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): May 1, 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 1.01 Entry into a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation.
Item 3.02 Unregistered Sales of Equity Securities.
On May 2, 2006, Applied DNA Sciences, Inc., a Nevada corporation (the
"Company"), completed the first tranche of a private placement (the "Placement")
of up to 140 units at $50,000 per unit for sale to "accredited investors" who
are not a "U.S. person," as each is defined in regulations promulgated under the
Securities Act. In this first tranche, the Company sold 20 units for aggregate
gross proceeds of $1,000,000. Each such unit consists of (i) a $50,000 Principal
Amount 10% Secured Convertible Promissory Note and (ii) a warrant to purchase
100,000 shares of the Company's common stock exercisable for a period of four
years commencing on May 2, 2007, at a price of $0.50 per share. Each such
warrant may be redeemed at the option of the Company at a redemption price of
$0.001 upon the earlier of (i) May 2, 2009, and (ii) the date a registration
statement for the resale of the underlying common stock has been declared
effective by the Securities and Exchange Commission (the "Commission"), and the
Company's stock has traded on The Over the Counter Bulletin Board at or above
$1.00 per share for 20 consecutive trading days. The promissory notes 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
notes at any time from May 2, 2006, through May 2, 2007, and shall automatically
convert on such date at a 20% discount to the average of the closing bid prices
of the Company's common stock on trading days during the 12 months prior to such
conversion. The promissory notes bear interest at the rate of 10% per annum and
are due and payable in full on August 2, 2007. Any principal payment of or
interest payment on the outstanding promissory notes not paid when due, whether
upon maturity, acceleration or otherwise, shall bear interest at the lesser of
12% or the maximum rate permissible by law. At any time prior to conversion, the
Company will have the right to prepay the promissory notes and accrued but
unpaid interest thereon upon 3 days notice, allowing the holders to convert the
promissory notes during such notice period.
Until the principal and interest under the promissory notes are paid in
full, or converted into common stock of the Company, the promissory notes will
be secured by a security interest in all of the assets of the Company. This
security interest will be pari passu with the security interest granted to the
holders of $1,500,000 of $50,000 principal amount 10% secured convertible
promissory notes issued as part of a private placement of the Company completed
on March 8, 2006. The Company may issue up to $4,500,000 of debt in addition to
the remaining $6,000,000 that may be sold in the Placement that may be secured
by a security interest in all of the Company's assets, which interest would be
pari passu to the security interest granted to the holders of the promissory
notes and the promissory notes issued in March.
In connection with the Placement, each purchaser of a unit has entered
into a subscription agreement and a registration rights agreement with the
Company. Pursuant to this registration right agreement, the Company will prepare
and file a registration statement with the Commission for the resale of the
common stock underlying the promissory notes and the warrants within 30 days of
the Company's registration statement on Form SB-2, as amended (SEC File No.
333-122848), being declared effective by the Commission, and to use the
Company's reasonable best efforts to have the registration statement for the
resale of the common stock underlying the promissory notes and the warrants
declared effective by the Commission by no later than 180 days after filing. The
obligations of the Company to file and have such registration statement declared
effective shall terminate as to any holder of the units upon the earlier of the
date: (a) when all of such holder's common stock underlying the promissory notes
and the warrants may be sold during a single three (3) month period under Rule
144 of the Securities Act; and (b) when all of such holder's common stock
underlying the promissory notes and the warrants may be transferred under Rule
144(k) of the Securities Act, unless such holder later becomes an affiliate of
the Company (as defined in Rule 144 of the Securities Act) in which case the
Company's obligation shall be revived until such holder's rights otherwise
terminate under clause (a) above.
Arjent Limited served as the Company's placement agent in the Placement.
The Company has agreed to pay from the proceeds of the Placement: (1) to Arjent
Limited: (a) a commission equal to 10% of the gross proceeds of the Placement;
(b) a non-accountable expense allowance equal to 3% and non-accountable due
diligence expenses equal to 2%, of the gross proceeds of the Placement; (c)
2,400,000 shares of common stock of the Company; and (d) $75,000 for Arjent
Limited's legal fees and expenses; and (2) $150,000 to VC Arjent Ltd., formerly
known as Vertical Capital Partners, Inc., for consulting and management fees.
The Company claims an exemption from the registration requirements of the
Securities Act for the private placement of the units pursuant to Regulation S
promulgated under the Securities Act because each of the units were sold in an
"offshore transaction" to persons who are not a "U.S. person," in each case as
defined in Regulation S.
Item 8.01 Other Events.
On May 1, 2006, the Company issued a press release to announce the launch
of its SigNature Botanical DNA Authentication Program. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit 10.1 Form of Subscription Agreement by and between Applied DNA
Sciences, Inc. and each purchaser of a unit.
Exhibit 10.2 Form of 10% Secured Convertible Promissory Note of Applied
DNA Sciences, Inc.
Exhibit 10.3 Form of Warrant Agreement of Applied DNA Sciences, Inc.
Exhibit 10.4 Form of Registration Rights Agreement by and between the
Applied DNA Sciences, Inc. and each purchaser of a unit.
Exhibit 99.1 Press release of Applied DNA Sciences, Inc., dated May 1,
2006.
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: May 5, 2006
Exhibit No. Description of Exhibit
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10.1 Form of Subscription Agreement by and between Applied DNA
Sciences, Inc. and each purchaser of a unit.
10.2 Form of 10% Secured Convertible Promissory Note of Applied DNA
Sciences, Inc.
10.3 Form of Warrant Agreement of Applied DNA Sciences, Inc.
10.4 Form of Registration Rights Agreement by and between the Applied
DNA Sciences, Inc. and each purchaser of a unit.
99.1 Press Release of Applied DNA Sciences, Inc., dated May 1, 2006.