Applied DNA Sciences, Inc. (NASDAQ:APDN) Q2 2020 Earnings Conference Call May 14, 2020 4:30 PM ET Company Participants Judy Murrah - Chief Information Officer James Hayward - Chairman, President and CEO Beth Jantzen - Chief Financial Officer Conference Call Participants Anthony Vendetti - Maxim Yi Chen - H.C. Wainwright Craig Pierce - Morgan Stanley Paul Cooney - Joseph Gunnar Operator Good day, and welcome to the Applied DNA Sciences Fiscal Second Quarter 2020 Conference Call. All participants will be in l ...

PART I - FINANCIAL INFORMATION [Item 1 - Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201%20-%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Unaudited financials show increased assets, decreased revenues, a net loss, and key subsequent events Condensed Consolidated Balance Sheet Highlights (unaudited) | Balance Sheet Item | March 31, 2020 (USD) | September 30, 2019 (USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $8,662,889 | $558,988 | | Total current assets | $9,979,073 | $2,146,308 | | Total Assets | $11,326,897 | $3,564,735 | | Total current liabilities | $1,849,884 | $2,245,990 | | Total liabilities | $4,058,121 | $4,413,234 | | Total equity (deficit) | $7,268,776 | ($848,499) | Condensed Consolidated Statements of Operations Highlights (unaudited) | Metric | Three Months Ended Mar 31, 2020 (USD) | Three Months Ended Mar 31, 2019 (USD) | Six Months Ended Mar 31, 2020 (USD) | Six Months Ended Mar 31, 2019 (USD) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $552,473 | $778,468 | $1,185,992 | $1,662,791 | | Loss from operations | ($2,682,208) | ($2,632,637) | ($5,293,626) | ($5,828,795) | | Net loss | ($2,950,905) | ($2,686,757) | ($5,613,646) | ($5,921,077) | | Net loss per share (basic and diluted) | ($0.79) | ($3.22) | ($1.76) | ($6.51) | Condensed Consolidated Statements of Cash Flows Highlights (unaudited) | Cash Flow Activity (Six Months Ended) | March 31, 2020 (USD) | March 31, 2019 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($5,151,404) | ($3,802,025) | | Net cash used in investing activities | ($44,752) | ($63,986) | | Net cash provided by financing activities | $13,300,059 | $3,747,588 | | Net increase (decrease) in cash | $8,103,903 | ($118,423) | - Subsequent to quarter end, the company received a **$0.85 million** loan under the Paycheck Protection Program (PPP) on May 1, 2020[84](index=84&type=chunk) - The company received Emergency Use Authorization (EUA) from the U.S. FDA for its Linea COVID-19 diagnostic assay kit on **May 13, 2020**[88](index=88&type=chunk) [Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202%20-%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue changes, funding activities, and the uncertain impact of COVID-19 on operations Revenue Comparison (Three Months Ended March 31) | Revenue Type | 2020 (USD) | 2019 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Product revenues | $197,801 | $119,036 | +66% | | Service revenues | $354,672 | $659,432 | -46% | Revenue Comparison (Six Months Ended March 31) | Revenue Type | 2020 (USD) | 2019 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Product revenues | $435,671 | $440,747 | -1% | | Service revenues | $750,321 | $1,222,044 | -39% | - A public offering on **November 15, 2019**, raised **$10.5 million** in net proceeds, supplemented by **$2.77 million** and **$2.91 million** from subsequent warrant exercises[141](index=141&type=chunk) - Management projects sufficient cash and cash equivalents to fund operations for the **next twelve months** from the report's filing date[142](index=142&type=chunk) - The COVID-19 pandemic has caused a decline in non-biological tagging revenues, with the overall future impact on operations and liquidity remaining **uncertain**[144](index=144&type=chunk)[145](index=145&type=chunk) [Item 3 - Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide market risk disclosures - As a **smaller reporting company**, Applied DNA Sciences, Inc. is exempt from providing quantitative and qualitative market risk disclosures[147](index=147&type=chunk) [Item 4 - Controls and Procedures](index=39&type=section&id=Item%204%20-%20Controls%20and%20Procedures) Disclosure controls were effective as of March 31, 2020, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of **March 31, 2020**[149](index=149&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended **March 31, 2020**[150](index=150&type=chunk) PART II - OTHER INFORMATION [Item 1 – Legal Proceedings](index=40&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company reported no legal proceedings during the period - No legal proceedings were reported[152](index=152&type=chunk) [Item 1A – Risk Factors](index=40&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) A new risk factor addresses the potential material adverse impact of the COVID-19 pandemic on the company - A new risk factor addresses the potential **material adverse impact** of the COVID-19 global pandemic on the company's business[153](index=153&type=chunk) - Revenues from non-biological tagging and related services have already **declined** due to COVID-19[154](index=154&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities were reported[155](index=155&type=chunk) [Item 3 – Defaults Upon Senior Securities](index=40&type=section&id=Item%203%20%E2%80%93%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[155](index=155&type=chunk) [Item 4 – Mine Safety Disclosures](index=40&type=section&id=Item%204%20%E2%80%93%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine safety disclosures are **not applicable**[155](index=155&type=chunk) [Item 5 – Other Information](index=40&type=section&id=Item%205%20%E2%80%93%20Other%20Information) The company reported no other information - No other information was reported[155](index=155&type=chunk) [Item 6 – Exhibits](index=40&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications and XBRL data files - This section lists all exhibits filed with the quarterly report, including **officer certifications** and **XBRL interactive data files**[156](index=156&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value APDN The Nasdaq Capital Market FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Numbe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value APDN The Nasdaq Capital Market FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2019 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Num ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value APDN The NASDAQ Capital Market Warrants to purchase Common Stock APDNW The NASDAQ Capital Market FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT O ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |-----------------------------------------------------------------------------------------|-----------------------------------------------------| | For the transition | period from to | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2018 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |---------------------------------------------------------------------------------------------------------------|-----------------------------------------------------| | | | | For the ...