UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): April 28, 2006
Applied DNA Sciences, Inc
(Exact Name of Registrant as Specified in Charter)
Nevada 002-90539 59-2262718
(State or Other (Commission File Number) (IRS Employer
Jurisdiction Identification No.)
of Incorporation)
25 Health Sciences Drive, Suite 113
Stony Brook, New York 11790
(Address of Principal Executive Offices) (Zip Code)
631-444-6861
(Registrant's telephone number, including area code)
Not Applicable
(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 (see General Instruction A.2 below):
|_| 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))
Item 8.01 Other Events.
Matter Voluntarily Reported to the Securities and Exchange Commission
Applied DNA Sciences, Inc. (the "Company") previously disclosed that it
was investigating the circumstances surrounding certain issuances of shares to
employees and consultants in 2005. The Company has engaged its new outside
counsel to conduct this investigation. The Company has voluntarily reported it's
current findings from the investigation to the Securities and Exchange
Commission (the "SEC"), and it has agreed to provide the SEC with further
information arising from the investigation. The Company believes that the
issuance of 8,000,000 shares to employees in July 2005 was effectuated by both
the Company's former President and it's former Chief Financial Officer/Chief
Operating Officer without approval of the board of directors. These former
officers received a total of 3,000,000 of these shares. In addition, it appears
that the 8,000,000 shares issued in July 2005, as well as an additional 550,000
shares issued to employees and consultants in March, May and August 2005, were
improperly issued without a restrictive legend stating that the shares could not
be resold legally except in compliance with the Securities Act of 1933, as
amended. The Company's investigation is continuing. The members of the Company's
management who effectuated the stock issuances that are being examined in the
investigation no longer work for the Company. The Company believes it may incur
significant costs and expenses in continuing this investigation.
Certain Relationships and Related Transactions
As the Company has previously disclosed, on November 3, 2005, the Company
issued and sold a promissory note in the principal amount of $550,000 to Allied
International Fund, Inc. ("Allied"). Allied in turn financed a portion of its
making of this loan by borrowing $450,000 from certain persons, including
$100,000 from James A. Hayward, a director and the Chief Executive Officer of
the Company. The terms of the promissory note provided that the Company issue
upon the funding of the note warrants to purchase 5,000,000 shares of the
Company's common stock at an exercise price of $0.50 per share to certain
persons designated by Allied. On November 9, 2005, the Company issued nine
warrants to Allied and eight other persons to purchase an aggregate of 5,500,000
shares of the Company's common stock at an exercise price of $0.50 per share.
These warrants included a warrant to purchase 1,100,000 shares that was issued
to James A. Hayward, a director and the Chief Executive Officer of the Company.
Additionally, the Company paid $55,000 in cash to VC Arjent, Ltd. for its
services as the placement agent with respect to this placement. All principal
and accrued but unpaid interest under the promissory note was paid in full
shortly after the closing of and from the proceeds of a private placement
completed by the Company on March 8, 2006.
On March 29, 2006 and April 13, 2006, the Company borrowed $200,000 in the
aggregate, at a rate of 7.5% per annum, from BioCogent, Ltd., a New York
corporation ("BioCogent") whose President and Chief Executive Officer and sole
stockholder is James A. Hayward, a director and the Chief Executive Officer of
the Company. These loans are due and payable upon the earlier to occur of (1)
the close of business on June 30, 2006, or (2) the closing of the issuance and
sale by the Company of its securities for gross proceeds of at least $250,000.
The proceeds from the loans will be used for general corporate purposes.
Litigation
The Company previously disclosed that it had filed an action on April 4,
2006, against defendants Paul Reep, Adrian Butash, John Barnett, Chanty Cheang,
Jaime Cardona, and Angela Wiggins in the United States District Court for the
Central District of California (Applied DNA Sciences, Inc. v. Paul Reep, Adrian
Butash, John Barnett, Chanty Cheang, Jaime Cardona, and Angela Wiggins, Case No.
CV06-2027 RGK). In this matter the Company has asked the court to make a
judicial determination that an agreement, which the Company did not authorize
and which is the basis of previously disclosed litigation against the Company by
Paul Reep, a former employee of the Company, and a new action filed by former
employees of the Company as set forth in the subsequent paragraph, is invalid
and unenforceable. This matter is in its early stages.
On April 17, 2006, former employees John D. Barnett, Jr., Adrian Butash,
Jaime A. Cardona, and Chanty Cheang filed suit against the Company, Applied DNA
Operations Management, Inc., APDN (B.V.I.), Inc., Peter Brocklesby, James A.
Hayward, and Jun-Jei Sheu, in Los Angeles County Superior Court (Barnett, et al.
v. Applied DNA Sciences, et al., Los Angeles County Superior Court Case No.
BC350904). The complaint alleges causes of action for breach of written
contract, breach of oral contract, fraud, violations of the California Labor
Code, and wrongful termination and the plaintiffs seek approximately $950,000 in
specified damages, plus additional damages according to proof, plus fees and
costs. The Company has not been served with the complaint or summons with
respect to this matter. The Company disputes all of the allegations and, in the
event that it is served with the summons and complaint, intends to vigorously
defend this action.
The Company previously disclosed that Oceanic Consulting, S.A. had
commenced an action against the Company in the Supreme Court of the State of New
York, County of New York. Oceanic Consulting, S.A. asserted a cause of action
for breach of contract based upon the allegation that the Company failed to make
payments pursuant to a consulting agreement. On April 13, 2006, Oceanic
Consulting, S.A agreed to dismiss the action and release the Company from the
claims that were the subject of the action, any other claims arising out of the
consulting agreement and any related claims, in exchange for a one-time payment
by the Company. On April 18, 2006, a stipulation of dismissal was filed with the
court and the matter has since been dismissed.
The Company previously disclosed that James Paul Brown filed an action
against the Company in the Superior Court for the State of California for the
County of Los Angeles on January 12, 2006 for a single cause of action for
breach of an alleged oral consulting agreement. The parties have executed a
settlement agreement, the Company has performed its obligations under such
agreement, and a request for dismissal with prejudice has been filed with the
court and is awaiting entry by the clerk of the court.
SIGNATURE
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.
Applied DNA Sciences, Inc.
(Registrant)
By: /s/ James Hayward
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James Hayward
Chief Executive Officer
Date: April 28, 2006