of
risk. See the sections entitled “Risk Factors” in our most recent Annual Report on Form 10-K, in any Quarterly Report
on Form 10-Q and in any Periodic Report on Form 8-K, as well as in any prospectus supplement or free writing prospectus related
to these specific offerings.
We may amend or supplement this prospectus from time to time
by filing amendments or supplements as required or related free writing prospectuses. You should read the entire prospectus and
any amendments or supplements carefully before you make your investment decision.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is May 21, 2020
ABOUT THIS PROSPECTUS
This prospectus is part of a Registration Statement that we
filed with the Securities and Exchange Commission (“SEC”) using a “shelf” registration process.
Under this shelf registration process, we may offer from time to time securities described in this prospectus having a maximum
aggregate offering price of $50,000,000.00 in one or more offerings. Each time we offer securities, we will prepare and file with
the SEC a prospectus supplement or information that is incorporated by reference into this prospectus that describes the specific
amounts, prices and terms of the securities we offer. We may also authorize one or more free writing prospectuses to be provided
to you that may contain material information relating to these offerings and securities. The prospectus supplement also may add,
update or change information contained in this prospectus or the documents incorporated herein by reference. You should read carefully
this prospectus, any applicable prospectus supplement and any related free writing prospectus together with additional information
described below under the caption “Where You Can Find More Information.”
This prospectus does not contain all the information provided
in the Registration Statement we filed with the SEC. For further information about us or our securities offered hereby, you should
refer to that Registration Statement, which you can obtain from the SEC as described below under “Where You Can Find More
Information.”
You should rely only on the information contained or incorporated
by reference in this prospectus, any prospectus supplement and any related free writing prospectus. We have not authorized any
other person to provide you with different information. If anyone provides you with different or inconsistent information, you
should not rely on it. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities,
in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus,
any prospectus supplement, any related free writing prospectus as well as information we have previously filed with the SEC and
incorporated by reference, is accurate as of the date of those documents only. Our business, financial condition, results of operations
and prospects may have changed since those dates. This prospectus incorporates by reference, and any prospectus
supplement or free writing prospectus may contain and incorporate by reference, market data and industry statistics and forecasts
that are based on independent industry publications and other publicly available information. Although we believe these sources
are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this
information. Although we are not aware of any misstatements regarding the market and industry data presented in this prospectus
and the documents incorporated herein by reference, these estimates involve risks and uncertainties and are subject to change based
on various factors, including those discussed under the heading “Risk Factors” contained in this prospectus, the applicable
prospectus supplement and any applicable free writing prospectus, and under similar headings in other documents that are incorporated
by reference into this prospectus. Accordingly, investors should not place undue reliance on this information.
We may sell securities through underwriters or dealers, through
agents, directly to purchasers or through any combination of these methods. We and our agents reserve the sole right to accept
or reject in whole or in part any proposed purchase of securities. The prospectus supplement, which we will prepare and file with
the SEC each time we offer securities, will set forth the names of any underwriters, agents or others involved in the sale of securities,
and any applicable fee, commission or discount arrangements with them. See “Plan of Distribution.”
In this prospectus, unless otherwise indicated, the “Registrant,”
“our company,” “we,” “us” or “our” refer to Applied
DNA Sciences, Inc., a Delaware corporation and its consolidated subsidiaries.
PROSPECTUS SUMMARY
This prospectus summary highlights certain information about
our company and other information contained elsewhere in this prospectus or in documents incorporated by reference. This summary
does not contain all of the information that you should consider before making an investment decision. You should carefully read
the entire prospectus, any prospectus supplement, including the section entitled “Risk Factors” and the documents incorporated
by reference into this prospectus, before making an investment decision.
THE OFFERING
This prospectus is part of a Registration Statement that we
filed with the SEC utilizing a shelf registration process. Under this shelf registration process, we may sell any combination of:
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common stock;
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preferred stock;
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debt securities, in one or more series;
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warrants to purchase any of the securities listed above;
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rights to purchase common stock, preferred stock or warrants; and/or
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units consisting of one or more of the foregoing
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in one or more offerings up to a total dollar amount of $50,000,000.00.
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will
provide a prospectus supplement that will contain specific information about the terms of that specific offering and include a
discussion of any risk factors or other special considerations that apply to those securities. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement
together with the additional information described under the heading “Where You Can Find More Information.”
OUR COMPANY
Overview
We develop and market DNA-based technology
solutions utilizing our LinearDNATM large-scale polymerase chain reaction (“PCR”) based manufacturing
platform. Our proprietary platform produces large quantities of DNA for use in the nucleic acid-based in vitro diagnostics
and preclinical nucleic-acid based drug development and manufacturing markets, and for supply chain security, anti-counterfeiting
and anti-theft applications. We are also developing our invasive circulating tumor cell capture and identification technology (“iCTC
Technology”) which uses a patented functional assay to capture live invasive circulating tumor cell and associated lymphocytes
that can be identified and expanded for further analysis. Our LinearDNATM PCR platform is capable of producing large
scale DNA.
We are currently engaged in the large scale
production of DNA via our LinearDNATM platform for two primary lines of services:
Biotherapeutic Contract Research and
Manufacturing
Our patented continuous flow PCR systems
and other proprietary PCR-based production technologies allow for the large-scale production of specific DNA sequences. We have
the ability to manufacture DNA sequences for use in nucleic acid-based therapeutics such as adoptive cell therapies (CAR T and
TCR therapies), DNA vaccines, RNA therapies, gene therapy and nucleic acid-based in vitro diagnostics.
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Contract Research: We provide preclinical contract research services for the preclinical
nucleic acid-based therapeutic markets. We work with biotech and pharmaceutical companies to adapt plasmid-based and/or viral transduction-based
preclinical biotherapeutics into PCR produced linear DNA-based forms that can be manufactured on our LinearDNATM platform.
In addition, we provide contract research services to RNA therapeutic biotechnology customers for preclinical studies. These services
include the design, development and manufacture of PCR-produced DNA templates for RNA therapeutic candidates.
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Nucleic Acid Therapeutic and Diagnostic Manufacturing: We use our LinearDNATM
platform to rapidly produce customized DNA for use by our customers engaged in preclinical nucleic acid-based drug development.
Through our proprietary technology we produce large quantities of DNA used in various nucleic acid-based drug candidates including
adoptive cell therapies, vaccines (including anti-viral and cancer), gene therapies, RNA-based therapies, clustered regularly interspaced
short palindromic repeats (CRISPR) based therapies and other nucleic acid-based therapies.
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Nucleic Acid Diagnostic Kit Manufacturing: On May 13, 2020 the U.S. Food and Drug Administration
(“FDA”) authorized the emergency use of our patent-pending Linea TM COVID-19 Assay Kit (the “Diagnostic
Kit”), subject to the terms of FDA’s Emergency Use Authorization (“EUA”). Consistent with and
subject to the terms of the EUA, the Diagnostic Kit (with authorized labeling) may be distributed to and used by authorized laboratories,
certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity tests to detect SARS-CoV-2,
the virus responsible for the current COVID (coronavirus) pandemic. There is no guarantee that our collaborators or customers will
purchase or use the Diagnostic Kit, that any sales of Diagnostic Kits by us will generate any revenue or profits, or that we will
ever be successful in obtaining regulatory clearance or approval for any product that incorporates our products or technology.
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Non-Biological Tagging and Related Services
Our supply chain security business allows
our customers to use non-biologic DNA (molecular) tags, produced via our LinearDNATM platform, to mark objects, and
then identify these objects by detecting the absence or presence of the molecular tag. Our core products include:
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SigNature® Molecular Tags produced by our LinearDNATM platform, provide an approach
to authenticate goods within large and complex supply chains for materials such as cotton, and leather, in-home textiles and apparel,
pharmaceuticals and nutraceuticals, cannabis and other products.
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SigNify® IF portable DNA readers and SigNify consumable reagent test kits provide definitive
real-time authentication of molecular tags in the field, providing a front-line solution for supply chain integrity backed with
forensic-level molecular tag authentication. Our software platform enables customers to track materials throughout a supply chain
or product life.
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CertainT® trademark indicates the use of our tagging, testing and tracking platforms and solutions,
enabling manufacturers, brands and trade organizations to convey proof of their product claims.
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iCTC Technology
We recently acquired technology that uses
a patented functional assay to capture live invasive circulating tumor cell and associated lymphocytes. Currently, our iCTC Technology
is being used in a human cancer drug candidate clinical trial. We seek to further develop and commercialize this technology and
to potentially integrate aspects of the iCTC technology with the LinearDNATM platform for cancer research and nucleic-acid
based drug development.
Corporate History
We are a Delaware corporation, which was initially formed in
1983 under the laws of the State of Florida as Datalink Systems, Inc. In 1998, we reincorporated in the State of Nevada, and in
2002, we changed our name to our current name, Applied DNA Sciences, Inc. In December 2008, we reincorporated from Nevada to the
State of Delaware. Our subsidiary, LineaRx, Inc. was incorporated in Delaware on September 11, 2018.
Our corporate headquarters are located at the Long Island High
Technology Incubator at Stony Brook University in Stony Brook, New York, where we established laboratories for the manufacture
of molecular tags, product prototyping, molecular tag authentication and bulk DNA production. The address of our corporate headquarters
is 50 Health Sciences Drive, Stony Brook, New York 11790, and our telephone number is (631) 240-8800. We maintain a website at
www.adnas.com where general information about us is available. The information on, or that may be accessed through, our website
is not incorporated by reference into and should not be considered a part of this registration statement.
To date, we have had a limited operating history with our current
business model, and as a result, our operations have produced limited revenues.
RISK FACTORS
Investing in our securities involves a high degree of risk.
Prior to making a decision about investing in our securities, you should carefully consider and evaluate the specific factors discussed
under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed
on December 12, 2019, with the SEC, as amended, and any updates described in subsequent Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Periodic Reports on Form 8-K, all of which are incorporated herein by reference, and may be amended, supplemented
or superseded from time to time by other reports we file with the SEC in the future. The risks and uncertainties we have described
are not the only risks that we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial
may also affect our operations. The occurrence of these known or unknown risks might cause you to lose all or part of your investment.
See also the statements contained under the heading “Forward-Looking
Statements.”
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference
herein contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are intended to qualify for the
“safe harbor” created by those sections. In addition, we may make forward-looking statements in other documents filed
with or furnished to the SEC, and our management and other representatives may make forward-looking statements orally or in writing
to analysts, investors, representatives of the media and others. Forward-looking statements can generally be identified by the
fact that they do not relate strictly to historical or current facts and include, but are not limited to, statements using terminology
such as “can”, “may”, “could”, “should”, “assume”, “forecasts”,
“believe”, “designated to”, “will”, “expect”, “plan”, “anticipate”,
“estimate”, “potential”, “position”, “predicts”, “strategy”, “guidance”,
“intend”, “budget”, “seek”, “project” or “continue”, or the negative
thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future, including risks
relating to the recent outbreak of the coronavirus (COVID-19). You should read statements that contain these words carefully because
they:
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discuss our future expectations;
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contain projections of our future results of operations or of our financial condition; and
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state other “forward-looking” information.
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We believe it is important to communicate our expectations.
However, forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business
and our industry and are subject to known and unknown risks, uncertainties and other factors. Accordingly, our actual results and
the timing of certain events may differ materially from those expressed or implied in such forward-looking statements due to a
variety of factors and risks, including, but not limited to, those set forth under “Risk Factors” and “Our Company”
set forth in this prospectus and the documents incorporated herein by reference., and the following factors and risks:
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Adverse impact of COVID-19 pandemic on our business, financial operations and results of operations due to, reduction in scope
of operations;
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our lack of significant revenues;
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our operating and financial performance and prospects;
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our quarterly or annual earnings or those of other companies in our industry or those that investors deem comparable to us;
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our limited experience in commercializing, marketing, and distributing our products including our large-scale PCR based manufacturing
platform;
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our history of net losses, which may continue, and our potential inability to achieve profitability;
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our difficulty in obtaining or inability to obtain, additional financing if such financing becomes necessary;
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public reactions to our press releases, other public announcements and filings with the SEC;
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changes in financial estimates or recommendations by securities analysts, or their ceasing to publish research or reports about
our business;
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the possibility we may fail to make timely payment on our secured convertible notes and as a result, the noteholder enforcing
its remedies and ultimately realizing on its collateral which includes substantially all of our assets, including our intellectual
property;
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the appeal and current level of investor interest in the biotechnology/biopharmaceutical capital market sector and in companies
in general with business, research strategies and product development pipelines which are similar to us;
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our commercial opportunities in pharmaceuticals and biologics may be limited;
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our dependence on a limited number of key customers;
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lack of acceptance of our products and services by potential customers and potential failure to introduce new products and
services;
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loss of strategic relationships, including with suppliers;
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expenses or losses associated with lack of widespread market acceptance of our solutions;
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difficulty or failure in expanding and/or maintaining our sales, marketing and support organizations and our distribution arrangements
necessary to enable us to reach our goals with respect to increasing market acceptance of our products and services;
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inability to attract and retain qualified scientific, production and managerial personnel, including Dr. James A. Hayward,
our Chairman, Chief Executive Officer and President;
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conflicts of interest with affiliates and related parties with whom we have engaged or entered into transactions;
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competition from products and services provided by other companies, including competition in the principal markets for our
drug and biologic candidates and linear DNA;
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seasonality in revenues related to our cotton customer contracts;
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fluctuations in quarterly results due to adverse changes in worldwide or domestic economic, political or business conditions;
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inability to obtain and maintain regulatory approval in the pharmaceutical and biologic markets;
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inability of our collaborators, licensees, and customers to develop, obtain approval for and successfully commercialize products
that incorporate our technology;
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inability of us, our collaborators or customers to develop and timely manufacture complex biologic products and their components
to exacting quality and safety standards;
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dependence on our collaborators’ and customers’ demand for our manufacturing services;
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inability to compete effectively in the industries in which we operate;
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lack of success in our research and development efforts for new products;
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inability to license new technologies;
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failure to manage our growth in operations and acquisitions of new technologies and businesses;
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various uncertainties and risks should we or our competitors explore or engage in future business combinations or other transactions;
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economic, political, regulatory, legal, operational, and other risks as a result of our international operations;
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inability to attract qualified scientific, production and managerial personnel;
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inability to protect our intellectual property rights;
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intellectual property litigation against us or other legal actions or proceedings in which we may become involved;
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accidents related to our use of hazardous materials;
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potential product liability claims;
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litigation brought by customers, former employees, officers and directors, former distributors and sales representatives, former
consultants and vendors and service providers;
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business disruption due to natural or manmade disaster or other business interruptions;
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general weakening or decline in the global economy or a period of economic slowdown;
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unauthorized disclosure of sensitive or confidential data (including customer data) and cybersecurity breaches;
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the effective increase in the number of shares of our common stock, par value $.001 per share (“Common Stock”)
available for issuance as a result of our November 2019 reverse stock split could result in further dilution to our existing stockholders
and have anti-takeover implications;
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failure to maintain the listing on, or the delisting of our securities from, The Nasdaq Capital Market;
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unpredictability of regulatory approval as it relates to our product candidates;
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potential difficulties and failures in clinically developing and manufacturing our products, or causation of undesirable side
effects;
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variance in regulatory approval across jurisdictions;
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regulatory scrutiny of our products;
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healthcare legislative measures;
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noncompliance with regulatory standards and requirements;
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noncompliance with healthcare legislation;
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noncompliance with laws or regulatory standards by our suppliers;
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sales of Common Stock by us, our directors, officers or large stockholders;
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the large number of shares of Common Stock underlying outstanding options and warrants and potential repurchase requirements
of certain warrants;
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the possibility that we may require additional financing, which may involve the issuance of additional shares of Common Stock
or securities exercisable for Common Stock and dilute the percentage of ownership held by our current stockholders;
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changes in our capital structure;
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dilution to our stockholders due to conversion of our convertible notes into Common Stock;
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the occurrence of any potential material weakness in internal controls over financial reporting;
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changes in accounting standards, policies, guidance, interpretations or principles;
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future short selling and/or manipulation of the price of our Common Stock; and
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volatility in the price and/or trading volume of our Common Stock, or other securities we may issue from time to time.
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All forward-looking statements and risk factors included in
this prospectus are made as of the date hereof, and all forward-looking statements and risk factors included in documents incorporated
herein by reference are made as of their original date, in each case based on information available to us as of the date hereof,
or in the case of documents incorporated by reference, the original date of any such document, and we assume no obligations to
update any forward-looking statement or risk factor, unless we are required to do so by law. If we do update one or more forward-looking
statements, no inference should be drawn that we will make updates with respect to other forward-looking statements or that we
will make any further updates to those forward-looking statements at any future time.
Forward-looking statements may include our plans and objectives
for future operations, including plans and objectives relating to our products and our future economic performance, projections,
business strategy and timing and likelihood of success. Assumptions relating to the foregoing involve judgments with respect to,
among other things, future economic, competitive and market conditions, future business decisions, and the time and money required
to successfully complete development and commercialization of our technologies, all of which are difficult or impossible to predict
accurately and many of which are beyond our control.
Any of the assumptions underlying the forward-looking statements
contained in this prospectus could prove inaccurate and, therefore, we cannot assure you that any of the results or events contemplated
in any of such forward-looking statements will be realized. Based on the significant uncertainties inherent in these forward-looking
statements, the inclusion of any such statement should not be regarded as a representation or as a guarantee by us that our objectives
or plans will be achieved, and we caution you against relying on any of the forward looking-statements contained herein.
Our trademarks currently used in the United States include Applied
DNA Sciences®, SigNature® molecular tags, SigNature® T molecular tags, fiberTyping®, DNAnet®, SigNify®,
Beacon®, CertainT® and LinearDNATM. We do not intend our use or display of other companies’ trade names
or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. All trademarks, service
marks and trade names included or incorporated by reference in this prospectus are the property of the respective owners.
USE OF PROCEEDS
Except as otherwise provided in the applicable prospectus supplement,
we intend to use the net proceeds from the sale of the securities covered by this prospectus for general corporate purposes, which
may include, but is not limited to, working capital, capital expenditures, business development and research and development expenditures
and acquisitions of new technologies or businesses. The precise amount, use and timing of the application of such proceeds will
depend upon our funding requirements and the availability and cost of other capital. Additional information on the use of net proceeds
from an offering of securities covered by this prospectus may be set forth in the prospectus supplement relating to the specific
offering.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common
stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination
to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results
of operations, capital requirements, and such other factors as our board of directors deem relevant.
DESCRIPTIONS OF THE SECURITIES WE MAY
OFFER
The descriptions of the securities contained in this prospectus,
together with any applicable prospectus supplement, summarize all the material terms and provisions of the various types of securities
that we may offer. We will describe in the applicable prospectus supplement relating to a particular offering the specific terms
of the securities offered by that prospectus supplement. We will indicate in the applicable prospectus supplement if the terms
of the securities differ from the terms we have summarized below. We will also include in the prospectus supplement information,
where applicable, regarding material United States federal income tax considerations relating to the securities.
We may sell from time to time, in one or more offerings:
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shares of our common stock;
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shares of our preferred stock;
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debt securities;
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warrants to purchase any of the securities listed above;
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rights to purchase common stock, preferred stock or warrants; and/or
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units consisting of one or more of the foregoing.
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This prospectus may not be used to consummate a sale of securities
unless it is accompanied by a prospectus supplement.
Capital Stock
General
The following description of common stock and preferred stock,
together with the additional information we include in any applicable prospectus supplement, summarizes the material terms and
provisions of the common stock and preferred stock that we may offer under this prospectus but is not complete. For the complete
terms of our common stock and preferred stock, please refer to our certificate of incorporation, as may be amended from time to
time (the “Certificate of Incorporation”), any certificates of designation for our preferred stock, that may
be authorized from time to time, and our by-laws, as amended from time to time. The Delaware General Corporation Law (“DGCL”)
may also affect the terms of these securities. While the terms we have summarized below will apply generally to any future common
stock or preferred stock that we may offer, we will describe the specific terms of any series of these securities in more detail
in the applicable prospectus supplement. If we so indicate in a prospectus supplement, the terms of any common stock or preferred
stock we offer under that prospectus supplement may differ from the terms we describe below.
As of May 18, 2020, our authorized capital stock consists of
500,000,000 shares of common stock, par value $0.001 per share, of which 4,677,995 shares were issued and outstanding, and 10,000,000
shares of preferred stock, par value $0.001 per share, of which no shares were issued and outstanding. The actual number of stockholders
is greater than the number of stockholders of record and includes stockholders who are beneficial owners but whose shares are held
in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares
may be held in trust by other entities. In addition, as of May 18, 2020, there were issued and outstanding options to purchase
234,015 shares of our common stock, warrants to purchase 1,503,703 shares of our common stock, 70,963 shares of our common stock
issuable upon conversion of secured convertible notes and 117,915 shares available for grant under our 2005 Incentive Stock Plan,
as amended and restated as of January 21, 2015, and as further amended on May 16, 2019. The authorized and unissued shares of common
stock and preferred stock are available for issuance without further action by our stockholders, unless such action is required
by applicable law or the rules of any stock exchange on which our securities may be listed. Unless approval of our stockholders
is so required, our board of directors will not seek stockholder approval for the issuance and sale of our common stock.
Common Stock
Holders of our common stock are entitled
to one vote for each share issued and outstanding held on all matters to be voted upon by the stockholders. Our shares of common
stock have no preemptive, conversion, or redemption rights. The rights, preferences, and privileges of the holders of common stock
are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock we may issue
in the future. Upon the sale of substantially all of our stock or assets or dissolution, liquidation or winding up, and after all
liquidation preferences payable to any series of preferred stock entitled thereto have been satisfied, our remaining assets shall
be distributed to all holders of common stock and any similarly situated stockholders who are not entitled to any liquidation preference
or, if there be an insufficient amount to pay all such stockholders, then ratably among such holders. All of our issued and outstanding
shares of common stock are fully paid and non-assessable. The holders of shares of our common stock will be entitled to such dividends
and other distributions in cash, stock or property from our assets or funds legally available for such purposes as may be declared
from time to time by our board of directors.
Our common stock is listed on The Nasdaq
Capital Market under the symbol “APDN.” American Stock Transfer & Trust Company is the transfer agent and registrar
for our common stock.
Preferred Stock
Our Certificate of Incorporation provides
that our board of directors may, by resolution, designate classes of preferred stock in the future. The designated series of preferred
stock shall have such powers, designations, preferences and relative, participation or optional or other special rights and qualifications,
limitations or restrictions as shall be expressed in the resolution adopted by the board of directors. Once designated by our board
of directors, each series of preferred stock will have specific financial and other terms described in the documents that govern
the preferred stock, which include our Certificate of Incorporation and any certificates of designation that our board of directors
may adopt. Prior to the issuance of shares of each series of preferred stock, the board of directors is required by the DGCL and
our Certificate of Incorporation to adopt resolutions and file a certificate of designation with the Secretary of State of the
State of Delaware. The certificate of designation fixes for each class or series the designations, powers, preferences, rights,
qualifications, limitations and restrictions, including, but not limited to, some or all of the following:
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the number of shares constituting that series and the distinctive designation of that series, which number may be increased or decreased (but not below the number of shares then outstanding) from time to time by action of the board of directors;
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the dividend rate and the manner and frequency of payment of dividends on the shares of that series, whether dividends will be cumulative, and, if so, from which date;
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whether that series will have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights;
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whether that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the board of directors may determine;
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whether or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption;
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whether that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;
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whether or not the shares of the series will have priority over or be on a parity with or be junior to the shares of any other series or class in any respect;
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the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights or priority, if any, of payment of shares of that series; and
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any other relative rights, preferences and limitations of that series.
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Although our board of directors has no intention
at the present time of doing so, it could authorize the issuance of a series of preferred stock that could, depending on the terms
of such series, impede the completion of a merger, tender offer or other takeover attempt.
Possible Anti-Takeover Effects of Delaware Law and our Certificate
of Incorporation and By-Laws
Our Certificate of Incorporation and By-Laws
contain provisions that could make it more difficult to acquire control of our company by means of a tender offer, open market
purchases, a proxy contest or otherwise. A description of these provisions is set forth below.
Anti-Takeover Effects of Delaware Law
Companies incorporated in Delaware are subject
to the provisions of Section 203 of the DGCL unless the corporation has “opted out” of these provisions with an express
provision in its original certificate of incorporation or an express provision in its certificate of incorporation or by-laws resulting
from a stockholders’ amendment approved by at least a majority of the outstanding voting shares. We have opted out of Section
203 with an express provision in our Certificate of Incorporation. Therefore, the anti-takeover effects of Section 203 do not apply
to us.
Generally, Section 203 prohibits a publicly-held
Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year
period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved
in a prescribed manner. A “business combination” includes, among other things, a merger, asset or stock sale or other
transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person
who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder
status, 15% or more of the corporation’s voting stock.
Election and Removal of Directors
Directors will be elected by a plurality
of the voting power of the shares present in person or represented by proxy at the stockholders meeting and entitled to vote on
the election of directors. Our Certificate of Incorporation does not provide for a classified board of directors or for cumulative
voting in the election of directors. Under Article VIII of the Certificate of Incorporation and Section 3.13 of the By-Laws, directors
may be removed by the stockholders of our company only for cause, and in such case only by the affirmative vote of the holders
of at least a majority of the voting power of the issued and outstanding shares of capital stock of our company then entitled to
vote in the election of directors. On December 21, 2015, the Court of Chancery of the State of Delaware invalidated as a matter
of law certain provisions of the certificate of incorporation and bylaws of VAALCO Energy, Inc. (“VAALCO”),
a Delaware corporation, that permitted the removal of VAALCO’s directors by its stockholders only for cause. In In re
VAALCO Energy, Inc. Stockholder Litigation, Consol. C.A. No. 11775-VCL (Del. Ch. Dec. 21, 2015), the Court ruled from the bench
to hold that, in the absence of a classified board of directors or cumulative voting, VAALCO’s “only for-cause”
director removal provisions conflict with Section 141(k) of the DGCL and are therefore invalid. Because our Certificate of Incorporation
and By-Laws contain similar “only for-cause” director removal provisions and our company does not have a classified
board of directors or cumulative voting, our company will not attempt to enforce the foregoing “only for-cause” director
removal provision in light of the VAALCO decision.
Size of Board of Directors and Vacancies
The authorized number of directors may be
determined by the board of directors, provided the board shall consist of at least one (1) member. No decrease in the number of
directors constituting the board of directors shall shorten the term of any incumbent director.
Vacancies occurring on our board of directors
for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled only
by a vote of a majority of the remaining members of the board of directors, although less than a quorum, or by a sole remaining
director, at any meeting of the board of directors.
Amendment
The Certificate of Incorporation may be
amended by approval of the board of directors and vote of a majority of the outstanding stock entitled to vote (and vote of a majority
of the outstanding stock of each class entitled to vote as a class, if applicable) pursuant to the Sections 141 and 242 of the
DGCL. The board of directors is authorized to adopt, amend, alter or repeal the By-Laws by the affirmative vote of at least a majority
of the board of directors then in office. No amendment to the Certificate of Incorporation or the By-Laws may adversely affect
any indemnification right or protection of any director, officer, employee or other agent existing at the time of such amendment,
repeal or adoption of an inconsistent provision for or in respect of any act, omission or other matter occurring, or any action
or proceeding accruing or arising prior to such amendment, repeal or adoption of an inconsistent provision.
Authorized but Unissued Shares of Common Stock and of Preferred
Stock
We believe that the availability of the
“Blank Check” preferred stock under our Certificate of Incorporation provides us with flexibility in addressing corporate
issues that may arise. The board of directors has the power, subject to applicable law, to issue series of preferred stock that
could, depending on the terms of the series, impede the completion of a merger, tender offer or other takeover attempt that some,
or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium
for their stock over the then prevailing market price of the stock. Our board of directors may issue preferred stock with voting
rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of common stock.
The authorized shares of preferred stock,
as well as shares of common stock, will be available for issuance without further action by our stockholders, unless action is
required by applicable law or the rules of any stock exchange on which our securities may be listed. Having these authorized shares
available for issuance allows us to issue shares without the expense and delay of a special stockholders’ meeting. We may
use additional shares for a variety of purposes, including future public or private offerings to raise additional capital, to fund
acquisitions and as employee compensation. The existence of authorized but unissued shares of common stock and preferred stock
could render more difficult or discourage an attempt to obtain control of our company by means of a proxy contest, tender offer,
merger or otherwise. The above provisions may deter a hostile takeover or delay a change in control or management of our company.
Advance Notice Procedure
Our By-Laws provide an advance notice procedure
for stockholders to nominate director candidates for election or to bring business before an annual meeting of stockholders. Only
persons nominated by, or at the direction of, our board of directors or by a stockholder of record who has given proper and timely
notice to our secretary prior to the meeting at which such stockholder is entitled to vote and appears, will be eligible for election
as a director. In addition, any proposed business other than the nomination of persons for election to our board of directors must
constitute a proper matter for stockholder action pursuant to a proper notice of meeting delivered to us. For notice to be timely,
it must generally be delivered to our secretary not less than 90 nor more than 120 calendar days prior to the first anniversary
of the previous year’s annual meeting (or if the date of the annual meeting is more than 30 calendar days before or more
than 60 calendar days after the anniversary date of the previous year’s annual meeting, not earlier than the 120th calendar
day prior to such meeting and not later than either the 90th calendar day prior to such meeting or the 10th calendar day after
public disclosure of the date of such meeting is first made by us). These advance notice provisions may have the effect of precluding
the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquirer
from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempt to obtain control of us.
Special Meetings of Stockholders
Our By-Laws provide that special meetings
of stockholders may be called only by the Chairman of the Board, the Chief Executive Officer, or the board of directors pursuant
to a resolution adopted by a majority of the board of directors.
Warrants
The following description, together with the additional information
we may include in any applicable prospectus supplement or free writing prospectus, summarizes the material terms and provisions
of the warrants that we may offer under this prospectus and any related warrant agreement and warrant certificate. While the terms
summarized below will apply generally to any warrants that we may offer, we will describe the specific terms of any series of warrants
in more detail in the applicable prospectus supplement. If we indicate in the prospectus supplement, the terms of any warrants
offered under that prospectus supplement may differ from the terms described below. Specific warrant agreements will contain additional
important terms and provisions and will be incorporated by reference as an exhibit to the Registration Statement which includes
this prospectus.
General
We may issue warrants for the purchase of common stock, preferred
stock and/or debt securities in one or more series. We may issue warrants independently or together with common stock, preferred
stock and/or debt securities, and the warrants may be attached to or separate from these securities.
We will evidence each series of warrants by warrant certificates
that we may issue under a separate agreement. We may enter into a warrant agreement with a warrant agent. Each warrant agent may
be a bank or trust company that we select which has its principal office in the United States. We may also choose to act as our
own warrant agent. We will indicate the name and address of any such warrant agent in the applicable prospectus supplement relating
to a particular series of warrants.
We will describe in the applicable prospectus supplement the
terms of the series of warrants, including:
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the offering price and aggregate number of warrants offered;
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
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if applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise;
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in the case of warrants to purchase common stock or preferred stock, the number or amount of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which and currency in which these shares may be purchased upon such exercise;
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the manner of exercise of the warrants, including any cashless exercise rights;
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the warrant agreement under which the warrants will be issued;
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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anti-dilution provisions of the warrants, if any;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the dates on which the right to exercise the warrants will commence and expire or, if the warrants are not continuously exercisable during that period, the specific date or dates on which the warrants will be exercisable;
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the manner in which the warrant agreement and warrants may be modified;
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the identities of the warrant agent and any calculation or other agent for the warrants;
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federal income tax consequences of holding or exercising the warrants;
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the terms of the securities issuable upon exercise of the warrants;
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any securities exchange or quotation system on which the warrants or any securities deliverable upon exercise of the warrants may be listed or quoted; and
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any other specific terms, preferences, rights or limitations of or restrictions on the warrants.
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Before exercising their warrants, holders of warrants will not
have any of the rights of holders of the securities purchasable upon such exercise, including:
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in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or
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in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any.
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Exercise of Warrants
Each warrant will entitle the holder to purchase the securities
that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement.
Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time
up to 5:00 P.M. eastern time on the expiration date that we set forth in the applicable prospectus supplement. After the close
of business on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering
the warrant certificate representing the warrants to be exercised together with specified information, and paying the required
exercise price by the methods provided in the applicable prospectus supplement. We will set forth on the reverse side of the warrant
certificate, and in the applicable prospectus supplement, the information that the holder of the warrant will be required to deliver
to the warrant agent.
Upon receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable
prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants
represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of
warrants.
Enforceability of Rights by Holders of Warrants
Any warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant. A single
bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility
in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate
any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related
warrant agent or the holder of any other warrant, enforce by appropriate legal action the holder’s right to exercise, and
receive the securities purchasable upon exercise of, its warrants in accordance with their terms.
Warrant Agreement Will Not Be Qualified Under Trust Indenture
Act
No warrant agreement will be qualified as an indenture, and
no warrant agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore, holders of warrants issued
under a warrant agreement will not have the protection of the Trust Indenture Act with respect to their warrants.
Governing Law
Each warrant agreement and any warrants issued under the warrant
agreements will be governed by New York law.
Calculation Agent
Any calculations relating to warrants may be made by a calculation
agent, an institution that we appoint as our agent for this purpose. The prospectus supplement for a particular warrant will name
the institution that we have appointed to act as the calculation agent for that warrant as of the original issue date for that
warrant, if any. We may appoint a different institution to serve as calculation agent from time to time after the original issue
date without the consent or notification of the holders. The calculation agent’s determination of any amount of money payable
or securities deliverable with respect to a warrant will be final and binding in the absence of manifest error.
Outstanding Warrants
As of May 18, 2020, we had outstanding 1,503,703 warrants to
purchase 1,503,703 shares of our common stock at a weighted average exercise price of $9.11. Our Warrant Agent for registered warrants
is American Stock Transfer & Trust Company.
Debt Securities
The following description, together with the additional information
we include in any applicable prospectus supplement or free writing prospectus, summarizes certain general terms and provisions
of the debt securities that we may offer under this prospectus. When we offer to sell a particular series of debt securities, we
will describe the specific terms of the series in a supplement to this prospectus. We will also indicate in the supplement to what
extent the general terms and provisions described in this prospectus apply to a particular series of debt securities. To the extent
the information contained in the prospectus supplement differs from this summary description, you should rely on the information
in the prospectus supplement.
We may issue debt securities either separately, or together
with, or upon the conversion or exercise of or in exchange for, other securities described in this prospectus. Debt securities
may be our senior, senior subordinated or subordinated obligations and, unless otherwise specified in a supplement to this prospectus,
the debt securities will be our direct, unsecured obligations and may be issued in one or more series.
The debt securities will be issued under an indenture between
us and a trustee named in the prospectus supplement. We have summarized select portions of the indenture below. The summary is
not complete. The form of the indenture has been filed as an exhibit to the registration statement and you should read the indenture
for provisions that may be important to you. In the summary below, we have included references to the section numbers of the indenture
so that you can easily locate these provisions. Capitalized terms used in the summary and not defined herein have the meanings
specified in the indenture.
General
The terms of each series of debt securities will be established
by or pursuant to a resolution of our board of directors and set forth or determined in the manner provided in a resolution of
our board of directors, in an officer’s certificate or by a supplemental indenture. (Section 2.2) The particular terms of
each series of debt securities will be described in a prospectus supplement relating to such series (including any pricing supplement
or term sheet).
We can issue an unlimited amount of debt securities under the
indenture that may be in one or more series with the same or various maturities, at par, at a premium, or at a discount. (Section
2.1) We will set forth in a prospectus supplement (including any pricing supplement or term sheet) relating to any series of debt
securities being offered, the aggregate principal amount and the following terms of the debt securities, if applicable:
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the title and ranking of the debt securities (including the terms of any subordination provisions);
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the price or prices (expressed as a percentage of the principal amount) at which we will sell the debt securities;
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any limit on the aggregate principal amount of the debt securities;
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the date or dates on which the principal of a particular series of debt securities is payable;
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the rate or rates (which may be fixed or variable) per annum or the method used to determine the rate or rates (including any commodity, commodity index, stock exchange index or financial index) at which the debt securities will bear interest, the date or dates from which interest will accrue, the date or dates on which interest will commence and be payable and any regular record date for the interest payable on any interest payment date;
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the place or places where principal of, and interest, if any, on the debt securities will be payable (and the method of such payment), where the debt securities of such series may be surrendered for registration of transfer or exchange, and where notices and demands to us in respect of the debt securities may be delivered;
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the period or periods within which, the price or prices at which and the terms and conditions upon which we may redeem the debt securities;
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any obligation we have to redeem or purchase the debt securities pursuant to any sinking fund or analogous provisions or at the option of a holder of debt securities and the period or periods within which, the price or prices at which and the terms and conditions upon which the debt securities of a particular series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
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the dates on which and the price or prices at which we will repurchase debt securities at the option of the holders of debt securities and other detailed terms and provisions of these repurchase obligations;
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the denominations in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof;
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whether the debt securities will be issued in the form of certificated debt securities or global debt securities;
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the portion of principal amount of the debt securities payable upon declaration of acceleration of the maturity date, if other than the principal amount;
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the currency of denomination of the debt securities, which may be U.S. dollars or any foreign currency, and if such currency of denomination is a composite currency, the agency or organization, if any, responsible for overseeing such composite currency;
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the designation of the currency, currencies or currency units in which payment of principal of, and premium and interest on, the debt securities will be made;
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if payments of principal of, or premium or interest on, the debt securities will be made in one or more currencies or currency units other than that or those in which the debt securities are denominated, the manner in which the exchange rate with respect to these payments will be determined;
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the manner in which the amounts of payment of principal of, and premium, if any, and interest on, the debt securities will be determined, if these amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity index, stock exchange index or financial index;
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any provisions relating to any security provided for the debt securities;
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any addition to, deletion of or change in the Events of Default described in this prospectus or in the indenture with respect to the debt securities and any change in the acceleration provisions described in this prospectus or in the indenture with respect to the debt securities;
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any addition to, deletion of or change in the covenants described in this prospectus or in the indenture with respect to the debt securities;
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any depositaries, interest rate calculation agents, exchange rate calculation agents or other agents with respect to the debt securities;
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the provisions, if any, relating to conversion or exchange of any debt securities of such series, including if applicable, the conversion or exchange price and period, provisions as to whether conversion or exchange will be mandatory, the events requiring an adjustment of the conversion or exchange price and provisions affecting conversion or exchange;
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any other terms of the debt securities, which may supplement, modify or delete any provision of the indenture as it applies to that series, including any terms that may be required under applicable law or regulations or advisable in connection with the marketing of the securities; and
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whether any of our direct or indirect subsidiaries will guarantee the debt securities of that series, including the terms of subordination, if any, of such guarantees. (Section 2.2)
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We may issue debt securities that provide for an amount less
than their stated principal amount to be due and payable upon declaration of acceleration of their maturity pursuant to the terms
of the indenture. We will provide you with information on the federal income tax considerations and other special considerations
applicable to any of these debt securities in the applicable prospectus supplement.
If we denominate the purchase price of any of the debt securities
in a foreign currency or currencies or a foreign currency unit or units, or if the principal of, and premium, if any, and interest
on, any series of debt securities is payable in a foreign currency or currencies or a foreign currency unit or units, we will provide
you with information on the restrictions, elections, general tax considerations, specific terms and other information with respect
to that issue of debt securities and such foreign currency or currencies or foreign currency unit or units in the applicable prospectus
supplement.
Transfer and Exchange
Each debt security will be represented by either one or more
global securities registered in the name of The Depository Trust Company (“DTC” or the “Depositary”)
or a nominee of the Depositary (we will refer to any debt security represented by a global debt security as a “book-entry
debt security”), or a certificate issued in definitive registered form (we will refer to any debt security represented by
a certificated security as a “certificated debt security”) as set forth in the applicable prospectus supplement. Except
as set forth under the heading “Global Debt Securities and Book-Entry System” below, book-entry debt securities will
not be issuable in certificated form.
Certificated Debt Securities. You may transfer or exchange
certificated debt securities at any office we maintain for this purpose in accordance with the terms of the indenture. (Section
2.4) No service charge will be made for any transfer or exchange of certificated debt securities, but we may require payment of
a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange. (Section 2.7)
You may effect the transfer of certificated debt securities
and the right to receive the principal of, premium and interest on certificated debt securities only by surrendering the certificate
representing those certificated debt securities and either reissuance by us or the trustee of the certificate to the new holder
or the issuance by us or the trustee of a new certificate to the new holder.
Global Debt Securities and Book-Entry System. Each global
debt security representing book-entry debt securities will be deposited with, or on behalf of, the Depositary, and registered in
the name of the Depositary or a nominee of the Depositary. Please see the section entitled “Global Securities” for
more information.
Covenants
We will set forth in the applicable prospectus supplement any
restrictive covenants applicable to any issue of debt securities. (Article IV)
No Protection in the Event of a Change of Control
Unless we state otherwise in the applicable prospectus supplement,
the debt securities will not contain any provisions that may afford holders of the debt securities protection in the event we have
a change in control or in the event of a highly leveraged transaction (whether or not such transaction results in a change in control)
which could adversely affect holders of debt securities.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all of our properties and assets to, any person (a “successor person”)
unless:
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we are the surviving corporation or the successor person (if other than our company) is a corporation organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes our obligations on the debt securities and under the indenture;
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immediately after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing; and
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certain other conditions are met.
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Notwithstanding the above, any of our subsidiaries may consolidate
with, merge into or transfer all or part of its properties to us. (Section 5.1)
Events of Default
“Event of Default” means with respect to any series
of debt securities, any of the following:
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default in the payment of any interest upon any debt security of that series when it becomes due and payable, and continuance of such default for a period of 30 days (unless the entire amount of the payment is deposited by us with the trustee or with a paying agent prior to the expiration of the 30-day period);
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default in the payment of principal of any debt security of that series at its maturity;
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default in the performance or breach of any other covenant or warranty by us in the indenture or any debt security (other than a covenant or warranty that has been included in the indenture solely for the benefit of a series of debt securities other than that series), which default continues uncured for a period of 60 days after we receive written notice from the trustee or our company and the trustee receive written notice from the holders of not less than 25% in principal amount of the outstanding debt securities of that series as provided in the indenture;
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certain voluntary or involuntary events of bankruptcy, insolvency or reorganization of our company; or
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any other Event of Default provided with respect to debt securities of that series that is described in the applicable prospectus supplement. (Section 6.1)
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No Event of Default with respect to a particular series of debt
securities (except as to certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an Event of Default
with respect to any other series of debt securities. (Section 6.1) The occurrence of certain Events of Default or an acceleration
under the indenture may constitute an event of default under certain indebtedness of ours or our subsidiaries outstanding from
time to time.
We will provide the trustee written notice of any Default or
Event of Default within 30 days of becoming aware of the occurrence of such Default or Event of Default, which notice will describe
in reasonable detail the status of such Default or Event of Default and what action we are taking or propose to take in respect
thereof. (Section 6.1)
If an Event of Default with respect to debt securities of any
series at the time outstanding occurs and is continuing, then the trustee or the holders of not less than 25% in principal amount
of the outstanding debt securities of that series may, by a notice in writing to us (and to the trustee if given by the holders),
declare to be due and payable immediately the principal of (or, if the debt securities of that series are discount securities,
that portion of the principal amount as may be specified in the terms of that series) and accrued and unpaid interest, if any,
on all debt securities of that series. In the case of an Event of Default resulting from certain events of bankruptcy, insolvency
or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding debt
securities will become and be immediately due and payable without any declaration or other act on the part of the trustee or any
holder of outstanding debt securities. At any time after a declaration of acceleration with respect to debt securities of any series
has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of a
majority in principal amount of the outstanding debt securities of that series may rescind and annul the acceleration if all Events
of Default, other than the non-payment of accelerated principal and interest, if any, with respect to debt securities of that series,
have been cured or waived as provided in the indenture. (Section 6.2) We refer you to the prospectus supplement relating to any
series of debt securities that are discount securities for the particular provisions relating to acceleration of a portion of the
principal amount of such discount securities upon the occurrence of an Event of Default.
The indenture provides that the trustee may refuse to perform
any duty or exercise any of its rights or powers under the indenture, unless the trustee receives indemnity satisfactory to it
against any cost, liability or expense that might be incurred by it in performing such duty or exercising such right or power.
(Section 7.1(e)) Subject to certain rights of the trustee, the holders of a majority in principal amount of the outstanding debt
securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available
to the trustee or exercising any trust or power conferred on the trustee with respect to the debt securities of that series. (Section
6.12)
No holder of any debt security of any series will have any right
to institute any proceeding, judicial or otherwise, with respect to the indenture or for the appointment of a receiver or trustee,
or for any remedy under the indenture, unless:
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that holder has previously given to the trustee written notice of a continuing Event of Default with respect to debt securities of that series; and
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the holders of not less than 25% in principal amount of the outstanding debt securities of that series have made written request, and offered indemnity or security satisfactory to the trustee, to the trustee to institute the proceeding as trustee, and the trustee has not received from the holders of not less than a majority in principal amount of the outstanding debt securities of that series a direction inconsistent with that request and has failed to institute the proceeding within 60 days. (Section 6.7)
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Notwithstanding any other provision in the indenture, the holder
of any debt security will have an absolute and unconditional right to receive payment of the principal of, and premium and any
interest on, that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement
of payment. (Section 6.8)
The indenture requires us, within 120 days after the end of
our fiscal year, to furnish to the trustee a statement as to compliance with the indenture. (Section 4.3) If a Default or Event
of Default occurs and is continuing with respect to the securities of any series and if it is known to a responsible officer of
the trustee, the trustee shall mail to each holder of the securities of that series notice of a Default or Event of Default within
90 days after it occurs or, if later, after a responsible officer of the trustee has knowledge of such Default or Event of Default.
The indenture provides that the trustee may withhold notice to the holders of debt securities of any series of any Default or Event
of Default (except in payment on any debt securities of that series) with respect to debt securities of that series if the trustee
determines in good faith that withholding notice is in the interest of the holders of those debt securities. (Section 7.5)
Modification and Waiver
We and the trustee may modify, amend or supplement the indenture
or the debt securities of any series without the consent of any holder of any debt security:
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to cure any ambiguity, defect or inconsistency;
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to comply with covenants in the indenture described above under the heading “Consolidation, Merger and Sale of Assets”;
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to provide for uncertificated securities in addition to or in place of certificated securities;
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to add guarantees with respect to debt securities of any series or secure debt securities of any series;
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to surrender any of our rights or powers under the indenture;
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to add covenants or Events of Default for the benefit of the holders of debt securities of any series;
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to comply with the applicable procedures of the applicable depositary;
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to make any change that does not adversely affect the rights of any holder of debt securities;
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to provide for the issuance of and establish the form and terms and conditions of debt securities of any series as permitted by the indenture;
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to effect the appointment of a successor trustee with respect to the debt securities of any series and to add to or change any of the provisions of the indenture to provide for or facilitate administration by more than one trustee; or
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to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act. (Section 9.1)
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We may also modify and amend the indenture with the consent
of the holders of at least a majority in principal amount of the outstanding debt securities of each series affected by the modifications
or amendments. We may not make any modification or amendment without the consent of the holders of each affected debt security
then outstanding if that amendment will:
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reduce the amount of debt securities whose holders must consent to an amendment, supplement or waiver;
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reduce the rate of or extend the time for payment of interest (including default interest) on any debt security;
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reduce the principal of or premium on or change the fixed maturity of any debt security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation with respect to any series of debt securities;
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reduce the principal amount of discount securities payable upon acceleration of maturity;
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waive a Default or Event of Default in the payment of the principal of, or premium or interest on, any debt security (except a rescission of acceleration of the debt securities of any series by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities of that series and a waiver of the payment default that resulted from such acceleration);
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make the principal of, or premium or interest on, any debt security payable in currency other than that stated in the debt security;
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make any change to certain provisions of the indenture relating to, among other things, the right of holders of debt securities to receive payment of the principal of, and premium and interest on, those debt securities and to institute suit for the enforcement of any such payment and to waivers or amendments; or
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waive a redemption payment with respect to any debt security. (Section 9.3)
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Except for certain specified provisions, the holders of at least
a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all debt securities
of that series waive our compliance with provisions of the indenture. (Section 9.2) The holders of a majority in principal amount
of the outstanding debt securities of any series may on behalf of the holders of all the debt securities of such series waive any
past default under the indenture with respect to that series and its consequences, except a default in the payment of the principal
of, or any interest on, any debt security of that series; provided, however, that the holders of a majority in principal amount
of the outstanding debt securities of any series may rescind an acceleration and its consequences, including any related payment
default that resulted from the acceleration. (Section 6.13)
Defeasance of Debt Securities and Certain Covenants in Certain
Circumstances
Legal Defeasance. The indenture provides that, unless
otherwise provided by the terms of the applicable series of debt securities, we may be discharged from any and all obligations
in respect of the debt securities of any series (subject to certain exceptions). We will be so discharged upon the deposit with
the trustee, in trust, of money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency
other than U.S. dollars, government obligations of the government that issued or caused to be issued such currency, that, through
the payment of interest and principal in accordance with their terms, will provide money or U.S. government obligations in an amount
sufficient in the opinion of a nationally recognized firm of independent public accountants or investment bank to pay and discharge
each installment of principal of, premium and interest on, and any mandatory sinking fund payments in respect of, the debt securities
of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities.
This discharge may occur only if, among other things, we have
delivered to the trustee an opinion of counsel stating that we have received from, or there has been published by, the U.S. Internal
Revenue Service a ruling or, since the date of execution of the indenture, there has been a change in the applicable U.S. federal
income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the holders of the debt securities
of that series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the deposit, defeasance
and discharge and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as
would have been the case if the deposit, defeasance and discharge had not occurred. (Section 8.3)
Defeasance of Certain Covenants. The indenture provides
that, unless otherwise provided by the terms of the applicable series of debt securities, upon compliance with certain conditions:
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we may omit to comply with the covenant described under the heading “Consolidation, Merger and Sale of Assets” and certain other covenants set forth in the indenture, as well as any additional covenants that may be set forth in the applicable prospectus supplement; and
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any omission to comply with those covenants will not constitute a Default or an Event of Default with respect to the debt securities of that series (“covenant defeasance”).
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The conditions include:
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depositing with the trustee money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency other than U.S. dollars, government obligations of the government that issued or caused to be issued such currency, that, through the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants or investment bank to pay and discharge each installment of principal of, premium and interest on, and any mandatory sinking fund payments in respect of, the debt securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities; and
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delivering to the trustee an opinion of counsel to the effect that the holders of the debt securities of that series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the deposit and related covenant defeasance and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the deposit and related covenant defeasance had not occurred. (Section 8.4)
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No Personal Liability of Directors, Officers, Employees or
Securityholders
None of our past, present or future directors, officers, employees
or securityholders, as such, will have any liability for any of our obligations under the debt securities or the indenture or for
any claim based on, or in respect or by reason of, such obligations or their creation. By accepting a debt security, each holder
waives and releases all such liability. This waiver and release is part of the consideration for the issue of the debt securities.
However, this waiver and release may not be effective to waive liabilities under U.S. federal securities laws, and it is the view
of the SEC that such a waiver is against public policy.
Governing Law
The indenture and the debt securities, including any claim or
controversy arising out of or relating to the indenture or the debt securities, will be governed by the laws of the State of New
York.
The indenture will provide that we, the trustee and the holders
of the debt securities (by their acceptance of the debt securities) irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to the indenture, the debt securities
or the transactions contemplated thereby.
The indenture will provide that any legal suit, action or proceeding
arising out of or based upon the indenture or the transactions contemplated thereby may be instituted in the federal courts of
the United States of America located in the City of New York or the courts of the State of New York in each case located in the
City of New York, and we, the trustee and the holder of the debt securities (by their acceptance of the debt securities) irrevocably
submit to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The indenture will further provide
that service of any process, summons, notice or document by mail (to the extent allowed under any applicable statute or rule of
court) to such party’s address set forth in the indenture will be effective service of process for any suit, action or other
proceeding brought in any such court. The indenture will further provide that we, the trustee and the holders of the debt securities
(by their acceptance of the debt securities) irrevocably and unconditionally waive any objection to the laying of venue of any
suit, action or other proceeding in the courts specified above and irrevocably and unconditionally waive and agree not to plead
or claim any such suit, action or other proceeding has been brought in an inconvenient forum. (Section 10.10)
Outstanding Debt Securities
As of March 31, 2020, we had outstanding $1,485,673 of senior
secured notes.
Rights
We may issue rights to purchase common stock, preferred stock
or warrants that we may offer to our security holders in one or more series. The rights may or may not be transferable by the persons
purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement
with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered
securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights
agent agreement to be entered into between us and a bank or trust company, as rights agent, that we will name in the applicable
prospectus supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation
or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. A copy of the
form of rights agent or subscription agent agreement, including the form of rights certificate representing a series of rights,
will be filed with the SEC in connection with the offering of a particular series of rights.
The prospectus supplement relating to any rights that we offer
will include specific terms relating to the offering, including, among other matters:
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the title of the rights;
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the securities for which the rights are exercisable;
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the date of determining the security holders entitled to the rights distribution;
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the aggregate number of rights issued and the aggregate number of shares of common stock or preferred stock or warrants purchasable upon exercise of the rights;
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the extent to which the rights are transferable;
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the exercise price;
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the rights;
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the conditions to completion of the rights offering;
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any applicable federal income tax considerations;
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if applicable, the material terms of any standby underwriting or other purchase arrangement that we may enter into in connection with the rights offering;
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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and
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any other terms of the rights, including terms, procedures and limitations relating to the exchange and exercise of the rights.
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Each right would entitle the holder of the rights to purchase
for cash the amount of shares of common stock or preferred stock or warrants at the exercise price set forth in the applicable
prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided
in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become
void.
We may determine to offer any unsubscribed securities directly
to persons other than our security holders, to or through agents, underwriters or dealers or through a combination of such methods,
including pursuant to standby arrangements, as described in the applicable prospectus supplement.
Until a holder exercises the rights to purchase shares of our
common stock or preferred stock or warrants, the holder will not have any rights as a holder of shares of our common stock or preferred
stock or warrants, as the case may be, by virtue of ownership of the rights.
Units
We may issue units consisting of one or more of the other securities
described in this prospectus, in any prospectus supplement or a free writing prospectus in any combination. Each unit will be issued
so that the holder of the unit is also the holder, with the rights and obligations of a holder, of each security included in the
unit. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred
separately, at any time or at any time before a specified date or upon the occurrence of a specified event or occurrence.
The applicable prospectus supplement or free writing prospectus
will describe:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any unit agreement under which the units will be issued;
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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whether the units will be issued in fully registered or global form.
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Global Securities
Book-Entry, Delivery and Form
Unless we indicate differently in any applicable prospectus
supplement or free writing prospectus, the securities initially will be issued in book-entry form and represented by one or more
global notes or global securities (collectively, “global securities”). The global securities will be deposited
with, or on behalf of, DTC and registered in the name of Cede & Co., the nominee of DTC. Unless and until it is exchanged for
individual certificates evidencing securities under the limited circumstances described below, a global security may not be transferred
except as a whole by the depositary to its nominee or by the nominee to the depositary, or by the depositary or its nominee to
a successor depositary or to a nominee of the successor depositary.
DTC has advised us that it is:
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a limited-purpose trust company organized under the New York Banking Law;
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a “banking organization” within the meaning of the New York Banking Law;
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a member of the Federal Reserve System;
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a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and
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a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.
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DTC holds securities that its participants deposit with DTC.
DTC also facilitates the settlement among its participants of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in participants’ accounts, thereby eliminating the need for
physical movement of securities certificates. “Direct participants” in DTC include securities brokers and dealers,
including underwriters, banks, trust companies, clearing corporations and other organizations. DTC is a wholly-owned subsidiary
of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the
users of its regulated subsidiaries. Access to the DTC system is also available to others, which we sometimes refer to as indirect
participants, that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly.
The rules applicable to DTC and its participants are on file with the SEC.
Purchases of securities under the DTC system must be made by
or through direct participants, which will receive a credit for the securities on DTC’s records. The ownership interest of
the actual purchaser of a security, which we sometimes refer to as a beneficial owner, is in turn recorded on the direct and indirect
participants’ records. Beneficial owners of securities will not receive written confirmation from DTC of their purchases.
However, beneficial owners are expected to receive written confirmations providing details of their transactions, as well as periodic
statements of their holdings, from the direct or indirect participants through which they purchased securities. Transfers of ownership
interests in global securities are to be accomplished by entries made on the books of participants acting on behalf of beneficial
owners. Beneficial owners will not receive certificates representing their ownership interests in the global securities, except
under the limited circumstances described below.
To facilitate subsequent transfers, all global securities deposited
by direct participants with DTC will be registered in the name of DTC’s partnership nominee, Cede & Co., or such other
name as may be requested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the
name of Cede & Co. or such other nominee will not change the beneficial ownership of the securities. DTC has no knowledge of
the actual beneficial owners of the securities. DTC’s records reflect only the identity of the direct participants to whose
accounts the securities are credited, which may or may not be the beneficial owners. The participants are responsible for keeping
account of their holdings on behalf of their customers.
So long as the securities are in book-entry form, you will receive
payments and may transfer securities only through the facilities of the depositary and its direct and indirect participants. We
will maintain an office or agency in the location specified in the prospectus supplement for the applicable securities, where notices
and demands in respect of the securities and the indenture may be delivered to us and where certificated securities may be surrendered
for payment, registration of transfer or exchange.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct participants and indirect participants to beneficial
owners will be governed by arrangements among them, subject to any legal requirements in effect from time to time.
Redemption notices will be sent to DTC. If less than all of
the securities of a particular series are being redeemed, DTC’s practice is to determine by lot the amount of the interest
of each direct participant in the securities of such series to be redeemed.
Neither DTC nor Cede & Co. (or such other DTC nominee) will
consent or vote with respect to the securities. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible
after the record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those direct participants
to whose accounts the securities of such series are credited on the record date, identified in a listing attached to the omnibus
proxy.
So long as securities are in book-entry form, we will make payments
on those securities to the depositary or its nominee, as the registered owner of such securities, by wire transfer of immediately
available funds. If securities are issued in definitive certificated form under the limited circumstances described below and unless
if otherwise provided in the description of the applicable securities herein or in the applicable prospectus supplement, we will
have the option of making payments by check mailed to the addresses of the persons entitled to payment or by wire transfer to bank
accounts in the United States designated in writing to the applicable trustee or other designated party at least 15 days before
the applicable payment date by the persons entitled to payment, unless a shorter period is satisfactory to the applicable trustee
or other designated party.
Redemption proceeds, distributions and dividend payments on
the securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC.
DTC’s practice is to credit direct participants’ accounts upon DTC’s receipt of funds and corresponding detail
information from us on the payment date in accordance with their respective holdings shown on DTC records. Payments by participants
to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in “street name.” Those payments will be the responsibility of
participants and not of DTC or us, subject to any statutory or regulatory requirements in effect from time to time. Payment of
redemption proceeds, distributions and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized
representative of DTC, is our responsibility; disbursement of payments to direct participants is the responsibility of DTC; and
disbursement of payments to the beneficial owners is the responsibility of direct and indirect participants.
Except under the limited circumstances described below, purchasers
of securities will not be entitled to have securities registered in their names and will not receive physical delivery of securities.
Accordingly, each beneficial owner must rely on the procedures of DTC and its participants to exercise any rights under the securities
and the indenture.
The laws of some jurisdictions may require that some purchasers
of securities take physical delivery of securities in definitive form. Those laws may impair the ability to transfer or pledge
beneficial interests in securities.
DTC may discontinue providing its services as securities depositary
with respect to the securities at any time by giving reasonable notice to us. Under such circumstances, in the event that a successor
depositary is not obtained, securities certificates are required to be printed and delivered.
As noted above, beneficial owners of a particular series of
securities generally will not receive certificates representing their ownership interests in those securities. However, if:
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DTC notifies us that it is unwilling or unable to continue as a depositary for the global security or securities representing such series of securities or if DTC ceases to be a clearing agency registered under the Exchange Act at a time when it is required to be registered and a successor depositary is not appointed within 90 days of the notification to us or of our becoming aware of DTC’s ceasing to be so registered, as the case may be;
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we determine, in our sole discretion, not to have such securities represented by one or more global securities; or
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an Event of Default has occurred and is continuing with respect to such series of securities,
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we will prepare and deliver certificates for such securities
in exchange for beneficial interests in the global securities. Any beneficial interest in a global security that is exchangeable
under the circumstances described in the preceding sentence will be exchangeable for securities in definitive certificated form
registered in the names that the depositary directs. It is expected that these directions will be based upon directions received
by the depositary from its participants with respect to ownership of beneficial interests in the global securities.
PLAN OF DISTRIBUTION
We may sell the securities offered pursuant to this prospectus
from time to time in one or more transactions, including, without limitation:
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to
or through underwriters;
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through broker-dealers (acting as agent or principal);
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through agents;
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directly by us to one or more purchasers (including our affiliates and stockholders), through a specific bidding or auction process, a rights offering or otherwise;
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through a combination of any such methods of sale; or
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through any other methods described in a prospectus supplement.
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The distribution of securities may be effected, from
time to time, in one or more transactions, including:
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block transactions (which may involve crosses) and transactions on The Nasdaq Capital Market or any other organized market where the securities may be traded;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement;
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ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;
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sales “at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise; and
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sales in other ways not involving market makers or established trading markets, including direct sales to purchasers.
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The applicable prospectus supplement will describe the terms
of the offering of the securities, including:
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the name or names of any underwriters, if, and if required, any dealers or agents;
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the purchase price of the securities and the proceeds we will receive from the sale;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any discounts or concessions allowed or re-allowed or paid to dealers; and
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any securities exchange or market on which the securities may be listed or traded.
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We may distribute the securities from time to time in one or
more transactions at:
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a fixed price or prices, which may be changed;
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market prices prevailing at the time of sale;
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prices related to such prevailing market prices; or
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negotiated prices.
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Only underwriters named in the prospectus supplement are underwriters
of the securities offered by the prospectus supplement.
If underwriters are used in an offering, we will execute an
underwriting agreement with such underwriters and will specify the name of each underwriter and the terms of the transaction (including
any underwriting discounts and other terms constituting compensation of the underwriters and any dealers) in a prospectus supplement.
The securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly
by one or more investment banking firms or others, as designated. If an underwriting syndicate is used, the managing underwriter(s)
will be specified on the cover of the prospectus supplement. If underwriters are used in the sale, the offered securities will
be acquired by the underwriters for their own accounts and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Any public offering
price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. Unless otherwise
set forth in the prospectus supplement, the obligations of the underwriters to purchase the offered securities will be subject
to conditions precedent, and the underwriters will be obligated to purchase all of the offered securities, if any are purchased.
We may grant to the underwriters options to purchase additional
securities to cover over-allotments, if any, at the public offering price, with additional underwriting commissions or discounts,
as may be set forth in a related prospectus supplement. The terms of any over-allotment option will be set forth in the prospectus
supplement for those securities.
If a dealer is used in the sale of the securities, we, or an
underwriter, will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement,
document incorporated by reference or free writing prospectus, as applicable, the name of the dealer and the terms of the transactions.
We may sell the securities directly or through agents we designate
from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions
we will pay the agent in the prospectus supplement.
We may authorize agents or underwriters to solicit offers by
institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant
to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions
to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
In connection with the sale of the securities, underwriters,
dealers or agents may receive compensation from us or from purchasers of the securities for whom they act as agents, in the form
of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional
investors or others that purchase securities directly for the purpose of resale or distribution, may be deemed to be underwriters,
and any discounts or commissions received by them from us and any profit on the resale of the common stock by them may be deemed
to be underwriting discounts and commissions under the Securities Act. No FINRA member firm may receive compensation in excess
of that allowable under FINRA rules, including Rule 5110, in connection with the offering of the securities.
We may provide agents, underwriters and other purchasers with
indemnification against particular civil liabilities, including liabilities under the Securities Act, or contribution with respect
to payments that the agents, underwriters or other purchasers may make with respect to such liabilities. Agents and underwriters
may engage in transactions with, or perform services for, us in the ordinary course of business.
To facilitate the public offering of a series of securities,
persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the market price
of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating
in the offering of more securities than have been sold to them by us. In addition, those persons may stabilize or maintain the
price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling
concessions allowed to underwriters or dealers participating in any such offering may be reclaimed if securities sold by them are
repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the
market price of the securities at a level above that which might otherwise prevail in the open market. Such transactions, if commenced,
may be discontinued at any time. We make no representation or prediction as to the direction or magnitude of any effect that the
transactions described above, if implemented, may have on the price of our securities.
Unless otherwise specified in the applicable prospectus supplement,
any common stock sold pursuant to a prospectus supplement will be eligible for trading as listed on The Nasdaq Capital Market.
Any underwriters to whom securities are sold by us for public offering and sale may make a market in the securities, but such underwriters
will not be obligated to do so and may discontinue any market making at any time without notice.
In order to comply with the securities laws of some states,
if applicable, the securities offered pursuant to this prospectus will be sold in those states only through registered or licensed
brokers or dealers. In addition, in some states securities may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification requirement is available and complied with.
So long as the aggregate market value of our voting and non-voting
common equity held by non-affiliates is less than $75,000,000 and so long as required by the rules of the SEC, the amount of securities
we may offer hereunder will be limited such that the aggregate market value of securities sold by us during a period of 12 calendar
months cannot exceed one-third of the aggregate market value of the voting and non-voting common equity held by non-affiliates.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution.
LEGAL MATTERS
The validity of the issuance of the offered securities will
be passed upon for us by Pepper Hamilton LLP, New York, New York.
EXPERTS
Marcum LLP, independent registered public accounting firm, has
audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended September 30, 2019,
as set forth in their report, which is incorporated by reference in the prospectus and elsewhere in this registration statement.
Our consolidated financial statements are incorporated by reference in reliance on Marcum LLP’s report, given on their authority
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus and any subsequent prospectus supplements do
not contain all of the information in the Registration Statement. We have omitted from this prospectus some parts of the Registration
Statement as permitted by the rules and regulations of the SEC. Statements in this prospectus concerning any document we have filed
as an exhibit to the Registration Statement or that we otherwise filed with the SEC are not intended to be comprehensive and are
qualified in their entirety by reference to these filings. In addition, we file annual, quarterly and current reports, proxy statements
and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other
information that registrants file electronically with the SEC, including us. The SEC’s website can be found at http://www.sec.gov.
In addition, we make available on or through our website copies of these reports as soon as reasonably practicable after we electronically
file or furnished them to the SEC. Our website can be found at http:www.adnas.com. Our website is not a part of this prospectus.
INFORMATION INCORPORATED BY REFERENCE
We have elected to incorporate certain information by reference
into this prospectus. By incorporating by reference, we can disclose important information to you by referring you to other documents
we have filed or will file with the SEC. The information incorporated by reference is deemed to be part of this prospectus, except
for information incorporated by reference that is superseded by information contained in this prospectus. This means that you must
look at all of the SEC filings that we incorporate by reference to determine if any statements in the prospectus or any document
previously incorporated by reference have been modified or superseded. This prospectus incorporates by reference the documents
set forth below that we have previously filed with the SEC, except in each case the information contained in such document to the
extent “furnished” and not “filed”:
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Our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, filed with the SEC on December 12, 2019.
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Our Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2019, filed with the SEC on February 6, 2020.
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Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, filed with the SEC on May 14, 2020.
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Our Current Reports on Form 8-K filed with the SEC on December 12, 2019 (except Item 2.02 and Exhibit 99.1), February 6, 2020 (except Item 2.02 and Exhibit 99.1), May 5, 2020 (except Exhibit 99.1) and May 19, 2020.
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The description of our capital stock contained in our registration statement on Form 8-A (File No. 001-36745) filed with the Commission on November 13, 2014, pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.
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We also incorporate by reference all documents we file in the
future pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the sale
of all the securities covered by this prospectus (including all such documents filed with the SEC after the date of the initial
filing of the Registration Statement that contains this prospectus and prior to effectiveness of the Registration Statement or
after such effectiveness), except in each case the information contained in such document to the extent “furnished”
and not “filed.”
You may obtain copies of these documents on the website
maintained by the SEC at http://www.sec.gov, or from us without charge (other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such documents) by writing us at Corporate Secretary, Applied DNA Sciences,
Inc., 50 Health Sciences Drive, Stony Brook, New York 11790 or visiting our website at http://www.adnas.com.
Any statement contained in a document incorporated or deemed
to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for the purposes of this prospectus
to the extent that a statement contained herein, any prospectus supplement or in any other subsequently filed document which also
is or deemed to be incorporated by reference herein modifies or supersedes that statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
1,810,000
SHARES OF COMMON STOCK
PROSPECTUS
SUPPLEMENT
Roth Capital Partners
January 10, 2021
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