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Authenticating Cannabis Supply Chains with the CertainT® of Molecular Tags James Hayward, Ph.D. Chairman and CEO 7 December 2018

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Page 1: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Authenticating Cannabis Supply Chains

with the CertainT® of Molecular Tags

James Hayward, Ph.D.Chairman and CEO7 December 2018

Page 2: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Forward-Looking Statements

The statements made by Applied DNA Sciences, Inc. ("the Company”, or “us”) herein regarding the Company and its business may be forward-looking in nature and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including statements regarding future results of operations and financial position, business strategy, prospective products, timing and likelihood of success, and objectives of management for future operations, and are based on certain assumptions and involve a number of risks and uncertainties, many of which are beyond the control of the Company, including, but not limited to, the risks detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017, and other reports filed by the Company with the Securities and Exchange Commission. Forward-looking statements include all statements which are not historical facts, and can generally be identified by terms such as anticipates, believes, could, estimates, intends, may, plans, projects, should, will, would, or the negative of those terms and similar expressions. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and may be beyond the Company’s control, you should not rely on these statements as predictions of future events. Actual results could differ materially from those projected due to our lack of significant revenues, limited financial resources, history of losses, lack of market acceptance of our products and services, shifting enforcement priorities of US federal laws relating to cannabis, market competition, changes in the local and national economies, and various other factors. All forward-looking statements contained herein speak only as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements, whether to reflect new information, events or circumstances after the date hereof or otherwise.

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Page 3: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Applied DNA Sciences – Corporate Overview

• NASDAQ-listed as APDN• Corporate HQ in Stony Brook, NY

• 30,000 ft2 for scientific laboratories, production, administration • 60+ staff in US, UK, India• 71 issued patents and 48 pending patent applications• Regulatory and Accreditations

• ISO 9001:2008 Certified/Registered (ANAB) – quality management• ISO/IEC 17025:2005 Accredited (A2LA) – testing and calibration• Following 2011 FDA Guidance on Physical Chemical Identifier (PCID)

• World’s largest PCR-based mass producer of DNA• DNA taggant to track large commercial ecosystems• Larger engineered amplicons and genes as biotherapeutics

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Page 4: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Applied DNA Sciences

Make the world safer by utilizing our unique DNA production

capabilities coupled with our proprietary DNA tagging, testing

and tracking solutions.

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Adding value and liability protection to major brands and retailers by

leveraging our patent protected and proprietary technologies to deliver superior and scalable provenance solutions, thus making the world a

safer place and enhancing our customer’s values.

Mission Statement Value Proposition

Page 5: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Applied DNA Sciences

• Traceability in global supply chains• Authenticity to protect products and brands• Evidence to link criminal to crime, resolve claims• Scalability with contract DNA production services

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Page 6: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Products and Services

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Inks / Varnishes / Adhesives Polymers / Elastomers

Natural Commodities Powders/Granules

Page 7: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Executing Across Multiple Market Opportunities

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>200 million pounds of DNAtagged and DNA genotyped

cotton; 1,250 SKUs in 1000 stores

>15 million pounds of DNA tagged polyester fiber

>850,000 DNA-marked microcircuits in circulation

>60,000 DNA-markedautomobiles

U.S. DoD agency contracts include: Defense Logistics Agency, Missile Defense

Agency, Office of Secretary of Defense

U.S. Department of Agriculture:Multi-year collaboration agreement

on DNA genotyping of cotton

Page 8: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Tracking Cannabis with CertainT®

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The Cannabis Industry represents a significant business opportunity with a compelling set of needs that can be uniquely addressed with Applied DNA’s platform:

• Keep legal product within state borders • Cope with potential federal oversight • Enhance the likelihood of subsequent permits • Advanced track & trace aids safety and law enforcement

In January 2018 Applied DNA signed initial two-year, $1 millioncontract with TheraCann for integration of SigNature® molecular

tagging and testing technology into their blockchain-based, seed-to-saleEnterprise Resource Platform (ERP) for legal cannabis operations.

Page 9: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Tracking Cannabis with CertainT®

Tag

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Test Track

Page 10: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

The Risk of Non-Compliance

• Cannabis becomes tainted by poisons used to facilitate ease and yield on State properties

• Bulk of that Cannabis targeted for export across State lines (CA to NY)• Environmental impact – unlicensed grow sites – endangered species

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California Cannabis Bust - Utah

Humbolt marten - deforestation Spotted Owl – rat poison

Page 11: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Marketing and Selling Strategy

• Core vertical markets• Direct sales channel• Strategic selling partnerships• Supported by:

• Social Media Campaigns• Video Campaigns

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Page 12: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Management Team

• James Hayward – CEO, President and Chairman• Judy Murrah – Operations and IT• Beth Janzen – Finance• Mike Hogan – Product Development• John Shearman – Marketing• Clay Sharrock – Legal Council• MeiLin Wan – Sales• Wayne Buchen – Sales

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Page 13: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

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RawMaterials

Manufacturer Wholesale/Distribution

Retail

Low

High

$Value

Goods ValueWithout CertainT

Goods ValueWith CertainT®

Revenue Model:

Tagging fees

Testing fees

Value-enhancement license

on retail goods

Applied DNA Sciences

Page 14: Authenticating Cannabis Supply Chains with the CertainT ... · Forward-looking statements describe the Company’s future plans, projections, strategies and expectations, including

Thank you. adnas.com/cannabis

[email protected]