UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant | x |
Filed by a Party other than the Registrant | ¨ |
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x | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
¨ | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to § 240.14a-12 |
APPLIED DNA Sciences, Inc.
(Name of Registrant as Specified Inin Its Charter)
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x | No fee required. |
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APPLIED DNA SCIENCES, INC.
Dear Fellow Stockholder:
You are cordially invited to attend the 2019 Annuala Special Meeting of Stockholders (the “Special Meeting”) of Applied DNA Sciences, Inc. (“Applied DNA Sciences,” the “Company,” “we” or “us”) to be held at10:9:00 a.m., local time,, on Thursday, May 16,October 31, 2019, at the Center of Excellence in Wireless and InformationLong Island High Technology Incubator located at 25 Health Sciences Drive, Stony Brook, New York 11794.
At the meeting, you will be asked (i) to (i) elect eightapprove an amendment to the Company’s certificate of incorporation to effect a reverse stock split of common stock, at a ratio in the range from one-for-fifteen to one-for-fifty, with such specific ratio to be determined by the Company’s board of directors following the Special Meeting; and (ii) if necessary, to adjourn the Special Meeting to permit the Company to solicit additional proxies if there are insufficient proxies at the Special Meeting to approve the amendment of our 2005 Incentive Stock Plan to increase the number of shares of our commonreverse stock that can be issued pursuant thereto from 8,333,333 to 14,333,333, (iii) approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers, (iv) approve, on a non-binding advisory basis, the frequency of the stockholder vote on the compensation of the Company’s named executive officers, and (v) ratify our appointment of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2019. In addition, we will be pleased to report on our affairs and a discussion period will be provided for questions and comments of general interest to stockholders.split proposal. Detailed information with respect to these matters is set forth in the accompanying proxy statement (the “Proxy Statement”), which we encourage you to carefully read in its entirety.
We look forward to greeting personally those stockholders who are able to attend the meeting in person. Please note that each stockholder who wishes to attend the Special Meeting will be required to present valid government-issued photo identification to be admitted to the Special Meeting. However, whether or not you plan to be with us at the meeting, it is important that your shares be represented. Stockholders of record at the close of business on March 19,October 4, 2019 are entitled to notice of and to vote at the meeting. We will be usingPlease read the “Notice and Access” method of providing proxy materials to you via the Internet. On or about April 5, 2019, we will mail to our stockholders a Notice of Availability of Proxy Materials (“Notice”) containing instructions on how to access our Proxy Statement and our 2018 Annual Report,then, regardless of whether you plan to attend the Special Meeting, vote your shares as amended, and vote electronically viapromptly as possible. Please see page4 for information about voting by Internet, telephone, mail or in person at the Internet. The Notice also contains instructions on how to receive a printed copy of your proxy materials.
Thank you for your ongoing support of Applied DNA Sciences.
Very truly yours, | |
/s/ James A. Hayward | |
James A. Hayward Chairman, President and Chief Executive Officer |
APPLIED DNA SCIENCES, INC.
NOTICE OF ANNUALSpecial MEETING OF STOCKHOLDERS
Notice is hereby given that the 2019 Annuala Special Meeting of Stockholders (the “AnnualSpecial Meeting”) of Applied DNA Sciences, Inc. (“Applied DNA Sciences” or the “Company”), will be held on Thursday, May 16,October 31, 2019 at 10:9:00 a.m., local time, at the Center of Excellence in Wireless and InformationLong Island High Technology Incubator, located at 25 Health Sciences Drive, Stony Brook, New York 1179411790 for the following purposes:
· | to approve an amendment to the Company’s certificate of incorporation to effect a reverse stock split of common stock (the “Reverse Stock Split”), at a ratio in the range from one-for-fifteen to one-for-fifty, with such specific ratio to be determined by the Company’s board of directors following the Special Meeting; and |
· | if necessary, the adjournment of the Special Meeting to solicit additional proxies in favor of the Reverse Stock Split proposal. |
These matters are more fully described in the accompanying Proxy Statement.
Only stockholders of record at the close of business on March 19,October 4, 2019 are entitled to notice of and to vote at the meeting or any postponements or adjournments of the meeting. A list of stockholders eligible to vote at the meeting will be available for inspection at the meeting and for a period of ten days prior to the meeting during regular business hours at our corporate headquarters at Applied DNA Sciences, 50 Health Sciences Drive, Stony Brook, New York 11790. On or about April 5, 2019,
You are cordially invited to attend the Company will mail to stockholders a Notice of Availability of Proxy Materials containing instructions on how to access our Proxy Statement and our 2018 Annual Report, as amended, and vote electronically via the Internet or vote by telephone, and how to request printed proxy materials.
Ms. Judith Murrah Secretary | ||
Stony Brook, New York October 10, 2019 |
You can help avoid the instructions onnecessity and expense of sending follow-up letters to ensure a quorum by promptly returning the Notice of Internet Availability of Proxy Materials you will receive in the mail, the section entitled “About the Annual Meeting” beginning on page 1 of the Proxy Statement or, if you request to receive printed proxy materials, your enclosed proxy card. Please notefill in, sign and return the enclosed proxy card in order that shares held beneficially in street namethe necessary quorum may be voted by you in personrepresented at the Annual Meeting only if you obtain a legal proxy from the broker, bank, trustee, or other nominee that holds your shares giving you the right to vote the shares.
Important Notice Regarding the Availability of Proxy Materials
for the AnnualSpecial Meeting of Stockholders
To Be Held on May 16,October 31, 2019
The Proxy Statement, along with our 2018 Annual Report, as amended,proxy statement is available free of charge at the following website:www.proxyvote.com.
TABLE OF CONTENTS
Page
APPLIED DNA SCIENCES, INC.
50 HEALTH SCIENCES DRIVE
STONY BROOK, NEW YORK 11790
Proxies are being solicited on behalf of Directors has made this Proxy Statement and related materials available to you on the Internet, or, upon your request, has delivered printed proxy materials to you by mail, in connection with the Boardboard of Directors’ solicitation of proxies directors (the “Board”)for use at the 2019 Annuala Special Meeting of Stockholders (the “Special Meeting”) of Applied DNA Sciences, Inc. (“Applied DNA Sciences,” the “Company,” “we” or “us”) to be held on Thursday, May 16,October 31, 2019, beginning at 10:9:00 a.m., local time, at the Center of Excellence in Wireless and InformationLong Island High Technology Incubator, 25 Health Sciences Drive, Stony Brook, New York 11794,11790, and at any postponements or adjournments of the AnnualSpecial Meeting. As a stockholder, you are invited to attend the AnnualSpecial Meeting and are requested to vote on the items of business described in this proxy statement (the “Proxy Statement.
Applied DNA Sciences is using the Securities and Exchange Commission (“(the “SEC”), we are providing access rule that allows us to deliver a “full set” of our proxy materials over the Internet. Accordingly, we are sending a Notice Regarding Availabilityby mail to all of Proxy Materials (the “Notice”) to our stockholders of record and beneficial owners as of October 4, 2019 (the “Record Date”). Our proxy materials include the record date (for moreNotice of Special Meeting (the “Notice”), this Proxy Statement and a proxy card (collectively, the “Proxy Materials”), and we will mail our Proxy Materials on or about October 10, 2019. In addition to mailing our Proxy Materials, we will also provide access to our Proxy Materials over the Internet, by October 10, 2019. The Notice and the Proxy Statement instruct you on how to access and review all of the important information contained in the Proxy Materials via the Internet. The Notice and the Proxy Statement also instruct you on how you may submit your vote by mail, the record date, see “— WhoInternet, toll-free number, or in person at the Special Meeting.
Why am I receiving these materials?
We have sent you these Proxy Materials because the Board is entitledsoliciting your proxy to vote at the Annual Meeting?”).Special Meeting, including at any adjournments or postponements of the meeting. You are invited to attend the Special Meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the telephone or through the Internet. The mailing of the Noticeour Proxy Materials to our stockholders is scheduled to begin on or about April 5,October 10, 2019. All stockholders will have the ability to access the proxy materials and our Annual Report on Form 10-K for the fiscal year ended September 30, 2018, as amended (the “Annual Report”) on a website referred to in the Notice or to request to receive a printed set of the proxy materials and the Annual Report. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. Stockholders may also request to receive proxy materials and our Annual Report in printed form by mail or electronically by email on an ongoing basis.
What is the purpose of the AnnualSpecial Meeting?
At our AnnualSpecial Meeting, stockholders will act upon the matters outlined in the notice of meetingNotice accompanying this Proxy Statement, consisting of:
Proposal 1 -to approve an amendment to the Company’s certificate of (i)incorporation, as amended, (the “Certificate of Incorporation”) to effect a reverse stock split of common stock (the “Reverse Stock Split”), at a ratio in the electionrange from one-for-fifteen to one-for-fifty, with such specific ratio to be determined by the Board following the Special Meeting. The purpose of eight directors; (ii)this proposal is to enable the approvalCompany to regain compliance with the minimum per share bid price requirement of The Nasdaq Capital Market (“Nasdaq”) so that we may continue our listing on Nasdaq; and
Proposal 2 -if necessary, the adjournment of the amendmentSpecial Meeting to solicit additional proxies in favor of the 2005 IncentiveReverse Stock Plan to increase the number of shares of our common stock that can be issued pursuant thereto from 8,333,333 to 14,333,333; (iii) the approval, on a non-binding advisory basis, of the compensation of the Company’s named executive officers; (iv) the approval, on a non-binding advisory basis, of the frequency of the stockholder vote on the compensation of the Company’s named executive officers; (v) the ratification of the appointment of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2019; and (vi) such other business that may properly come before the meeting or any postponement or adjournment thereof. In addition, management
Our Board of Directors is not currently aware of any other matters which will come before the meeting.Special Meeting.
If Proposal 1 is approved by the Company’s stockholders at the Special Meeting, the Reverse Stock Split will be effected, if at all, only upon a subsequent determination by the Board of Directors that the Reverse Stock Split is in the best interests of the Company and our stockholders. The Board may make this determination as soon as immediately following the conclusion of the Special Meeting, and the Reverse Stock Split could become effective as soon as the business day immediately following the Special Meeting.
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Notwithstanding approval of the Reverse Stock Split proposal by our stockholders, the Board reserves its right to elect not to proceed with implementing the Reverse Stock Split proposal at any time prior to the date on which the amendment to our Certificate of Incorporation becomes effective under Delaware law, if it determines, in its sole discretion, that the Reverse Stock Split is no longer in the best interests of the Company or its stockholders.
Each of these proposals is described in further detail below.
Why does the Company need stockholders to vote on the Reverse Stock Split?
Our common stock and publicly traded warrants are listed on Nasdaq under the symbols “APDN” and “APDNW,” respectively. For our common stock and publicly traded warrants to continue to be listed on Nasdaq, we must meet the current continued listing requirements, including the requirements that (1) our common stock must maintain a minimum closing bid price of $1.00 pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”); and (2) we must maintain net income from continuing operations (in the latest fiscal year or two of the three last fiscal years) of at least $500,000, a market value of listed securities of at least $35 million (the “Minimum Value of Listed Securities Requirement”), or stockholders’ equity of at least $2.5 million, pursuant to Nasdaq Listing Rule 5550(b).
On January 29, 2019 and January 30, 2019, we received written notices from the Listing Qualifications Department of Nasdaq notifying us that we are not in compliance with the Minimum Bid Price Requirement as well as the Minimum Value of Listed Securities Requirement, or the alternative standards of Nasdaq Listing Rule 5550(b)(1) or 5550(b)(3) which require a company to have minimum stockholders equity of at least $2.5 million or for it to have had net income from continuing operations of at least $500,000 in the latest fiscal year or in two of the last three fiscal years, respectively.
On July 30, 2019, we received written notice from Nasdaq indicating that, based upon our continued non-compliance with the Minimum Bid Price Requirement and Minimum Value of Listed Securities Requirement, the staff of Nasdaq (the “Staff”) had determined to delist our securities (including our common stock and publicly traded warrants) from Nasdaq unless we timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”). We requested a hearing before the Panel and the hearing was held on September 19, 2019. The hearing stayed any further action by the Staff pending the ultimate conclusion of the hearing process and during the pendency of the hearing before the Panel, our listed securities remain listed on Nasdaq. As of September 26, 2019, the Panel had not made its ruling. There can be no assurance that the Panel will grant our request for continued listing on Nasdaq or that we will be able to regain compliance with the applicable listing criteria within the period of time that may be granted by the Panel. If the Panel does not grant our request for continued listing, the Board, in its discretion, may not effect the Reverse Stock Split, and the Reverse Stock Split, if it occurs, will not be sufficient to maintain our listing on Nasdaq.
The Board has determined that an amendment to our Certificate of Incorporation to effect the Reverse Stock Split is necessary to the continued listing of our common stock on Nasdaq and is in the best interests of our stockholders.
In addition to bringing the per share trading price of our common stock above $1.00, we also believe that the Reverse Stock Split will make our common stock more attractive to a broader range of institutional and other investors, as we have been advised that the current per share trading price of our common stock may affect its acceptability to certain institutional investors, professional investors and other members of the investing public. Many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. In addition, some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers.
How do proxies work and how are votes counted?
The Board of Directors is asking for your proxy. Giving us your proxy means that you authorize us to vote your shares at the AnnualSpecial Meeting in the manner you direct. You may vote for all of our director nominees or withhold your vote as to some or all of our director nominees. You may also vote for or against, or abstain from voting on the approval of the amendment of the 2005 Incentive Stock Plan to increase the number of shares of our common stock that can be issued pursuant thereto from 8,333,333 to 14,333,333, the approval, on a non-binding advisory basis, of the compensation of the Company’s named executive officers, the approval, on a non-binding advisory basis, of frequency of the stockholder vote on the compensation of the Company’s named executive officers,Proposals 1 and the ratification of our selection of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2019.2. If a stockholder of record does not indicate instructions with respect to one or more matters on his, her or its proxy, the shares represented by that proxy will be voted as recommended by the Board of Directors (for more information, see “— What are“- How does the Board of Directors’ recommendations as to the proposals to be voted on?recommend that I vote?”). If a beneficial owner of shares held in street name does not provide instructions to the bank, broker, or other nominee holding those shares, please see the information below under the caption “—“- What if I am a beneficial owner and do not give voting instructions to my broker or other nominee?nominee?”
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Who is entitled to vote at the AnnualSpecial Meeting?
Only stockholders of record at the close of business on March 19,October 4, 2019, the record date for the meeting,Record Date, are entitled to receive notice of and to participate in the AnnualSpecial Meeting, or any postponements and adjournments of the meeting. If you were a stockholder of record on that date, you will be entitled to vote all of the shares you held on that date at the meeting, or any postponements or adjournments of the meeting.
As of September 25, 2019, the record date for the meeting, there were 36,847,85748,015,938 shares of common stock outstanding. On the Record Date, there were shares of common stock outstanding. Each outstanding share of common stock is entitled to one vote on each of the matters presented at the AnnualSpecial Meeting or postponements and adjournments of the meeting.
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders of a majority of the outstanding shares of common stock as of the record dateRecord Date will constitute a quorum, permitting the AnnualSpecial Meeting to conduct its business. As of the record date, 36,847,857,Record Date, , shares of common stock, representing the same number of votes, were outstanding. Thus, the presence of holders representing at least 18,423,930 shares will be required to establish a quorum.
If a stockholder abstains from voting as to any matter or matters, the shares held by such stockholder shall be deemed present at the AnnualSpecial Meeting for purposes of determining a quorum. If a bank, broker, or other nominee returns a “broker non-vote” proxy, indicating a lack of voting instructions by the beneficial holder of the shares and a lack of discretionary authority on the part of the bank, broker, or other nominee to vote on a particular matter, then the shares covered by such broker non-vote proxy shall be deemed present at the AnnualSpecial Meeting for purposes of determining a quorum, but otherwise shall have no effect except as to any proposal with respect to which the bank, broker, or other nominee has discretionary authority to vote the proxy.effect. For more information on discretionary and non-discretionary matters,broker non-votes, see “—“- What if I am a beneficial owner and do not give voting instructions to my broker or other nominee?”
How do I attend the AnnualSpecial Meeting?
The meeting will be held on May 16,October 31, 2019 beginning at 10:9:00 a.m., local time, at the Center of Excellence in Wireless and InformationLong Island High Technology Incubator, 25 Health Sciences Drive, Stony Brook, New York 11794.11790. Directions to the Center of Excellence in Wireless and InformationLong Island High Technology Incubator can be found on our website atwww.adnas.com. The information found on, or accessible through, our website is not incorporated into, and does not form a part of, this Proxy Statement or any other report or document we file with or furnish to the SEC due to the inclusion of our website address above or elsewhere in this Proxy Statement. Information on how to vote in person at the AnnualSpecial Meeting is discussed below under the caption “— “- How can I vote my shares?” Each stockholder who wishes to attend the AnnualSpecial Meeting will be required to present valid government-issued photo identification to be admitted to the AnnualSpecial Meeting.
How can I vote my shares?
In person:
· | Record stockholders:Shares held in your name as the stockholder of record may be voted by you in person at the Special Meeting. |
· | Owners of shares held beneficially in street name:Shares held beneficially in street name may be voted by you in person at the Special Meeting only if you obtain a legal proxy from the broker, bank, or other nominee that holds your shares giving you the right to vote the shares and you bring that legal proxy with you to the Special Meeting. |
Even if you plan to attend the AnnualSpecial Meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to attend the meeting.
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By proxy:
Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the AnnualSpecial Meeting.
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote:
By Internet or by proxy over the Internet up until 11:59 P.M. Eastern Time on May 15, 2019 by followingtelephone: Follow the instructions providedincluded in the Notice. (2) You can vote by telephone up until 11:59 P.M. Eastern Time on May 15, 2019 by following instructions provided on the proxy card attached to the Proxy Statement. (3) If you have requested to receive printed proxy materials, youvote by Internet or telephone.
By mail: You can vote by mail by following instructions provided oncompleting, signing, dating and returning the proxy card attached toas instructed on the Proxy Statement. Thecard. If you sign the proxy card ifbut do not specify how you choosewant your shares voted, they will be voted in accordance with the Board’s recommendations as noted below.
In person at the meeting: If you attend the Special Meeting, you may deliver a completed proxy card in person or you may vote by completing a ballot, which will be available at the meeting.
Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on October 30, 2019.
If you return your signed proxy card to us before the Special Meeting, we will vote your shares as you direct. Whether or not you plan to attend the Special Meeting, we urge you to vote by mail, must be received priorproxy to ensure your vote is counted. You may still attend the holdingSpecial Meeting and vote in person if you have already voted by proxy.
Beneficial Owner: Shares Registered in the Name of the vote at the Annual Meeting at 10:00 AM, Eastern Time, on May 16, 2019.
If you are a beneficial owner of shares held beneficiallyregistered in street name:
Stockholders who submit a proxy through the Internet or telephone should be aware that they may incur costs to access the Internet or telephone, such as usage charges from telephone companies or Internet service providers, and that these costs mustwill not be bornereimbursed by the stockholder.
What happens if additional matters are presented at the AnnualSpecial Meeting?
Other than the items of business described in this Proxy Statement, we are not currently aware of any other business to be acted upon at the AnnualSpecial Meeting. If you grant a proxy, the persons named as proxy holders, Ms. Beth Jantzen and Ms. Judith Murrah, will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason any of the nominees is not available as a candidate for director, the persons named as proxies will vote your proxy for such other candidate or candidates as may be nominated by the Board of Directors.
How does the Board of Directors’ recommend that I vote?
As to the proposals to be voted on at the AnnualSpecial Meeting, the Board of Directors unanimously recommends that you vote:
· | FOR Proposal 1, for the approval of an amendment to our Certificate of Incorporation and authorization of the Board to effect the Reverse Stock Split; and |
· | FOR Proposal 2, for approval of a proposal for the adjournment of the Special Meeting to permit the Company to solicit additional proxies if there are insufficient proxies at the Special Meeting to approve Proposal 1. |
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What if I am a stockholder of record and do not indicate voting instructions on my proxy?
If you are a stockholder of record and provide specific instructions on your proxy with regard to certain items, your shares will be voted as you instruct on such items.If no instructions are indicated on your proxy for one or more of the proposals to be voted on, the shares will be voted as recommended by the Board of Directors:Board: (i) in favor of each of our director nominees, (ii)for Proposal 1, for the approval of thean amendment to our Certificate of Incorporation and authorization of the 2005 IncentiveBoard to effect the Reverse Stock Plan to increase the numberSplit; and (ii) for Proposal 2, for approval of shares of our common stock that can be issued pursuant thereto from 8,333,333 to 14,333,333, (iii)a proposal for the approval, on a non-binding advisory basis,adjournment of the compensation ofSpecial Meeting to permit the Company’s named executive officers, (iv) forCompany to solicit additional proxies if there are insufficient proxies at the approval, on a non-binding advisory basis,Special Meeting to hold advisory votes on the compensation of the Company’s named executive officers every three years, and (v) for the ratification of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2019.approve Proposal 1. If any other matters are properly presented for consideration at the meeting, the individuals named as proxy holders, Ms. Beth Jantzen and Ms. Judith Murrah, will vote the shares that they represent on those matters as recommended by the Board of Directors.Board. If the Board of Directors does not make a recommendation, then they will vote in accordance with their best judgment.
What if I am a beneficial owner and do not give voting instructions to my broker or other nominee?
As a beneficial owner, in order to ensure your shares are voted in the way you would like, you must provide voting instructions to your bank, broker, or other nominee by the deadline provided in the materials you receive from your bank, broker, or other nominee or vote by mail, telephone or Internet according to instructions provided by your bank, broker, or other nominee.If you do not provide voting instructions
The approval of Proposal 1, an amendment to your bank, broker, or other nominee, whether your shares can be voted by such person or entity depends onour Certificate of Incorporation and authorization of the type of item being considered for vote.
We encourage you to provide instructions to your broker regarding the voting of your shares.
Can I change my vote or revoke my proxy?
Yes. (1) If you are a stockholder of record, you may revoke your proxy by (i) following the instructions on the Noticeproxy card and entering a new vote by telephone or over the Internet up until 11:59 P.M.p.m. Eastern Time on May 15,October 30, 2019, (ii) attending the AnnualSpecial Meeting and voting in person (although attendance at the AnnualSpecial Meeting will not in and of itself revoke a proxy) or (iii) entering a new vote by mail. Any written notice of revocation or subsequent proxy card must be received by the Secretary of the Company prior to the holding of the vote at the AnnualSpecial Meeting at 10:9:00 AM,a.m., Eastern Time, on May 16,October 31, 2019. Such written notice of revocation or subsequent proxy card should be hand delivered to the Secretary of the Company or sent to the Company’s principal executive offices at 50 Health Sciences Drive, Stony Brook, New York 11790, Attention: Corporate Secretary. (2) If a broker, bank, or other nominee holds your shares, you must contact them in order to find out how to change your vote.
The last proxy or vote that we receive from you will be the vote that is counted.
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Who will bear the cost of soliciting votes for the AnnualSpecial Meeting?
We will pay the entire cost of preparing, assembling, printing, mailing, and distributing these proxy materialsProxy Materials and soliciting votes. If you choose to access the proxy materialsProxy Materials and/or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. In addition to the mailing of these proxy materials,Proxy Materials, the solicitation of proxies or votes may be made in person, by telephone, or by electronic communication by our directors, officers, and employees, who will not receive any additional compensation for such solicitation activities. We have engaged Kingsdale Advisors to assist in soliciting proxies on our behalf. Kingsdale Advisors may solicit proxies personally, electronically or by telephone. We have agreed to pay Kingsdale Advisors a fee of $9,000 for its services. We have also agreed to reimburse Kingsdale Advisors for its reasonable out-of-pocket expenses and to indemnify Kingsdale Advisors and its employees against certain liabilities arising from or in connection with the engagement.
What is “householding” and where can I get additional copies of proxy materials?
For information about householding and how to request additional copies of proxy materials,Proxy Materials, please see the section captioned “Householding“Householding of Proxy Materials.Materials.”
Whom may I contact if I have other questions about the AnnualSpecial Meeting or voting?
You may contact the Company at 50 Health Sciences Drive, Stony Brook, New York 11790, Attention: Beth Jantzen, or by telephone at 631-240-8800 or you may contact Kingsdale Advisors by telephone at 1-855-682-9644.
Where can I find the voting results of the AnnualSpecial Meeting?
We will announce preliminary voting results at the AnnualSpecial Meeting. Voting results will be disclosed on a Form 8-K filed with the SEC within four business days after the AnnualSpecial Meeting, which will also be available on our website.
The Notice and the Proxy Statement instruct you to vote by proxy over the Internet by following the instructions provided in the Notice, or, ifon how you requested to receive printed proxy materials, you can alsomay submit your vote by mail, the Internet, toll-free number, or telephone pursuant to instructions provided on the proxy card.
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PROPOSAL 1
To APPROVE THE AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION EFFECTING THE REVERSE STOCK SPLIT IN THE RANGE FROM ONE-FOR-FIFTEEN TO ONE-FOR-FIFTY
Introduction
At the Special Meeting, to serve until the 2020 Annual Meeting of Stockholders, or until their respective successors are elected and qualified. All of the nominees are our current directors and have been nominated for re-election by our Board of Directors. The Company intends that the proxy in the form presentedstockholders will be voted, unless otherwise indicated, forasked to approve an amendment (the “Amendment”) to the election of these nominees to serve until the 2020 Annual Meeting of Stockholders, or until their successors are elected and qualified. OurCompany’s Certificate of Incorporation provides that will effect the Reverse Stock Split at a ratio in the range from one-for-fifteen to one-for-fifty, with such specific ratio to be determined by the Company’s Board following the Special Meeting(the “Reverse Stock Split Ratio”). Upon the effectiveness of the Amendment (the “Split Effective Time”), the issued shares of common stock outstanding immediately prior to the Split Effective Time will be reclassified into a smaller number of shares. The ultimate Reverse Stock Split Ratio will be based on a number of factors, including market conditions, existing and expected trading prices for the common stock and the listing requirements of Nasdaq.
The proposed Amendment to effect the Reverse Stock Split is attached as theAppendix to this Proxy Statement. The form of the Amendment, as more fully described below, will effect the reverse stock split but will not change the number of directors that constituteauthorized shares of common stock or preferred stock, or the whole Board of Directors shall be fixed exclusively in the manner designated in the Company’s Bylaws. The Company’s Bylaws provide that the number of directors is determined by resolutionpar value of the common stock or preferred stock. The following discussion is qualified in its entirety by the full text of the Amendment, which is incorporated herein by reference.
Purpose
The Board approved the proposal approving the Amendment for the following reasons:
● | the Board believes that the Reverse Stock Split is the best option available to the Company to increase its stock price as required for continued listing on Nasdaq; | |
● | the Board believes a higher stock price may help generate investor interest in the Company and help the Company attract and retain employees; and | |
● | if the Reverse Stock Split successfully increases the per share price of the common stock, the Board believes this increase may increase trading volume in the common stock and facilitate future financings by the Company. |
Reasons for the Reverse Stock Split and Nasdaq Listing Requirements
Our common stock and publicly traded warrants are listed on Nasdaq under the symbols “APDN” and “APDNW,” respectively. For our common stock and publicly traded warrants to continue to be listed on Nasdaq, we must meet the current continued listing requirements, including the requirements that (1) our common stock must maintain the Minimum Bid Price Requirement; and (2) we must maintain net income from continuing operations (in the latest fiscal year or two of Directors, provided that the Board of Directors shall consistthree last fiscal years) of at least one member.
On January 29, 2019 and January 30, 2019, we received written notices from the Listing Qualifications Department of Nasdaq notifying us that we are not in compliance with the Minimum Bid Price Requirement as well as the Minimum Value of Listed Securities Requirement, or the alternative standards of Nasdaq Listing Rule 5550(b)(1) or 5550(b)(3) which require a company to have minimum stockholders equity of at least $2.5 million or for it to have had net income from continuing operations of at least $500,000 in the latest fiscal year or in two of the last three fiscal years.
On July 11, 2011, Delabarta, Inc. (“Delabarta30, 2019, we received written notice from Nasdaq indicating that, based upon our continued non-compliance with the Minimum Bid Price Requirement and Minimum Value of Listed Securities Requirement, the staff of Nasdaq (the “Staff”), had determined to delist our securities (including our common stock and publicly traded warrants) from Nasdaq unless we timely requested a wholly owned subsidiaryhearing before the Nasdaq Hearings Panel (the “Panel”). We requested a hearing before the Panel and the hearing was held on September 19, 2019. The hearing stayed any further action by the Staff pending the ultimate conclusion of ABARTA, Inc. (“ABARTA”), participated as an investorthe hearing process and during the pendency of the hearing before the Panel, our listed securities remain listed on Nasdaq. As of September 26, 2019, the Panel had not made its ruling. There can be no assurance that the Panel will grant our request for continued listing on Nasdaq or that we will be able to regain compliance with the applicable listing criteria within the period of time that may be granted by the Panel. To regain compliance with the Minimum Bid Price Requirement, the bid price of the common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive trading days. If the Panel does not grant our request for continued listing, the Board, in its discretion, may not effect the Company’s private placementReverse Stock Split, and the Reverse Stock Split, if it occurs, will not be sufficient to maintain our listing on Nasdaq.
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The Board has determined that the Amendment to effect the Reverse Stock Split is necessary to the continued listing of our common stock on Nasdaq and is in the best interests of our stockholders.
In addition to bringing the per share trading price and closing bid price of our common stock back above $1.00, we also believe that the Reverse Stock Split will make our common stock more attractive to a broader range of institutional and other investors, as describedwe have been advised that the current per share trading price of our common stock may affect its acceptability to certain institutional investors, professional investors and other members of the investing public. Many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. In addition, some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers.
If we were unable to maintain compliance with the Minimum Bid Price Requirement and our common stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQX, the OTCQB or the OTC Pink markets maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our Current Reportcommon stock. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our common stock, causing the value of an investment in us to decrease and having an adverse effect on Form 8-K filedour business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital.
Reverse Stock Split Ratio
If approved by stockholders, this Reverse Stock Split proposal would permit (but not require) the Board to effect a Reverse Stock Split of our common stock at any time beforeDecember 31, 2019by theReverse Stock Split Ratio, with the SEC on July 15, 2011. In connectionspecific ratio to be fixed within this range by the Board in its sole discretion without further stockholder approval. We believe that enabling the Board to fix the specificReverse Stock Split Ratiowithin the stated range will provide us with the investmentflexibility to implement it in a manner designed to maximize the anticipated benefits for our stockholders. In fixing theReverse Stock Split Ratio, the Board may consider, among other things, factors such as:
· | the total number of shares of common stock outstanding; |
· | Nasdaq requirements for the continued listing of common stock; |
· | the historical trading price and trading volume of common stock; |
· | the then prevailing trading price and trading volume for common stock; |
· | the anticipated impact of the Reverse Stock Split on the trading price of and market for common stock; |
· | the administrative and transaction costs associated with potential exchange ratios; |
· | potential financing opportunities; and |
· | prevailing general market and economic conditions. |
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The Board will have sole discretion as to any implementation of, and the exact timing and actual Reverse Stock Split Ratio of, the Reverse Stock Split within the range of Reverse Stock Split Ratios specified in this proposal and before December 31, 2019. The Board may also determine that the Reverse Stock Split is no longer in the best interests of the Company and its stockholders and decide to abandon the Reverse Stock Split at any time before, during or after the Special Meeting and prior to its effectiveness, without further action by Delabarta, we agreedthe stockholders.
Effectiveness of the Reverse Stock Split
If approved by our stockholders, the Reverse Stock Split would become effective upon the filing of the Amendment with the Secretary of State of the State of Delaware, or at the later time set forth in the Amendment, which will constitute the Split Effective Time.The exact timing of the Amendment will be determined by the Board based on its evaluation as to use best efforts to nominate its designee, Mr. John Bitzer, IIIwhen such action will be the most advantageous to the Company and its stockholders. In addition, the Board of Directorsreserves the right, notwithstanding stockholder approval and elect Mr. Bitzer as a director within 30 dayswithout further action by the stockholders, to abandon the Amendment and the Reverse Stock Split if, at any time prior to the effectiveness of the closing and to nominate and include Mr. Bitzer onfiling of the slateAmendment with the Secretary of nominees forState of the State of Delaware, the Board, in its sole discretion, determines that it is no longer in our best interest and the best interests of Directors for electionour stockholders to proceed.
The proposed form of Amendment to effect the Reverse Stock Split is attached as theAppendix to this Proxy Statement. Any Amendment to effect the Reverse Stock Split will include the Reverse Stock Split Ratio fixed by stockholders at the annual meetings of stockholders for so long as Delabarta owns at least 2%Board, within the range approved by the stockholders.
Potential Market Effects of the Reverse Stock Split
The Reverse Stock Split proposal is intended primarily to increase the Company’s per share bid price and satisfy the Minimum Bid Price Requirement. Reducing the number of outstanding shares of common stock.
Reducing the number of outstanding shares of common stock through a Reverse Stock Split is intended, absent other factors, to increase the per share market price of our common stock. The market price of our common stock will also be unablebased on and may be adversely affected by our performance, financial results market conditions, the market’s perception of our business and other factors which are unrelated to accept nominationthe number of shares outstanding. As a result, there can be no assurance that the Reverse Stock Split, if completed, will result in the intended benefits described above, that the market price of our common stock will increase following the Reverse Stock Split or electionthat the market price of the common stock will not decrease in the future. Additionally, Applied DNA Sciences cannot assure you that the market price per share of common stock after a Reverse Stock Split will increase in proportion to the reduction in the number of shares of common stock outstanding before the Reverse Stock Split. In addition, the Reverse Stock Split may not result in a market price per share that will attract certain segments of the institutional investor community and the investing public that previously refrained from investing in Applied DNA Sciences because of the low market price of common stock, especially if we are listed on the OTCQB or OTC Pink markets. If the Reverse Stock Split is effected and the market price of common stock declines, the percentage decline as an absolute number and as a director,percentage of the individuals namedoverall market capitalization of Applied DNA Sciences may be greater than would occur in the absence of a Reverse Stock Split. Furthermore, the liquidity of common stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse Stock Split.
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In evaluating the Reverse Stock Split proposal, in addition to the considerations described above, the Board also took into account various negative factors associated with Reverse Stock Splits generally. These factors include: the negative perception of Reverse Stock Splits held by some investors, analysts and other stock market participants; the fact that the stock price of some companies that have effected Reverse Stock Splits has subsequently declined in share price and corresponding market capitalization; the adverse effect on liquidity that might be caused by a reduced number of shares outstanding; and the costs associated with implementing a Reverse Stock Split.
Potential Increased Investor Interest
On September 25, 2019, the Company’s common stock closed at $0.24 per share. On October 4, 2019, the Company’s common stock closed at $ per share. An investment in the common stock may not appeal to brokerage firms that are reluctant to recommend lower priced securities to their clients. Investors may also be dissuaded from purchasing lower priced stocks because the brokerage commissions, as proxya percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks. Also, the Board believes that most investment funds are reluctant to invest in lower priced stocks. The Board believes that the anticipated higher market price expected to result from a Reverse Stock Split will reduce, to some extent, the negative effects of the practices of brokerage houses and investors described above on the liquidity and marketability of the common stock.
There are risks associated with the Reverse Stock Split, including that the Reverse Stock Split may not result in an increase in the per share price of the common stock. The Company cannot predict whether the Reverse Stock Split will increase the market price for the common stock. The history of similar stock split combinations for companies in like circumstances is varied. There is no assurance that:
● | the market price per share of the common stock after the Reverse Stock Split will rise in proportion to the reduction in the number of shares of the common stock outstanding before the Reverse Stock Split; | |
● | the Reverse Stock Split will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks; | |
● | the Reverse Stock Split will result in a per share price that will increase the ability of the Company to attract and retain employees; | |
● | the market price per share will either exceed or remain in excess of $1.00, the Minimum Bid Price Requirement by Nasdaq for continued listing; or | |
● | the Company would otherwise meet the Nasdaq listing requirements even if the per share market price of the common stock after the Reverse Stock Split meets the Minimum Bid Price Requirement. |
The market price of the common stock will also be based on the Company’s performance and other factors, some of which are unrelated to the number of shares outstanding. If the Reverse Stock Split is effected and the market price of the common stock declines, the percentage decline as an absolute number and as a percentage of the overall market capitalization of the Company may be greater than would occur in the absence of a Reverse Stock Split. Furthermore, the liquidity of the common stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse Stock Split.
Potential Effects of Proposed Amendment
If our stockholders approve the Reverse Stock Split and the Board effects it, the number of shares of common stock issued and outstanding will be reduced, depending upon the Reverse Stock Split Ratio determined by the Board. The Reverse Stock Split will affect all holders Ms. Beth Jantzenof our common stock uniformly and Ms. Judith Murrah, will votenot affect any stockholder’s percentage ownership interest in the Company, except that, as described below in “Fractional Shares,” holders of our common stock otherwise entitled to a fractional share as a result of the Reverse Stock Split because they hold a number of shares not evenly divisible by the Reverse Stock Split Ratio will, in lieu of a fractional share, receive one whole share of common stock. In addition, the Reverse Stock Split will not affect any stockholder’s proportionate voting power (subject to the treatment of fractional shares).
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The Reverse Stock Split alone would have no effect on our authorized capital stock, and the total number of authorized shares would remain the same as before the Reverse Stock Split. This would have the effect of increasing the number of shares of our common stock available for issuance. The additional available shares would be available for issuance from time to time at the discretion of the Board when opportunities arise, without further stockholder action or the related delays and expenses, except as may be required for a particular transaction by law, the rules of any exchange on which our securities may then be listed, or other agreements or restrictions (including rights of first refusal, pursuant to the terms of certain of our outstanding secured convertible notes). Any issuance of additional shares of our common stock would increase the number of outstanding shares of our common stock and (unless such issuance was pro-rata among existing stockholders) the percentage ownership of existing stockholders would be diluted accordingly. In addition, any such issuance of additional shares of our common stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of our common stock.
In addition to sales of our common stock, if our stockholders approve the Reverse Stock Split and the Board effects it, the additional available shares of our common stock would also be available for conversions of convertible securities that we may issue, acquisition transactions, strategic relationships with corporate and other partners, stock splits, stock dividends and other transactions that may contribute to the growth of our business. Any decision to issue equity will depend on, among other things, our evaluation of funding needs, developments in business and technologies, current and expected future market conditions and other factors. There can be no assurance, however, even if the Reverse Stock Split is approved and implemented, that any financing transaction or other transaction would be undertaken or completed.
The Reverse Stock Split will not change the terms of our common stock. After the Reverse Stock Split, the shares that they represent for such other persons asof common stock will have the Board of Directors may recommend. The Board of Directors has no present knowledge that any of the nominees for director named belowsame voting rights and rights to dividends and distributions and will be unavailableidentical in all other respects to serve.
The directors standing for re-election, together with their ages asReverse Stock Split may result in some stockholders owning “odd-lots” of March 19, 2019less than 100 shares of common stock. Brokerage commissions and certain other information, are:
Director | | | Age | | | Year First Became Director | | | Principal Occupation and Other Board of Directors Service During the Past Five Years | |
James A. Hayward, Ph.D., Sc.D. | | | 65 | | | 2006 | | | Dr. James A. Hayward has been our Chief Executive Officer since March 17, 2006 and our President and the Chairman of the Board of Directors since June 12, 2007. He was previously our acting Chief Executive Officer since October 5, 2005. He also served as Acting Chief Financial Officer from August 20, 2013 through October 13, 2013. Dr. Hayward received his Ph.D. in Molecular Biology from the State University of New York at Stony Brook in 1983 and an honorary Doctor of Science from the same institution in 2000. His experience with public companies began with the co-founding of one of England’s first biotechnology companies — Biocompatibles. Following this, Dr. Hayward was Head of Product Development for the Estee Lauder companies for five years. In 1990 he founded The Collaborative Group, a provider of products and services to the biotechnology, pharmaceutical and consumer-product industries based in Stony Brook, where he served as Chairman, President and Chief Executive Officer for 14 years. During this period, The Collaborative Group created several businesses, including The Collaborative BioAlliance, a contract developer and manufacturer of human gene products that was sold to Dow Chemical in 2002, and Collaborative Labs, a service provider and manufacturer of ingredients for skincare and dermatology that was sold to Engelhard (now BASF) in 2004. Dr. Hayward also serves on the board of directors for the Regents Council, Softheon Corporation and NeoMatrix Formulations, Inc. Dr. Hayward’s experience and senior | |
Director | | | Age | | | Year First Became Director | | | Principal Occupation and Other Board of Directors Service During the Past Five Years | |
| | | | | | | | | leadership positions in companies in the biotechnology, pharmaceutical and consumer-product industries, and specifically his qualifications and skills in the areas of general operations, financial operations and administration, as well as his role as the Company’s Chief Executive Officer and President led the Board of Directors to conclude that Dr. Hayward should serve as a director of the Company. | |
John Bitzer, III | | | 58 | | | 2011 | | | John Bitzer, III, joined the Board of Directors on August 10, 2011. Mr. Bitzer is President and Chief Executive Officer of ABARTA, a private, third and fourth generation family holding-company with operations in the soft drink, energy, and frozen food industries. In 1985, Mr. Bitzer began his career in sales for the Cleveland Coca-Cola Bottling Company. He has been Publisher of Atlantic City Magazine in Atlantic City, N.J. In 1994, he founded the ABARTA Media Group and held the position of Group Publisher. In 1997, he was named President and Chief Operating Officer of ABARTA and has been President and Chief Executive Officer since 1999. Mr. Bitzer has a bachelor’s degree from the University of Southern California and a Masters of Business Administration (“MBA”) from the University of Michigan. Mr. Bitzer’s experience as an executive officer and director of several private companies and organizations led the Board of Directors to conclude that he should serve as a director of the Company. | |
Robert B. Catell | | | 82 | | | 2016 | | | Robert B. Catell was appointed to the Board of Directors on October 7, 2016. Since 2006, Mr. Catell has been serving as Chairman of the Advanced Energy Research and Technology Center (AERTC) at Stony Brook University and since 2009 he has been servicing as the Chairman of the New York State Smart Grid Consortium. He served on the Board of Directors of New York State Energy Research & Developmental Authority. Among other accomplishments, Mr. Catell was formerly Chairman and CEO of KeySpan Corporation and KeySpan Delivery (formerly Brooklyn Union Gas), and Chairman of National Grid, U.S. and Deputy Chairman of National Grid plc, upon National Grid’s acquisition of KeySpan. He also serves on the board of several business and not-for-profit organizations, including public company BioRestorative Therapies, Inc. He has been Chairman of Applied DNA Sciences’ Strategic Advisory Board of Directors since its inception in February 2016. Mr. Catell holds both a Master’s and Bachelor’s degree in Mechanical Engineering from City College of New York and is a registered Professional Engineer. He has attended Columbia University’s Executive Development Program, and the Advanced Management Program at the Harvard Business School. Mr. Catell’s extensive executive-level management experience, including as a director at other private and public companies and within regulated and technical industries, qualifies him to serve as one of our directors. | |
Joseph D. Ceccoli | | | 56 | | | 2014 | | | Joseph D. Ceccoli was appointed to the Board of Directors on December 3, 2014. Since 2010, Mr. Ceccoli has been the Founder, President and CEO of Biocogent, LLC (“Biocogent”), a bioscience company located at the | |
Director | | | Age | | | Year First Became Director | | | Principal Occupation and Other Board of Directors Service During the Past Five Years | |
| | | | | | | | | Stony Brook Long Island High Technology Incubator. Biocogent is focused on the invention, development and commercialization of skin-active molecules and treatment products used in regulated (over-the-counter/med-care), personal care and consumer products. Prior to starting Biocogent, Mr. Ceccoli was Global Director of Operations for BASF Corporation, a global Fortune 100 company and the world’s largest global chemical company, where he was responsible for the integration, operations and growth of domestic and overseas business units from 2007 to 2008. Prior to BASF, Mr. Ceccoli was a General Manager for Engelhard Corporation, a U.S.-based Fortune 500 company and chief operating officer of Long Island-based The Collaborative Group from 2004 to 2007. Mr. Ceccoli holds a Bachelor of Science (“B.S.”) degree in Biotechnology from Rochester Institute of Technology and advanced professional training in various pharmaceutical sciences, emulsion chemistry, engineering and management disciplines. He is a member of numerous professional organizations such as the American Chemical Society and the Society of Cosmetic Chemists. Mr. Ceccoli’s experience across the bioscience and chemical markets, including in global and U.S.-based operations and management, enriches our Board of Directors. Mr. Ceccoli’s experience as an executive officer and director of several bioscience and chemical companies and organizations led the Board of Directors to conclude that he should serve as a director of the Company. | |
Charles S. Ryan | | | 54 | | | 2011 | | | Dr. Charles S. Ryan joined the Board of Directors on August 10, 2011. On December 14, 2017, Dr. Ryan entered into an employment agreement with Neurotrope BioScience pursuant to which he agreed to serve as its Chief Executive Officer commencing February 15, 2018. In addition, Dr. Ryan became a member of Neurotrope’s Board of Directors effective December 14, 2017. Since October 2016, he has been Chief Executive Officer of Orthobond Corporation. In August 2017, he was appointed President and Chief Executive Officer of Orthobond Corporation. He will cease to be the President and Chief Executive Officer of Orthobond Corporation on February 14, 2018. From March 2015 until October 2016, Dr. Ryan was Vice President and General Counsel for Cold Spring Harbor Laboratory, a preeminent international research institution. Prior to that, Dr. Ryan was the Senior Vice President, and Chief Intellectual Property Counsel at Forest Laboratories, where he was employed from 2003 to 2014. Dr. Ryan has over 20 years’ experience in managing all aspects of intellectual property litigation, conducting due diligence investigations and prosecuting patent and trademark applications in the pharmaceutical and biotechnology industries. Dr. Ryan earned a doctorate in oral biology and pathology from SUNY Stony Brook and a law degree from Western New England College School of Law. | |
| | | | | | | | | Our Board believes that Dr. Ryan’s expertise as Chief Executive Officer for a medical device company, as well as general counsel for a preeminent international research institution and former chief intellectual property counsel at a global company makes him an important contributor to the Board. | |
Director | | | Age | | | Year First Became Director | | | Principal Occupation and Other Board of Directors Service During the Past Five Years | |
Yacov A. Shamash | | | 69 | | | 2006 | | | Dr. Yacov A. Shamash has been a member of the Board of Directors since March 17, 2006. Dr. Shamash is Vice President of Economic Development at the State University of New York at Stony Brook, a position he has held since 2000. From 1992 to 2015, he was the Dean of Engineering and Applied Sciences, and from 1995 to 2004, Dr. Shamash was also the Dean of the Harriman School for Management and Policy at the University. He was founder of the New York State Center for Excellence in Wireless and Information Technology at the University. Dr. Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the board of directors of public companies Comtech Telecommunications Corp. and Keytronic Corp. Dr. Shamash holds a Ph.D. degree in Electrical Engineering from Imperial College of Science and Technology in London, England. Dr. Shamash daily encounters leaders of businesses large and small, regional and global in their reach and, as a member of our Board of Directors, has played an integral role in our business development by providing the highest-level introductions to customers, channels to market and to the media. Dr. Shamash also brings to our Board of Directors his valuable experience gained from serving as a director at other private and public companies. The Board of Directors believes that Dr. Shamash’s technical experience and other abilities make him a valuable member of the Board of Directors. | |
Sanford R. Simon | | | 76 | | | 2006 | | | Dr. Sanford R. Simon has been a member of the Board of Directors since March 17, 2006. Dr. Simon has been a Professor of Biochemistry, Cell Biology and Pathology at Stony Brook since 1997. He joined the faculty at Stony Brook as an Assistant Professor in 1969 and was promoted to Associate Professor with tenure in 1975. Dr. Simon was a member of the board of directors of The Collaborative Group from 1995 to 2004. From 1967 to 1969, Dr. Simon was a Guest Investigator at Rockefeller University. Dr. Simon received a B.A. in Zoology and Chemistry from Columbia University in 1963, a Ph.D. in Biochemistry from Rockefeller University in 1967, and studied as a postdoctoral fellow with Nobel Prize winner Max Perutz in Cambridge, England. He maintains an active research laboratory studying aspects of cell invasion in cancer and inflammation and novel strategies of drug delivery; he also teaches undergraduate, graduate, medical and dental students. Dr. Simon is an expert at the use of large biomolecules in commercial media, and we have made use of his expertise in formulating DNA into commercial carriers for specific customers. As a member of our Board of Directors, Dr. Simon has advised us on patents, provided technical advice, and introduced us to corporate partners and customers. The Board of Directors believes that Dr. Simon’s advice makes him a valuable member of the Board of Directors. | |
Director | | | Age | | | Year First Became Director | | | Principal Occupation and Other Board of Directors Service During the Past Five Years | |
Elizabeth M. Schmalz Ferguson | | | 68 | | | 2017 | | | Ms. Elizabeth M. Schmalz Ferguson has been a member of the Board of Directors since June 2017. She has served as President of American Flavors & Fragrances, a fragrance company, since 2007. Ms. Ferguson also serves as President of her own consulting firm, Betsy Schmalz Ferguson & Associates. She served as Senior Vice President of Corporate Product Development at Estée Lauder. Ms. Ferguson’s responsibilities included overseeing product development for some of the company’s most prominent brands. Subsequently, she was Executive Vice President of Product Development at Bath and Body Works and Victoria’s Secret for The Limited. Ms. Ferguson started her senior management career at Revlon with responsibility for new product development for companies including Borghese, Ultima II and Prestige fragrances. She is an active member of Cosmetic Executive Women. She earned a bachelor’s degree in psychology from Georgian Court University. Ms. Ferguson’s track record of accomplishments as a strategist and products leader within the cosmetics and personal care industries led the Board of Directors to conclude she should serve as a director of the Company. | |
After the Split Effective Time, the Company will continue to become a director or executive officer.
After the Split Effective Time, the post-split market price of our equity securities registered pursuant to Section 12 of the Exchange Act to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than 10% beneficial owners (“10% stockholders”) also are required by SEC rules to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of such forms filed with the SEC with respect to the fiscal year ended September 30, 2018, as the casecommon stock may be and upon written representations from these reporting persons, we believe that none of our officers, directors or 10% stockholders failed to file on a timely basis, reports required by Section 16(a) during fiscal 2018, except as follows: Drs. Hayward and Shamash, Messrs. Bitzer and Catell, and Mses. Ferguson and Murrah each made one late filing on October 9, 2018, each forless than the purchase of a secured convertible note on August 31, 2018.
Beneficial Holders of Common Stock
Upon the implementation of the Reverse Stock Split, Applied DNA Sciences intends to treat shares held by stockholders through a stockbroker, bank or other nominee in the same manner as registered stockholders whose shares are registered in their names. Stockbrokers, banks or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding common stock in street name. However, these stockbrokers, banks or other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split. Stockholders who hold shares of common stock with a stockbroker, bank or other nominee and who have any questions in this regard are encouraged to contact their stockbrokers, banks or other nominees.
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Registered “Book-Entry” Holders of Common Stock
Certain registered holders of common stock may hold some or all of their shares electronically in book-entry form with our transfer agent. These stockholders do not have stock certificates evidencing their ownership of the common stock. They are, however, provided with statements reflecting the number of shares registered in their accounts. Stockholders who hold shares electronically in book-entry form with our transfer agent will not need to take action to receive evidence of their shares of post-Reverse Stock Split common stock.
Holders of Certificated Shares of Common Stock
Stockholders holding shares of our common stock in certificated form will be sent a transmittal letter by our transfer agent after the effective time of the Reverse Stock Split. The letter of transmittal will contain instructions on how a stockholder should surrender his, her or its certificate(s) representing shares of our Common Stock (the “Old Certificates”) to the 2005 Incentivetransfer agent. Unless a stockholder specifically requests a new paper certificate or holds restricted shares, upon the stockholder’s surrender of all of the stockholder’s Old Certificates to the transfer agent, together with a properly completed and executed letter of transmittal, the transfer agent will register the appropriate number of shares of post-Reverse Stock Plan that will increaseSplit common stock electronically in book-entry form and provide the totalstockholder with a statement reflecting the number of shares of common stock that can be issued under the 2005 Incentive Stock Plan from 8,333,333 shares to 14,333,333 shares (the “Plan Amendment”). Other than as set forthregistered in the preceding sentence, the 2005 Incentive Stock Plan after the Plan Amendment is substantially similarstockholder’s account. No stockholder will be required to the 2005 Incentive Stock Plan without the inclusion of the Plan Amendment. The effectiveness of the Plan Amendment is subjectpay a transfer or other fee to approvalexchange his, her or its Old Certificates. Until surrendered, we will deem outstanding Old Certificates held by the Company’s stockholders at the Annual Meeting. Our executive officers and directors have an interest in the Plan Amendment because they are eligible for awards under the 2005 Incentive Stock Plan.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional Shares
Applied DNA Sciences will not issue fractional shares in connection with the Reverse Stock Split. Instead stockholders who would otherwise be entitled to receive a fractional share as a result of the Reverse Stock Split will receive one whole share of our directors, executivescommon stock in lieu of such fractional share.
Effect of the Reverse Stock Split on Stock Option Awards and other key personnel after December 31, 2019. The Board of Directors believes this would present serious challengesEquity Incentive Plans
Based upon the Reverse Stock Split Ratio, proportionate adjustments are generally required to our abilitybe made to attract and retain management and other key personnel and would be detrimental to our businessthe per share exercise price or the per share base price and the interestsnumber of our stockholders. Accordingly, our Boardshares issuable upon the exercise of Directors recommends the approval of the Plan Amendment.
Effect of the Reverse Stock Split on Warrants and Convertible Notes
In addition to adjusting the number of shares of our common stock, we would adjust all shares underlying any of our outstanding warrants and secured convertible notes as a result of the Reverse Stock Split, as required by the terms of these securities. In particular, we would reduce the conversion ratio for each instrument, and would increase the applicable exercise price or conversion price in accordance with the terms of each instrument and based on the Reverse Stock Split Ratio.
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Accounting Matters
The proposed Amendment will not affect the par value of $0.001 of our common stock. As a result, at the Split Effective Time, the stated capital on our balance sheet attributable to the common stock will be reduced in the same proportion as the Reverse Stock Split Ratio, and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. The per share net income or loss and net book value of the common stock will be reclassified for prior periods to conform to the post-Reverse Stock Split presentation.
Pro Forma Capitalization of Common Stock
The table below summarizes the Company’s pro forma capitalization of common stock, as of September 25, 2019, before and after giving effect to a hypothetical reverse stock split of one-for-fifteen (1-for-15), one-for-twenty (1-for-20), one-for-twenty-five (1-for-25), one-for-thirty (1-for-30), one-for-thirty-five (1-for-35), one-for-forty (1-for-40), one-for-forty-five (1-for-45) and one-for-fifty (1-for-50). The table below does not include the 10,000,000 shares of preferred stock authorized under the Certificate of Incorporation, none of which is currently outstanding. The Reverse Stock Split alone would have no effect on our authorized capital stock, including our authorized preferred stock. For purposes of the figures below, share numbers have been rounded down to the nearest whole share.
Prior to Reverse | After Reverse Stock Split | ||||||||||||||||||
Stock Split | 1-for-15 | 1-for-20 | 1-for-25 | 1-for-30 | 1-for-35 | 1-for-40 | 1-for-45 | 1-for-50 | |||||||||||
Authorized Shares of Common Stock | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||||||||||
Shares of Common Stock Issued and Outstanding(1) | 48,015,938 | 3,201,063 | 2,400,797 | 1,920,638 | 1,600,531 | 1,371,884 | 1,200,398 | 1,067,021 | 960,319 | ||||||||||
Shares of Common Stock Reserved for Future Issuance but not Issued and Outstanding(1)(2) | 27,078,384 | 1,805,226 | 1,353,919 | 1,083,135 | 902,613 | 773,668 | 676,960 | 601,742 | 541,568 | ||||||||||
Shares of Common Stock Available for Future Issuance(1) | 424,905,678 | 494,993,711 | 496,245,284 | 496,996,227 | 497,496,856 | 497,854,448 | 498,122,642 | 498,331,237 | 498,498,113 |
(1) These estimates do not reflect the potential effects of rounding up of fractional shares that may be issued pursuant to awards made underresult from the Plan to any individual in any calendar year is 833,334.
(2) Includes, as of March 19,September 25, 2019, a total(i) 10,543,527 shares issuable upon the exercise of 275,752 shares have been issued under the 2005 Incentive Stock Plan and options to purchase an additional 6,654,748 shares have been granted. The outstanding options hadwarrants at a weighted average exercise price of $3.08. As$3.28; (ii) 7,972,504 shares issuable upon the exercise of March 19, 2019, we had 1,402,833 remainingoutstanding stock options, at a weighted average exercise price of $2.49; (iii) 5,563,759 shares available for issuance under the 2005 Incentive Stock Plan (assuming all of the shares subject to outstanding
Material U.S. Federal Income Tax Consequences of the 2005 IncentiveReverse Stock Plan.Split
The following discussion is a summary of the material U.S. federal income tax consequences of the proposed Reverse Stock Split to U.S. Holders (as defined below) of common stock. This discussion is based on the Code, U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the Internal Revenue Service (“IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a holder of common stock. Applied DNA Sciences has not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the proposed Reverse Stock Split.
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For purposes of this discussion, a “U.S. Holder” is a beneficial owner of common stock that, for U.S. federal income tax purposes, is or is treated as:
· | an individual who is a citizen or resident of the United States; |
· | a corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia; |
· | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
· | a trust that (1) is subject to the primary supervision of a U.S. court and all substantial decisions of which are subject to the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person for U.S. federal income tax purposes. |
This discussion is limited to U.S. Holders who hold their common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a U.S. Holder, including the impact of the alternative minimum tax or the Medicare contribution tax on net investment income or the application of the constructive sale provisions of the Code, the “qualified small business stock” provisions of Section 1202 of the Code, the “Section 1244 stock” provisions of Section 1244 of the Code, or special rules relevant to tax-qualified retirement plans. In addition, it does not address consequences relevant to U.S. Holders that are subject to special rules, including, without limitation:
· | persons who are not U.S. Holders; |
· | U.S. Holders whose functional currency is not the U.S. dollar; |
· | persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
· | banks, insurance companies and other financial institutions; |
· | real estate investment trusts or regulated investment companies; |
· | brokers, dealers or traders in securities; |
· | tax-exempt organizations or governmental organizations; and |
· | persons who actually or constructively own 10% or more of our voting stock. |
If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships (and other entities treated as partnerships for U.S. federal income tax purposes) holding common stock and the partners in such entities should consult their tax advisors regarding the U.S. federal income tax consequences of the proposed Reverse Stock Split to them.
In addition, the following discussion does not address the U.S. federal estate and gift tax laws or any applicable state, local or non-U.S. tax law consequences of the proposed Reverse Stock Split. Furthermore, the following discussion does not address any tax consequences of transactions effected before, after or at the same time as the proposed Reverse Stock Split, whether or not they are in connection with the proposed Reverse Stock Split.
HOLDERSOF OUR COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT ARISING UNDER OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS), UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
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Tax Consequences of the Reverse Stock Split
The proposed Reverse Stock Split is expected to constitute a “recapitalization” for U.S. federal income tax purposes pursuant to Section 368(a)(1)(E) of the Code. As of March 19, 2019,a result, a U.S. Holder generally should not recognize gain or loss upon the fair market valueproposed Reverse Stock Split. A U.S. Holder’s aggregate adjusted tax basis in the shares of our common stock was $0.69 per share.
As noted above, we will not issue fractional shares in connection with the Reverse Stock Plan, the compensation committee, acting in its discretion, has the responsibility and full power and authoritySplit. Instead, stockholders who otherwise would be entitled to select the persons to whom awardsreceive fractional shares will be made,automatically entitled to prescribe the terms and conditionsreceive an additional fraction of each award and make amendments thereto, to construe, interpret and apply the provisions of the 2005 Incentive Stock Plan and of any agreement or other instrument evidencing an award and to make any and all determinations and take any and all other actions as it deems necessary or desirable in order to carry out the 2005 Incentive Stock Plan.
Appraisal Rights
Under the award vests and the award is settled in shares. Settlement will occur as soon as practicable after the date such award becomes earned and vested, but no later than March 15General Corporation Law of the following year. However, the compensation committee may provide for the paymentState of dividend equivalents in the form of cash or shares in an amount equal to the dividends that would have been payable if the shares were outstanding, and may subject the payment of such dividend equivalents to the vesting and other conditions applicable to the original shares covered by the award.
Name and Principal Position | | | Dollar value ($) | | | Number of Options | | ||||||
James A. Hayward Chairman, President and CEO | | | | | 213,327 | | | | | | 250,000 | | |
Beth M. Jantzen CFO | | | | | 85,330 | | | | | | 100,000 | | |
Judith Murrah CIO and Secretary | | | | | 127,996 | | | | | | 150,000 | | |
Executive group | | | | | 426,653 | | | | | | 500,000 | | |
Non-executive director group | | | | | 643,966 | | | | | | 556,147 | | |
Non-executive officer employee group | | | | | 533,315 | | | | | | 465,327 | | |
Proposal 1, the approval of the Company. The compensation committee reservesAmendment effecting the discretion to grant awards which will be subject toReverse Stock Split, requires the $1 million annual deduction limitation.
The Board Recommends a VoteTo Approve the matter because it represents a share presentAmendment to the Company’s Certificate of Incorporation Effecting the Reverse Stock Split in person or represented by proxy at the meeting and entitledRange from One-for-Fifteen to vote, thereby increasingOne-for-Fifty.Proxies that are Returned will be so Voted Unless Otherwise Instructed.
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PROPOSAL 2
APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES
Adjournment of the Special Meeting
In the event that the number of affirmative votes required to approve this proposal. It is intended that the proxy in the form presented will be voted, unless otherwise indicated, “FOR” Proposal No. 2. If no instructions are indicated, the shares will be voted “FOR” Proposal No. 2.
| | | Fiscal year ended September 30, 2018 | | | Fiscal year ended September 30, 2017 | | ||||||
(i) Audit Fees | | | | $ | 192,955 | | | | | $ | 169,157 | | |
(ii) Audit Related Fees | | | | | — | | | | | | — | | |
(iii) Tax Fees | | | | | 29,244 | | | | | | 12,713 | | |
(iv) All Other Fees | | | | | — | | | | | | — | | |
Total Fees | | | | $ | 222,199 | | | | | $ | 181,870 | | |
|
If a quorum is required for the ratificationpresent, Proposal 2, approval of the appointmentproposal to adjourn the Special Meeting to a later date, requires the affirmative vote of Marcum as our independent registered public accounting firm for the fiscal year ending September 30, 2019. Abstentions will be considered in determining the total number of votes required to attain a majority of the shares present in person or represented by proxy atvotes cast on the meeting entitled to vote. Accordingly, an abstention from voting by a stockholder present in person or represented
The Board Recommends a Vote FOR the Board of Directors.
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| Dr. James A. Hayward | | | | $ | 250,000 | | |
| Beth M. Jantzen | | | | $ | 240,000 | | |
| Judith Murrah | | | | $ | 240,000 | | |
| | | Year | | | Salary ($) (c) | | | Bonus ($) (d) | | | Stock Awards ($) (e) | | | Option Awards ($) (f)(1) | | | All Other Compensation ($) (i) | | | Total ($) (j) | | |||||||||||||||||||||
James A. Hayward Chairman, President and CEO | | | | | 2018 | | | | | | 250,000 | | | | | | — | | | | | | — | | | | | | 213,327 | | | | | | 18,000 | | | | | | 481,327 | | |
| | | 2017 | | | | | | 281,730 | | | | | | — | | | | | | — | | | | | | 245,790 | | | | | | 18,000 | | | | | | 545,520 | | | ||
Beth M. Jantzen CFO | | | | | 2018 | | | | | | 221,538 | | | | | | — | | | | | | — | | | | | | 85,330 | | | | | | — | | | | | | 306,868 | | |
| | | 2017 | | | | | | 246,346 | | | | | | — | | | | | | — | | | | | | 98,316 | | | | | | — | | | | | | 344,662 | | | ||
Judith Murrah CIO | | | | | 2018 | | | | | | 240,000 | | | | | | — | | | | | | — | | | | | | 127,996 | | | | | | — | | | | | | 367,996 | | |
| | | 2017 | | | | | | 246,346 | | | | | | — | | | | | | — | | | | | | 98,316 | | | | | | — | | | | | | 344,662 | | |
| | | Option Awards | | |||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | ||||||||||||
James A. Hayward | | | | | 166,667(1) | | | | | | — | | | | | | 3.60 | | | | | | 6/30/2020 | | |
| | | 666,667(2) | | | | | | — | | | | | | 3.51 | | | | | | 7/11/2021 | | | ||
| | | 833,334(8) | | | | | | — | | | | | | 5.82 | | | | | | 10/17/2018 | | | ||
| | | 175,000 | | | | | | — | | | | | | 2.86 | | | | | | 12/21/2024 | | | ||
| | | 25,000 | | | | | | 25,000(3) | | | | | | 2.99 | | | | | | 12/21/2025 | | | ||
| | | 150,000 | | | | | | — | | | | | | 2.05 | | | | | | 12/20/2026 | | | ||
| | | 250,000 | | | | | | — | | | | | | 1.19 | | | | | | 08/29/2028 | | | ||
Beth M. Jantzen | | | | | 4,167(4)(5) | | | | | | — | | | | | | 5.31 | | | | | | 10/14/2018 | | |
| | | 4,167(4)(5) | | | | | | — | | | | | | 6.96 | | | | | | 11/28/2018 | | | ||
| | | 4,167(4)(6) | | | | | | — | | | | | | 8.16 | | | | | | 12/09/2018 | | | ||
| | | 40,000(4) | | | | | | — | | | | | | 2.86 | | | | | | 12/21/2024 | | | ||
| | | 22,500(9) | | | | | | 7,500 | | | | | | 3.45 | | | | | | 2/14/2025 | | | ||
| | | 25,000 | | | | | | 25,000(3) | | | | | | 2.99 | | | | | | 12/21/2025 | | | ||
| | | 60,000(4) | | | | | | — | | | | | | 2.05 | | | | | | 12/20/2026 | | | ||
| | | 100,000 | | | | | | — | | | | | | 1.19 | | | | | | 08/29/2028 | | |
| | | Option Awards | | |||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | ||||||||||||
Judith Murrah | | | | | 33,334(7) | | | | | | — | | | | | | 7.02 | | | | | | 12/01/2018 | | |
| | | 75,000 | | | | | | — | | | | | | 2.86 | | | | | | 12/21/2024 | | | ||
| | | 4,167(6) | | | | | | — | | | | | | 8.16 | | | | | | 12/09/2018 | | | ||
| | | 25,000 | | | | | | 25,000(3) | | | | | | 2.99 | | | | | | 12/21/2025 | | | ||
| | | 60,000 | | | | | | — | | | | | | 2.05 | | | | | | 12/20/2026 | | | ||
| | | 150,000 | | | | | | — | | | | | | 1.19 | | | | | | 08/29/2028 | | |
Plan Category | | | No. of Shares to be issued upon exercise of outstanding options, warrants and rights (a) | | | Weighted-average exercise price of outstanding options, warrants, and rights (b) | | | No. of Shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column) (a) | | |||||||||
Equity Compensation Plan Approved by Stockholders | | | | | 6,183,214 | | | | | $ | 3.13 | | | | | | 1,353,466 | | |
Equity Compensation Plan Not Approved by Stockholders(1) | | | | | 410,702 | | | | | $ | 2.96 | | | | | | n/a | | |
Total | | | | | 6,593,916 | | | | | $ | 3.12 | | | | | | 1,353,466 | | |
| | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards ($)(1) | | | All Other Compensation ($) | | | Total ($)(1)(9) | | |||||||||||||||
Sanford R. Simon(6) | | | | | — | | | | | | — | | | | | | 80,404 | | | | | | — | | | | | | 80,404 | | |
Yacov A. Shamash(2)(5) | | | | | — | | | | | | — | | | | | | 94,704 | | | | | | — | | | | | | 94,704 | | |
John Bitzer, III(4) | | | | | — | | | | | | — | | | | | | 81,304 | | | | | | — | | | | | | 81,304 | | |
Joseph D. Ceccoli(2) | | | | | — | | | | | | — | | | | | | 87,500 | | | | | | — | | | | | | 87,500 | | |
Charles S. Ryan(4) | | | | | — | | | | | | — | | | | | | 81,304 | | | | | | — | | | | | | 81,304 | | |
Robert C. Catell(2) | | | | | — | | | | | | — | | | | | | 87,500 | | | | | | — | | | | | | 87,500 | | |
Elizabeth M. Schmalz Ferguson(2)(3) | | | | | — | | | | | | — | | | | | | 131,250 | | | | | | — | | | | | | 131,250 | | |
The following table sets forth certain information regarding the shares of our common stock beneficially owned as of March 19,September 25, 2019, (i) by each person who is known to us to beneficially own 5% or more of the outstanding common stock, (ii) by each of theour principal executive officer, our principal financial officer and our other executive officers named in the table under “Executive Compensation” and by each of our directors and (iii) by all executive officers and directors as a group.
Unless otherwise indicated below, each person or entity has an address in care of our principal executive offices at 50 Health Sciences Drive, Stony Brook, New York 11790.
Name and Address of Beneficial Owner | Title of Class | Number of Shares Owned(1)(2) | Percentage of Class(3) | ||||||
Executive Officers and Directors: | | | | ||||||
James A. Hayward | Common Stock | 8,038,697 | (4) | 15.86% | |||||
Yacov A. Shamash | Common Stock | 321,137 | (5) | * | |||||
John Bitzer, III | Common Stock | 1,699,483 | (6)(7) | 3.52% | |||||
Robert C. Catell | Common Stock | 230,405 | (11) | * | |||||
Joseph D. Ceccoli | Common Stock | 210,652 | (8) | * | |||||
Beth M. Jantzen | Common Stock | 282,842 | (12) | * | |||||
Judith Murrah | Common Stock | 461,864 | (13) | * | |||||
Charles S. Ryan | Common Stock | 227,382 | (6) | * | |||||
Sanford R. Simon | Common Stock | 212,149 | (9) | * | |||||
Elizabeth Schmalz Ferguson | Common Stock | 142,888 | (10) | * | |||||
All directors and officers as a group (10 persons) | Common Stock | 11,827,499 | (14) | 22.42% | |||||
5% Stockholders: | | | | ||||||
William W. Montgomery | Common Stock | 6,030,900 | (15) | 12.56% | |||||
Dillon Hill | Common Stock | 2,777,777 | (16) | 5.47% |
*
(1)
(2)
(3)
(4)
(5)
(6)
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(7)
(8)
(9)
(10)
(11) Includes 152,830 shares underlying currently exercisable options.
(12) Includes 280,001 shares underlying currently exercisable options.
(13) Includes 360,001 shares underlying currently exercisable options.
(14) Includes 4,734,228 shares underlying currently exercisable options and warrants and 488,220 shares of common stock issuable upon conversion of secured convertible notes payable.
(15)
(16) This information is based on a Schedule 13G filed with the SEC on July 24, 2019 by Bruce Grossman, the sole member of Dillon Hill Capital, LLC (“Dillon Hill”). Bruce Grossman reported indirect beneficial ownership, and sole voting and sole dispositive power, of 2,777,777 shares of common stock, issuable upon conversion of secured convertible notes payable.Until October 13, 2019, Dillon Hill has the right to purchase up to an additional $500,000 principal amount of such secured convertible notes, which would be convertible into an additional 925,925 shares of common stock of the Company. Such secured convertible notes include a provision limiting conversion of such notes to the extent that conversion would result in the holder beneficially owning more than 9.99% of the Company’s common stock.The address of Bruce Grossman is c/o Dillon Hill Capital LLC, 200 Business Park Drive, Suite 306, Armonk, NY 10504.
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The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. The Company, as well as some brokers (or other nominees), household the Company’s proxy materials,Proxy Materials, which means that we or they deliver a single proxy statement or Notice, as applicable,Proxy Statement to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker (or other nominee) or from or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statementProxy Statement in the future, or if you are receiving multiple copies of the proxy statementProxy Statement and wish for only one copy to be delivered to your household in the future, please notify (i) your broker (or other nominee) if your shares are held in a brokerage or similar account or (ii) the Company if you hold registered shares in your own name. We will promptly deliver a separate proxy statementProxy Statement to record stockholders upon written or oral request. You can notify us of your instructions by telephone at 631-240-8800 or by sending a written request to:
Corporate Secretary
Applied DNA Sciences, Inc.
50 Health Sciences Drive
Stony Brook, New York 11790
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In order for a stockholder proposal to be considered for inclusion in the proxy statement for the 2020 annual meeting of stockholders, the written proposal must have been received by the Corporate Secretary at the address below no earlier than December 18, 2019 and no later thanJanuary 17, 2020December 6, 2019. In the event that the annual meeting of stockholders is called for a date that is not within 30 days before or after the first anniversary of the date of this year’s annual meeting, which was held on May 16, 2019, the proposal must be received no later than a reasonable time before the Company begins to print and mail its proxy materials. The proposal will also need to comply with the SEC’s regulations under Rule 14a-8 under the Exchange Act regarding the inclusion of stockholder proposals in company sponsored proxy materials. Proposals should have beenbe addressed to:
Corporate Secretary
Applied DNA Sciences, Inc.
50 Health Sciences Drive
Stony Brook, New York 11790
For a stockholder proposal that is not intended to be included in the proxy statement for the 2020 annual meeting of stockholders, or if you want to nominate a person for election as a director, you must provide written notice to the Corporate Secretary at the address above. The Secretary must receive this notice not earlier thanJanuary 17, 2020 and not later thanFebruary 16, 2020. However, if our 2019 annual meeting of stockholders is held more than 30 days before or more than 60 days after May 16, 2020, then the Secretary must receive this notice not earlier than the close of business on the 120th day prior to the date of our 2019 annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which we make a public announcement of the date of the meeting. The notice of a proposed item of business must provide information as required in our bylaws which, in general, require that the notice include for each matter a brief description of the matter to be brought before the meeting; the reason for bringing the matter before the meeting; the text of the proposal or matter; your name, address, and number of shares you own beneficially or of record; and any material interest you have in the proposal.
The notice of a proposed director nomination must provide information and documentation as required in our bylaws which, in general, require that the notice of a director nomination include the information about the nominee that would be required to be disclosed in the solicitation of proxies for the election of a director under federal securities laws; the nominee’s written consent to be named in the proxy statement as a nominee and to serve as a director if elected; a description of any transaction or arrangement during the last three years between the stockholder making the nomination and the nominee in which the nominee had a direct or indirect material interest; and a completed and signed questionnaire, representation and agreement. A copy of the bylaw requirements will be provided upon request to the Corporate Secretary at the address above.
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We do not know of our Annual Report on Form 10-K for the fiscal year ended September 30, 2018, as amended, including financial statements and any financial statement schedules requiredmatters that are to be filedpresented for action at the Special Meeting other than those set forth above. If any other matters properly come before the Special Meeting, the person named in the enclosed proxy card will vote the shares represented by proxies in accordance with SEC rules, will be sent without charge to any stockholder of the Company requesting it in writing from: their best judgment on such matters.
By Order of the Board of Directors /s/ James A. Hayward | |
James A. Hayward | |
Chairman, President and Chief Executive Officer | |
Stony Brook, New York , 2019 |
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PROPOSED FORM OF
FOURTH CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
APPLIED DNA SCIENCES, INC.
Applied DNA Sciences, Inc. (the “Corporation”), 50 Health Sciences Drive, Stony Brook, New York 11790, Attention: Beth Jantzen. We also make available, freea corporation organized and existing under the General Corporation Law of charge on our website, allthe State of our filingsDelaware, DOES HEREBY CERTIFY THAT:
FIRST: Article IV of the Certificate of Incorporation, as amended (the “Certificate of Incorporation”), of the Corporation is hereby amended by adding the following paragraph at the end thereof:
“Upon the filing and effectiveness (the “Reverse Split Effective Time”) pursuant to the DGCL of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, each [fifteen to fifty] [(15 - 50)] shares of the Corporation’s Common Stock, par value $0.001 per share, issued and outstanding immediately prior to the Reverse Split Effective Time, shall automatically be reclassified, combined, and converted into one (1) validly issued, fully paid, and non-assessable share of Common Stock, par value $0.001 per share, of the Corporation, without any action by any holder thereof; provided that no fractional share interests shall be issued as a result of the foregoing reclassification, combination, and conversion. Any stockholder of record of Common Stock immediately prior to the Reverse Split Effective Time that would otherwise be entitled to fractional share interests pursuant to the provisions of this Article, shall be entitled, upon the Reverse Split Effective Time, to receive one whole share of Common Stock in lieu of such fractional share interests.
From and after the Reverse Split Effective Time, certificates that, immediately prior to the Reverse Split Effective Time, represent shares of Common Stock that are publicly filedheld by any stockholder shall thereafter represent the number of shares of Common Stock into which such shares shall have been reclassified, combined, and converted at the Reverse Split Effective Time pursuant to this Certificate of Amendment.”
SECOND: This Certificate of Amendment shall become effective on the SEC’s EDGAR website, including Forms 10-K, 10-Q and 8-K,, 2019, at www.adnas.com.
THIRD: That pursuant to resolution of the Board of Directors,/s/ James A. Hayward
IN WITNESS WHEREOF, the Company and, in the judgmentCorporation has caused this Fourth Certificate of the Board or Committee, the acceleration and/or continuationAmendment of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interestsCertificate of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 9 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant’s Grants are not in the Company’s best interest.
APPLIED DNA SCIENCES, INC. | ||
By: | ||
Name: | ||
Title: |
PRELIMINARY COPY - SUBJECT TO COMPLETION
Questions? Need Help Voting?
Please contact our Strategic Shareholder Advisor and Proxy
Solicitation Agent, Kingsdale Advisors
CONTACT US:
North American Toll Free Phone:
1-855-682-9644
E-mail: contactus@kingsdaleadvisors.com | |||||
Fax: 416-867-2271 | |||||
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DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYE65171-P21507ForAllWithholdAllFor AllExceptFor Against AbstainFor Against Abstain! ! !! ! !To withhold authority to vote for any individualnominee(s), mark "For All Except" and write thenumber(s) of the nominee(s) on the line below.APPLIED DNA SCIENCES, INC.ATTN: BETH JANTZEN50 HEALTH SCIENCES DRIVESTONY BROOK, NY 11790TheThe Board of Directors recommends you vote FOR proposals 2, 3, and 5, and for THREE YEARS on proposal 4.Nominees:01) James A. Hayward02) John Bitzer, III03) Robert B. Catell04) Joseph D. Ceccoli05) Charles S. Ryan06) Yacov A. Shamash07) Sanford R. Simon08) Elizabeth M. Schmalz Ferguson2.the following: For Against Abstain 1. Approval of the amendment to the Company's certificate of incorporation to effect a reverse stock split of common stock (the "Reverse Stock Split"), at a ratio in the range from one-for-fifteen to one-for-fifty, with such specific ratio to be determined by the Company's board of directors following the Special Meeting; and 2. Approval, if necessary, of the 2005 Incentive Stock Plan to increase the number of shares of our common stock that can beissued pursuant thereto.3. Approval, on a non-binding advisory basis,adjournment of the compensationSpecial Meeting to solicit additional proxies in favor of the Company's named executive officers.5. Ratification of the selection of Marcum LLP as our independent registered public accounting firm for the fiscal year endingSeptember 30, 2019.4. Approval, on a non-binding, advisory basis, of the frequency of the stockholder vote on the compensation of the Company'snamed executive officers.NOTE:Reverse Stock Split proposal. NOTE: Such other business as may properly come before the meeting or any adjournment thereof.1. Election of DirectorsAPPLIED DNA SCIENCES, INC.The Board of Directors recommends you vote FORthe following:thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give fulltitlefull title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporateorcorporate or partnership name by authorized officer.! ! !1 Yearofficer.Investor Address Line 1 Investor Address Line 2 YearsInvestor Address Line 3 Years Abstain! ! ! !! ! !VOTE BY INTERNET - www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic delivery ofinformation up until 11:59 P.M. Eastern Time on May 15, 2019, the day beforethe meeting date. Have your proxy card in hand when you access the web siteand follow the instructions to obtain your records and to create an electronicvoting instruction form.ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by our company in mailing proxymaterials, you can consent to receiving all future proxy statements, proxycards and annual reports electronically via e-mail or the Internet. To sign upfor electronic delivery, please follow the instructions above to vote using theInternet and, when prompted, indicate that you agree to receive or access proxymaterials electronically in future years.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until11:59 P.M. Eastern Time on May 15, 2019, the day before the meeting date.Have your proxy card in hand when you call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paidenvelope we have provided or return it to Vote Processing, c/o Broadridge,51 Mercedes Way, Edgewood, NY 11717.
Important Notice Regarding the Availability of Proxy Materials for the AnnualSpecial Meeting:The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.APPLIEDwww.proxyvote.com .. APPLIED DNA SCIENCES, INC.AnnualINC. Special Meeting of StockholdersMay 16,Stockholders October 31, 2019 10:9:00 AMThisAM This proxy is solicited by the Board of DirectorsTheDirectors The stockholder executing and delivering this Proxy hereby appoints Ms. Judith Murrah and Ms. Beth Jantzen and each of them as proxies (the "proxies"), with full power of substitution, and hereby authorizes them to represent and vote, as designated on the reverse side, all shares of common stock, $0.001 par value per share, of Applied DNA Sciences, Inc. held of record by the undersigned as of March 19,October 4, 2019, at the AnnualSpecial Meeting of Stockholders of Applied DNA Sciences, Inc., to be held atthe Center of Excellence in Wireless and Informationat the Long Island High Technology 1500 Stony Brook Rd.,Incubator, 25 Health Sciences Drive, Stony Brook, New York 11794,11790, at 10:9:00 a.m., local time, on Thursday, May 16,October 31, 2019, or at any postponements or adjournments of the meeting.Thismeeting. This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this Proxy will be voted in accordance with the recommendations of our Board of Directors and for such other matters as may properly come before the meeting as said proxies deem advisable.THISadvisable. THIS PROXY SHOULD BE MARKED, DATED AND SIGNED BY THE STOCKHOLDER(S) EXACTLY AS SUCH STOCKHOLDER'S NAME APPEARS HEREON AND RETURNED PROMPTLY IN THE ENCLOSED ENVELOPE. PERSONS SIGNING IN A FIDUCIARY CAPACITY SHOULD SO INDICATE. IF SHARES ARE HELD BY JOINT TENANTS OR AS COMMUNITY PROPERTY, BOTH SHOULD SIGN.ContinuedSIGN. Continued and to be signed on reverse side