1.01 Entry into a Material Definitive Agreement.
18, 2007, we entered into a Joint Development and Marketing Agreement with
International Imaging Materials, Inc., or IIMAK. In this agreement with IIMAK,
the parties agreed to jointly develop thermal transfer ribbons incorporating
SigNature DNA Markers to help prevent counterfeiting and product diversion
an initial six (6) month period. This period may be extended by mutual written
agreement. Upon the parties’ successful development of commercially feasible
ribbons incorporating SigNature DNA Markers, we will be paid royalties based
a calculation of net receipts by IIMAK from sales of such products. We will
receive the exclusive right to supply DNA taggants to IIMAK and IIMAK will
receive the exclusive right to manufacture and sell such products
foregoing description is qualified in its entirety by reference to the
Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated
herein by reference. A copy of the press release relating to the announcement
attached as Exhibit 99.1 and is incorporated herein by reference.
2.03 Creation of a Direct Financial Obligation.
3.02 Unregistered Sales of Equity Securities.
23, 2007, we issued and sold a $100,000 principal amount secured promissory
bearing interest at a rate of 10% per annum and a warrant to purchase 200,000
shares of our common stock to James A. Hayward, a director and the Chief
Executive Officer of the Company.
promissory note and accrued but unpaid interest thereon are convertible into
shares of common stock of the Company at a price of $0.50 per share by the
holder of the promissory note at any time from April 23, 2007, through April
2008, and shall automatically convert on April 22, 2008 at a conversion price
$0.15. At any time prior to conversion, we have the right to prepay the
promissory note and accrued but unpaid interest thereon upon 3 days prior
written notice (during which period the holder can elect to convert the note).
Until the principal and interest under the promissory note is paid in full,
converted into our common stock, the promissory note will be secured by a
security interest in all of our assets. This security interest is pari
security interest granted to the
holders of $1,500,000 in aggregate principal amount secured convertible
promissory notes of the Company issued on March 8, 2006, and the holders
$3,950,000 in aggregate principal amount secured convertible promissory notes
the Company issued on May 2, 2006 and June 15, 2006.
warrant is exercisable for a four-year period commencing on April 23, 2008,
expiring on April 22, 2012, at a price of $0.50 per share. The
warrant may be redeemed at our option at a redemption price of $0.001 upon
earlier of (i) April 22, 2010, and (ii) the date our common stock has traded
The Over the Counter Bulletin Board at or above $1.00 per share for 20
consecutive trading days.
11, 2006, our former employee Paul Reep filed suit against us, Applied
Operations Management, Inc., APDN (B.V.I.), Inc., Jun-Jei Sheu, Ben Liang,
A. Hayward, Larry Lee and Peter Brocklesby in the Clark County District
Nevada (Paul Reep v. Applied DNA Sciences, et al., Clark County District
Case No. A539250). The
action is a refiling of a lawsuit we previously disclosed (Paul Reep v.
DNA Sciences, Inc., U.S. District Court,
District of California,
No.: BC345702) in which we successfully moved the court to indefinitely
proceedings in the matter because of a forum selection clause designating
state courts as the proper forum. The
complaint alleges causes of action for breach of written contract, breach
oral contract, defamation, fraud and violations of the California Labor
and seeks approximately $360,000 in specified damages, additional damages
according to proof, potential punitive damages, and fees and costs. The
disputes all of the allegations and intends to vigorously defend this action.
This matter is in its early stages.
9.01 Financial Statements and Exhibits
Development and Marketing Agreement, dated April 18, 2007 by and between
DNA Sciences and International Imaging Materials, Inc.**
Warrant of Applied DNA Sciences, Inc.
Note of Applied DNA Sciences, Inc.
release of Applied DNA Sciences, Inc., dated April 24, 2007.
treatment has been requested with respect to certain portions of
exhibit pursuant to Rule 24b-2 under the Securities Exchange Act
portions have been field separately with the