SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 4, 2018 (August 31, 2018)
Applied DNA Sciences, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
(Commission File Number)
50 Health Sciences Drive
Stony Brook, New York 11790
(Address of principal executive offices; zip code)
Registrant’s telephone number, including area code:
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|¨||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|¨||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|¨||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|¨||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into a Material Definitive Agreement
On August 31, 2018, Applied DNA Sciences, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein, including the Company’s chairman, president and chief executive officer, certain members of the Board of Directors and management team, and certain other accredited investors (the “Purchasers”), pursuant to which the Company issued and sold to the Purchasers an aggregate of $1.65 million in principal amount of secured convertible notes (the “Notes”) bearing interest at a rate of 6% per annum (the “Private Placement”).
The Notes are convertible, in whole or in part, at any time, at the option of the Purchasers, into shares of the Company’s Common Stock, $0.001 par value per share (“Common Stock”), in an amount determined by dividing the principal amount of each Note, together with any and all accrued and unpaid interest, by the conversion price of $2.50. The Company has the right to require the Purchasers to convert all or any part of their Notes into shares of the Company’s Common Stock at a conversion price of $2.50 if the price of the Common Stock remains at a closing price of $3.50 or more for a period of twenty consecutive trading days.
Upon any Change in Control (as defined in the Notes), the Purchasers have the right to require the Company to redeem the Notes, in whole or in part, at a redemption price equal to such Notes’ outstanding principal balance plus accrued interest.
The Notes contain certain events of default that are customarily included in financing of this nature. If an event of default occurs, the Purchasers may require the Company to redeem the Notes, in whole or in part, at a redemption price equal to such notes’ outstanding principal balance plus accrued interest.
The Notes bear interest at the rate of 6% per annum, payable semi-annually in cash or in kind, at the Company’s option, and are due and payable in full on August 30, 2021. Until the principal and accrued but unpaid interest under the Notes is paid in full, or converted into shares of common stock pursuant to their terms, the Company’s obligations under the Notes will be secured by a lien on substantially all assets of the Company and the assets of APDN (B.V.I.) Inc., the Company’s wholly-owned subsidiary (“APDN BVI”), in favor of CSC Corporation, as Collateral Agent for the Purchasers pursuant to security agreements dated as of the date of the Purchase Agreement (the “Security Agreements”).
The Company also entered into a registration rights agreement, dated as of the date of the Purchase Agreement (the “Registration Rights Agreement”), with the Purchasers, pursuant to which the Company has agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) to register under the Securities Act of 1933, as amended (the “Securities Act”) resales from time to time of the Common Stock issued or issuable upon conversion or redemption of the Notes. The Company is required to file a registration statement within 60 days of receiving a demand registration request from holders of a majority of the outstanding principal balance of the Notes, and to cause the registration statement to be declared effective within 45 days (or 90 days if the registration statement is reviewed by the SEC).
The Private Placement was completed in reliance upon the exemption from registration provided for by Section 4(a)(2) of the Securities Act and by Rule 506 of Regulation D promulgated under the Securities Act. Each of the Purchasers represented to the Company in the Purchase Agreement that it is an “accredited investor” as that term is defined in Rule 501 of Regulation D. This Current Report on Form 8-K shall not constitute an offer to sell, the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The respective descriptions of the Purchase Agreement, Note, Security Agreements and Registration Rights Agreement herein are brief summaries only.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02.
Item 8.01 Other Events.
On September 4, 2018, the Company issued a press release announcing the Private Placement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information related to the press release furnished pursuant to this Item 1.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
( d) Exhibits
|99.1||Press Release of Applied DNA Sciences, Inc. dated September 4, 2018 regarding the private placement.|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Date: September 4, 2018||APPLIED DNA SCIENCES, INC.|
|By:||/s/ James A. Hayward|
|Name:||James A. Hayward|
|Title:||Chief Executive Officer|
|99.1||Press Release of Applied DNA Sciences, Inc. dated September 4, 2018 regarding the private placement.|
Applied DNA Announces Closing of $1.65 Million
Private Placement of Secured Convertible Notes
STONY BROOK, N.Y., September 4, 2018 –Applied DNA Sciences Inc., (NASDAQ: APDN, “Applied DNA” or the “Company”), the leader in large-scale PCR-based DNA manufacturing, today announced the closing in the amount of $1.65 million of secured convertible notes (the “Notes”) by way of a non-brokered private placement with accredited investors and certain members of its management team and Board of Directors, led by its Chairman, President and Chief Executive Officer. The Company expects to use the proceeds for general corporate purposes.
“This investment enhances our balance sheet and supports our pursuit of pre-commercial revenue opportunities in the synthetic textile, pharmaceutical and legal cannabis markets that we believe will further diversify our revenue streams beyond our core cotton market. Having demonstrated success in penetrating large and developing markets with substantial issues with supply chain security, such as the U.S. cotton supply chain, our growing penetration of non-commodity markets offer a path to revenue growth,” said Dr. James A. Hayward, chairman, president and chief executive officer of Applied DNA. “I want to thank the participating members of the management team, Board of Directors and outside investors for their very strong vote of confidence in the Company’s vision, growth strategy and market opportunity.”
The Notes were issued on August 31, 2018, mature on August 30, 2021, and, carry a coupon of 6.00%, payable semi-annually either in cash, or in kind. Each Note, including interest, is convertible at the option of the holder at any time prior to maturity into shares of Common Stock at a conversion price of $2.50 per share. The Company has the right to require the holders of the Notes to convert the Notes, including interest, into shares of Common Stock at a conversion price of $2.50 per share in the event that the Company’s closing share price exceeds $3.50 for 20 consecutive trading days. The Notes will be secured by substantially all assets of the Company.
About Applied DNA Sciences
Applied DNA is a provider of molecular technologies that enable supply chain security, anti-counterfeiting and anti-theft technology, product genotyping and DNA mass production for diagnostics and therapeutics.
Applied DNA makes life real and safe by providing innovative, molecular-based technology solutions and services that can help protect products, brands, entire supply chains, and intellectual property of companies, governments and consumers from theft, counterfeiting, fraud and diversion. The proprietary DNA-molecular based “CertainT ® ” platform can be used to identify, tag, test, and track products, to help assure authenticity, origin, traceability, sustainability and quality of products. SigNature ® DNA describes the core technology ingredient that is at the heart of a family of uncopyable, security and authentication solutions such as SigNature ® T and fiberTyping ® , targeted toward textiles and apparel, BackTrac™ and DNAnet ® , for anti-theft and loss prevention, and digitalDNA ® , providing powerful track-and-trace. All provide a forensic chain of evidence, and can be used to prosecute perpetrators. Applied DNA Sciences is also engaged in the large-scale production of specific DNA sequences using the polymerase chain reaction.
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The Company’s Common Stock and warrants are listed on the NASDAQ Capital Market under the symbols APDN and APDNW, respectively.
Forward Looking Statements
The statements made by Applied DNA in this press release may be "forward-looking" in nature within the meaning of the Private Securities Litigation Act of 1995. Forward-looking statements describe Applied DNA’s future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to our history of losses, limited financial resources, limited market acceptance, shifting enforcement priorities of US federal laws relating to cannabis, and various other factors detailed from time to time in Applied DNA's SEC reports and filings, including our Annual Report on Form 10-K filed on December 28, 2017 and our subsequent quarterly reports on Form 10-Q filed on February 8, 2018, May 3, 2018 and August 13, 2018, which are available at www.sec.gov . APDN undertakes no obligation to update publicly any forward - looking statements to reflect new information, events or circumstances after the date hereof to reflect the occurrence of unanticipated events, unless otherwise required by law.
investor contact: Sanjay M. Hurry, LHA Investor Relations, 212-838-3777, email@example.com