Applied DNA Sciences (APDN) 10-Q 13 May 21 2021 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2021	May 07, 2021
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Entity Registrant Name	APPLIED DNA SCIENCES INC
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	APDN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,486,120
Entity Central Index Key	0000744452
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2021	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 13,925,997	$ 7,786,743
Accounts receivable, net of allowance of $20,830 and $11,968 at March 31, 2021 and September 30, 2020, respectively	2,186,442	194,319
Inventories	720,538	497,367
Prepaid expenses and other current assets	586,207	599,296
Total current assets	17,419,184	9,077,725
Property and equipment, net	2,422,628	1,277,655
Other assets:
Deposits	95,040	95,083
Goodwill	285,386	285,386
Intangible assets, net	559,346	605,330
Total Assets	20,781,584	11,341,179
Current liabilities:
Accounts payable and accrued liabilities	1,780,072	1,926,427
Promissory notes payable-current portion		329,299
Secured convertible notes payable, net of debt issuance costs		1,499,116
Deferred revenue	350,057	511,036
Total current liabilities	2,130,129	4,265,878
Long term accrued liabilities	31,467	848,307
Promissory notes payable-long term portion		517,488
Total liabilities	2,161,596	5,631,673
Commitments and contingencies (Note H)
Applied DNA Sciences, Inc. Stockholders' Equity:
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively	0	0
Common stock, par value $0.001 per share; 200,000,000 shares authorized as of March 31, 2021 and September 30, 2020, 7,486,120 and 5,142,779 shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively	7,488	5,144
Additional paid in capital	294,781,015	275,548,737
Accumulated deficit	(276,162,006)	(269,835,650)
Applied DNA Sciences, Inc. stockholders' equity:	18,626,497	5,718,231
Noncontrolling interest	(6,509)	(8,725)
Total equity	18,619,988	5,709,506
Total liabilities and equity	20,781,584	11,341,179
Series A Preferred Stock [Member]
Applied DNA Sciences, Inc. Stockholders' Equity:
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively	0	0
Series B Preferred Stock [Member]
Applied DNA Sciences, Inc. Stockholders' Equity:
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively	$ 0	$ 0

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)	Mar. 31, 2021	Sep. 30, 2020
Allowance on accounts receivable (in dollars)	$ 20,830	$ 11,968
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	7,486,120	5,142,779
Common stock, shares outstanding	7,486,120	5,142,779
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Revenues:
Total revenues	$ 2,671,542	$ 552,473	$ 4,287,683	$ 1,185,992
Cost of revenues	356,610	179,582	599,172	411,613
Operating expenses:
Selling, general and administrative	3,557,487	2,285,544	7,058,391	4,658,957
Research and development	874,055	703,018	1,622,420	1,267,444
Depreciation and amortization	199,381	66,537	296,793	141,604
Total operating expenses	4,630,923	3,055,099	8,977,604	6,068,005
LOSS FROM OPERATIONS	(2,315,991)	(2,682,208)	(5,289,093)	(5,293,626)
Other (expense) income:
Interest income (expense), net	13,841	(29,096)	8,403	(58,187)
Loss on extinguishment of convertible notes payable			(1,774,662)	0
Gain on extinguishment of notes payable	839,945		839,945	0
Other expense, net	(54,873)	(239,601)	(108,733)	(261,833)
Loss before provision for income taxes	(1,517,078)	(2,950,905)	(6,324,140)	(5,613,646)
Provision for income taxes	0	0	0	0
NET LOSS	(1,517,078)	(2,950,905)	(6,324,140)	(5,613,646)
Less: Net loss (income) attributable to noncontrolling interest	278	(1,220)	(2,216)	(1,190)
NET LOSS attributable to Applied DNA Sciences, Inc.	(1,516,800)	(2,952,125)	(6,326,356)	(5,614,836)
Deemed dividend related to warrant modifications				(2,842)
NET LOSS applicable to common stockholders	$ (1,516,800)	$ (2,952,125)	$ (6,326,356)	$ (5,617,678)
Net loss per share applicable to common stockholders - basic and diluted	$ (0.21)	$ (0.79)	$ (1)	$ (1.76)
Weighted average shares outstanding - basic and diluted	7,235,031	3,758,512	6,341,590	3,196,616
Product
Revenues:
Total revenues	$ 965,110	$ 197,801	$ 1,515,207	$ 435,671
Service
Revenues:
Total revenues	$ 1,706,432	$ 354,672	$ 2,772,476	$ 750,321

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Noncontrolling Interest [Member]	Total
Balance at Sep. 30, 2019	$ 1,208	$ 255,962,922	$ (256,805,589)	$ (7,040)	$ (848,499)
Balance (in shares) at Sep. 30, 2019					1,207,993
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued in public offering, net of offering costs	2,285	10,527,745			$ 10,530,030
Common stock issued in public offering, net of offering costs (in shares)					2,285,000
Deemed dividend - warrant repricing		2,842	(2,842)
Stock based compensation expense		205,490			$ 205,490
Net loss			(2,662,711)	(30)	(2,662,741)
Balance at Dec. 31, 2019	3,493	266,698,999	(259,471,142)	(7,070)	$ 7,224,280
Balance (in shares) at Dec. 31, 2019					3,492,993
Balance at Sep. 30, 2019	1,208	255,962,922	(256,805,589)	(7,040)	$ (848,499)
Balance (in shares) at Sep. 30, 2019					1,207,993
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss					$ (5,613,646)
Balance at Mar. 31, 2020	4,060	269,693,833	(262,423,267)	(5,850)	$ 7,268,776
Balance (in shares) at Mar. 31, 2020					4,059,943
Balance at Dec. 31, 2019	3,493	266,698,999	(259,471,142)	(7,070)	$ 7,224,280
Balance (in shares) at Dec. 31, 2019					3,492,993
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of warrants	567	2,767,566			$ 2,768,133
Exercise of warrants (in shares)					566,950
Stock based compensation expense		227,268			$ 227,268
Net loss			(2,952,125)	1,220	(2,950,905)
Balance at Mar. 31, 2020	4,060	269,693,833	(262,423,267)	(5,850)	$ 7,268,776
Balance (in shares) at Mar. 31, 2020					4,059,943
Balance at Sep. 30, 2020	$ 5,144	275,548,737	(269,835,650)	(8,725)	$ 5,709,506
Balance (in shares) at Sep. 30, 2020	5,142,779				5,142,779
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of warrants	$ (519)	(2,605,010)			$ (2,605,529)
Exercise of warrants (in shares)	518,551
Fair value of warrants issued in connection with convertible note repayment		1,643,440			1,643,440
Stock based compensation expense		571,498			571,498
Net loss			(4,809,556)	2,494	(4,807,062)
Balance at Dec. 31, 2020	$ 5,663	280,368,685	(274,645,206)	(6,231)	5,722,911
Balance (in shares) at Dec. 31, 2020	5,661,330
Balance at Sep. 30, 2020	$ 5,144	275,548,737	(269,835,650)	(8,725)	$ 5,709,506
Balance (in shares) at Sep. 30, 2020	5,142,779				5,142,779
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss					$ (6,324,140)
Balance at Mar. 31, 2021	$ 7,488	294,781,015	(276,162,006)	(6,509)	$ 18,619,988
Balance (in shares) at Mar. 31, 2021	7,486,120				7,486,120
Balance at Dec. 31, 2020	$ 5,663	280,368,685	(274,645,206)	(6,231)	$ 5,722,911
Balance (in shares) at Dec. 31, 2020	5,661,330
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued in public offering, net of offering costs	$ 1,810	13,754,697			13,756,507
Common stock issued in public offering, net of offering costs (in shares)	1,810,000
Exercise of warrants	$ (2)	(8,398)			(8,400)
Exercise of warrants (in shares)	1,600
Exercise of warrants cashlessly	$ 13,190	(13)
Exercise of warrants cashlessly (in shares)	13
Stock based compensation expense		649,248			649,248
Net loss			(1,516,800)	(278)	(1,517,078)
Balance at Mar. 31, 2021	$ 7,488	$ 294,781,015	$ (276,162,006)	$ (6,509)	$ 18,619,988
Balance (in shares) at Mar. 31, 2021	7,486,120				7,486,120

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net loss	$ (6,324,140)	$ (5,613,646)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	296,793	141,604
Loss on extinguishment of convertible notes payable	1,774,662	0
Gain on extinguishment of notes payable	(839,945)	0
Stock-based compensation	1,220,746	432,758
Amortization of debt issuance costs	0	12,576
Provision for bad debts	19,638	0
Change in operating assets and liabilities:
Accounts receivable	(2,011,761)	290,828
Inventories	(223,171)	53,688
Prepaid expenses and other current assets and deposits	13,089	(87,114)
Accounts payable and accrued liabilities	(1,190,947)	(424,631)
Deferred revenue	(160,979)	42,533
Net cash used in operating activities	(7,426,015)	(5,151,404)
Cash flows from investing activities:
Purchase of intangible asset	0	(36,525)
Purchase of property and equipment	(1,139,586)	(8,227)
Net cash used in investing activities	(1,139,586)	(44,752)
Cash flows from financing activities:
Net proceeds from exercise of warrants	2,613,929	2,768,133
Net proceeds from sale of common stock and warrants	13,756,507	10,639,728
Repayment of secured convertible notes payable	(1,665,581)	(107,802)
Capitalized offering costs	0	0
Net cash provided by financing activities	14,704,855	13,300,059
Net increase in cash and cash equivalents	6,139,254	8,103,903
Cash and cash equivalents at beginning of period	7,786,743	558,988
Cash and cash equivalents at end of period	13,925,997	8,662,891
Supplemental Disclosures of Cash Flow Information:
Cash paid during period for interest	0	0
Cash paid during period for income taxes	0	0
Non-cash investing and financing activities:
Interest paid in kind	28,329	35,625
Property and equipment acquired, and included in accounts payable	256,194	109,423
Deemed dividend-warrant repricing	0	2,842
Fair value of warrants issued	1,074,118	0
Deferred offering costs reclassified to accounts payable	0	109,698
Intangible asset costs incurred, and included in accounts payable	$ 0	$ 14,375

NATURE OF THE BUSINESS

NATURE OF THE BUSINESS	6 Months Ended
	Mar. 31, 2021
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS	NOTE A — NATURE OF THE BUSINESS Applied DNA Sciences, Inc. (“Applied DNA” or the “Company”) develops and markets DNA-based technology solutions utilizing its LinearDNA TM large-scale polymerase chain reaction (“PCR”) based manufacturing platform. The Company’s proprietary platform produces large quantities of DNA for use in the nucleic acid-based in vitro diagnostics and preclinical nucleic-acid based drug development and manufacturing markets (“Biotherapeutic Contract Research and Manufacturing”) and for supply chain security, anti-counterfeiting and anti-theft technology purposes (“Non-Biologic Tagging "). In response to the SARS-CoV-2 (“COVID-19”) pandemic, the Company developed a PCR-based molecular diagnostic test for COVID-19, which was granted Emergency Use Authorization (EUA) by the U.S. Food and Drug Administration (“FDA”) in May 2020. The Company currently manufactures and sells its EUA authorized COVID-19 molecular diagnostic test kit under the Linea TM COVID-19 Assay Kit trademark (“COVID-19 Diagnostic Testing”). In addition, and in further response to the COVID-19 pandemic, the Company developed and is currently offering COVID-19 pooled surveillance testing to detect instances of COVID-19 in defined populations. Unlike diagnostic testing, which looks for the occurence of COVID-19 at the individual level, surveillance testing looks for infections within a defined population or community and can be used for making health management decisions at the population level. The Company’s COVID-19 pooled surveillance testing services are currently offered under the safeCircle TM trademark (“COVID-19 Surveillance Testing”). As of May 10, 2021, the Company also offers COVID-19 diagnostic testing services under its wholly owned subsidiary that holds a New York clinical laboratory permit and itsa CLIA certification for COVID-19 testing using EUA authorized methods and devices (“Clinical Testing Laboratory”). The Company is also developing an invasive circulating tumor cell capture and identification technology (“iCTC Technology”) which uses a patented functional assay to capture live invasive circulating tumor cell and associated lymphocytes that can be identified and expanded for further analysis, including genetic sequencing. Biotherapeutic Contract Research and Manufacturing The Company’s patented continuous flow PCR systems and other proprietary PCR-based production technology and post-processing systems that comprise the LinearDNA TM platform allows for the large-scale production of specific DNA sequences. The LinearDNA TM platform is currently being used for customers to manufacture DNA as components of in vitro diagnostic tests and for preclinical nucleic acid-based drug development in the fields of adoptive cell therapies (CAR T and TCR therapies), DNA vaccines (anti-viral and cancer), RNA therapies, clustered regularly interspaced short palindromic repeats (CRISPR) based therapies and gene therapies. The Company provides preclinical contract research and manufacturing services for the nucleic acid-based therapeutic markets. It works with biotech and pharmaceutical companies to convert plasmid-based and/or viral transduction-based preclinical biotherapeutics into PCR-produced linear DNA-based forms that can be produced on the Company’s LinearDNA TM platform. In addition, it provides contract research services to RNA based drug and biologic customers for preclinical studies. These services include the design, development and manufacture of PCR-produced DNA templates for RNA. In addition, the Company also uses its LinearDNA TM platform to produce very large gram-scale quantities of DNA for the in vitro diagnostic market where the Company’s DNA is used for both commercially available diagnostics and diagnostics under development. The Company also seeks to develop, acquire, and commercialize, itself or with partners, a diverse pipeline of nucleic acid-based therapeutics based on PCR-produced linear DNA to improve existing nucleic acid-based therapeutics or to create new nucleic acid-based therapeutics that address unmet medical needs. The Company is currently directly engaged in preclinical drug candidate development activities focusing on therapeutically relevant DNA constructs manufactured via its LinearDNA TM platform in the fields of DNA-based anti-viral and anti-cancer vaccines, CAR-T cell immunotherapy and the manufacture of rAAV vectors for gene therapy. The Company is also engaged in preclinical and animal drug candidate development activities focusing on therapeutically relevant DNA constructs manufactured via its PCR-based production platform. The Company seeks to develop, acquire and commercialize, alone or with partners, a diverse pipeline of nucleic acid-based therapeutics based on PCR-produced linear DNA. To this end, the Company is currently working with its development partners Takis S.R.L. and Evvivax S.R.L. (“Takis/Evvivax”) to develop an amplicon-based linear DNA vaccine for COVID-19 that would be manufactured on the Company’s LinearDNA TM platform. Together with its development partners, the Company’s amplicon-based linear COVID-19 vaccine candidate has shown efficacy in preclinical cell and small animal studies. In September 2020, the Company entered into an Animal Clinical Trial Agreement with Takis/Evvivax and with Veterinary Oncology Services, PLLC, an affiliate of Guardian Veterinary Specialists (“GVS”), a multi-specialty veterinary hospital. In November 2020, the Company, together with Takis/Evvivax and GVS, announced receipt of approvals from the New York State Department of Agriculture and Markets and the U.S. Department of Agriculture (“USDA”) on an advanced clinical strategy to conduct a veterinary trial of an amplicon-based linear DNA vaccine COVID-19 candidate. The Company’s jointly developed amplicon-based DNA vaccine for COVID-19 is currently in a veterinary clinical trial in domestic feline cats, with the end goal of applying for a USDA Animal and Plant Health Inspection Service conditional license to enable commercial veterinary sales for veterinary applications. In April 2021, the Company announced preliminary data from its veterinary clinical trial in felines conducted with Takis/Evvivax and GVS. The preliminary data showed that all felines in the trial produced SARS-CoV-2 neutralizing antibodies after a single prime dose of the vaccine candidate. COVID-19 Diagnostic Testing On May 13, 2020 the Company received an Emergency Use Authorization (EUA) from the Food and Drug Administration (FDA) for the clinical use of the Linea TM COVID-19 Assay Kit for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their healthcare provider. Under the EUA, testing is limited to laboratories certified under the Clinical Laboratory Improvement Amendments of 1988, 42 U.S.C. §263a (“CLIA”), that meet requirements to perform high complexity tests, Subsequently, during July and November 2020, the Company was granted EUA amendments that expand the installed base of PCR equipment platforms on which our Linea™ COVID-19 Assay Kit can be processed and significantly increased the daily testing capacity of the Linea™ COVID-19 Assay Kit through the use of automation. On May 11, 2021, the Company received a re-issued EUA that expanded the intended use of the LineaTM COVID19 Assay Kit to include use with anterior nasal swab specimens that are self-collected in the presence of an healthcare provider from individuals without symptoms or other reasons to suspect COVID-19 when tested at least weekly and with no more than 168 hours between serially collected specimens. The scope of the EUA, as amended, is expressly limited to use consistent with the Instructions for Use by authorized laboratories, certified under CLIA to perform high complexity tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation. The Company’s Linea™ COVID-19 Assay Kit has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens. The Company currently manufactures the Linea TM COVID-19 Assay Kit at its facilities in Stony Brook, New York. COVID-19 Surveillance Testing Starting in July 2020, the Company under its wholly owned subsidiary, Applied DNA Clinical Labs LLC (“ADCL”), began offering COVID-19 pooled surveillance testing to customers as a Testing-as-a-Service (TaaS) offering branded under the safeCircle TM trademark. Unlike diagnostic testing, which looks for the occurrence of COVID-19 at the individual level, safeCircle TM surveillance testing looks for infections within a defined population or community and can be used for making health management decisions at the population level. safeCircle TM surveillance testing uses high-sensitivity pooled COVID-19 testing utilizing the Linea™ COVID-19 Assay Kit. Under the safeCircle TM surveillance testing service, pooled test results are returned to the sponsoring organization in the aggregate only, not directly to the participating individuals, and may be performed without CLIA certification. Once potentially infected portions of a defined population are identified by the safeCircle TM surveillance testing service, the individuals comprising the potentially infected portions of the defined population are referred to follow on diagnostic testing at a clinical lab to obtain individual results, which may include ADCL. ADCL is offering its safeCircle TM surveillance testing in compliance with current CDC, FDA, CMS and New York State Department of Health recommendations. The use of pooled sampling procedures for the safeCircle TM surveillance testing service has been internally validated by ADCL in compliance with current CDC guidance. The use of pooled sampling procedures is not included in the Linea TM COVID-19 Assay Kit EUA. The Company seeks to continue to commercialize the safeCircle TM surveillance testing TaaS offering with institutional clients such as schools, colleges and businesses. The Company currently provides safeCircle TM surveillance testing to primary/secondary/higher education institutions, private clients, local governments, and businesses and college athletic programs. In addition, starting in February 2021, the Company began the development of its Linea TM COVID-19 Selective Genomic Surveillance TM mutation panel for the qPCR-based detection of SARS-CoV-2 genetic mutations (the "SGS Panel"). The SGS Panel is currently undergoing validation utilizing clinical SARS-CoV-2 positive samples obtained from Northwell Health. Use of the SGS Panel is currently limited to Research Use Only (RUO). Clinical Testing Laboratory Under the Company’s ADCL subsidiary, on May 10, 2021 the Company received its CLIA certification from the New York State Department of Health, Clinical Laboratory Evaluation Program (“CLEP”) for COVID-19 testing using EUA authorized methods and devices. Now that certification was obtained, the Company will be able to operate a clinical diagnostic laboratory for COVID-19 testing and provide individual patient testing results. Through ADCL, the Company seeks to further commercialize its EUA authorized LineaTM COVID-19 Assay Kit. The Company also intends to work towards expanding its New York clinical laboratory permit and CLIA certifications to include, among other diagnostic tests, its iCTC Technology, which would allow the Company to further commercialize this technology. iCTC Technology The Company seeks to further develop, manufacture and commercialize its Vita-Assay TM iCTC Technology acquired from Vitatex, Inc. in August 2019. The Company’s iCTC Technology uses a patented functional assay to capture live invasive circulating tumor cell and associated lymphocytes that can be identified and expanded for further analysis, including genetic sequencing. The Company’s iCTC Technology has been used and is currently being used in a human cancer drug candidate clinical trial to monitor cancer disease progression in the trial subjects as a Research Use Only diagnostic assay. The Company seeks to further develop and commercialize this technology and to potentially integrate aspects of the iCTC Technology with its PCR know-how and with the LinearDNA TM platform for cancer research and nucleic acid-based drug development. Non-Biological Tagging and Related Services The Company’s supply chain security business allows its customers to use non-biologic DNA (molecular) tags, manufactured via its LinearDNA TM platform, to mark objects, and then identify these objects by detecting the absence or presence of the molecular tag. The Company’s core products include: · SigNature® Molecular Tags produced by the Company’s LinearDNA TM platform, provide an approach to authenticate goods within large and complex supply chains for materials such as cotton, and leather, in-home textiles and apparel, pharmaceuticals and nutraceuticals, cannabis and other products. · SigNify® IF portable DNA readers and SigNify consumable reagent test kits provide definitive real-time authentication of molecular tags in the field, providing a front-line solution for supply chain integrity backed with forensic-level molecular tag authentication. Applied DNA’s software platform enables customers to track materials throughout a supply chain or product life. · CertainT® trademark indicates the use of Applied DNA’s tagging, testing and tracking platforms and solutions, enabling manufacturers, brands and trade organizations to convey proof of their product claims.

BASIS OF PRESENTATION AND SUMMA

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES	6 Months Ended
	Mar. 31, 2021
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES	NOTE B — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES Interim Financial Statements The accompanying condensed consolidated financial statements as of March 31, 2021 and for the three and six-month periods ended March 31, 2021 and 2020 are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended September 30, 2020 and footnotes thereto included in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission (“SEC”) on December 17, 2020, as amended. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, APDN (B.V.I.) Inc., Applied DNA Sciences Europe Limited, and Applied DNA Sciences India Private Limited, ADCL and its majority-owned subsidiary, LineaRx, Inc. ("LRx"). Significant inter-company transactions and balances have been eliminated in consolidation. The condensed consolidated balance sheet as of September 30, 2020 contained herein has been derived from the audited consolidated financial statements as of September 30, 2020 but does not include all disclosures required by GAAP. Liquidity The Company has recurring net losses, which have resulted in an accumulated deficit of $276,162,006 as of March 31, 2021. The Company incurred a net loss of $6,324,140 and generated negative operating cash flow of $7,426,015 for the six-month period ended March 31, 2021. At March 31, 2021 the Company had cash and cash equivalents of $13,925,997 and working capital of $15,289,055. The Company has historically financed its operations principally from the sale of equity and equity-linked securities. Through March 31, 2021, the Company has dedicated most of its financial resources to research and development, including the development and validation of its own technologies as well as, advancing its intellectual property, and general and administrative activities. As discussed in Note F, on January 13, 2021, the Company closed on a registered direct public offering of 1,810,000 shares of Common Stock at a purchase price of $8.30 per share. Net proceeds, after deducting underwriting discounts and commissions, and other offering expenses, were approximately $13.8 million. In addition, during the six-month period ended March 31, 2021, 520,151 warrants were exercised, resulting in net proceeds, after deducting underwriting commissions, to the Company of approximately $2.6 million. The Company expects to finance its operations primarily through cash received from the January 2021 registered direct public offering and the warrant exercises, discussed above, as well as collection of its accounts receivable. The Company estimates that it will have sufficient cash and cash equivalents to fund operations for the next twelve months from the date of filing of this quarterly report. The Company may require additional funds to complete the continued development of its products, services, product manufacturing, and to fund expected additional losses from operations until revenues are sufficient to cover its operating expenses. In addition, if the Company is successful with any of its preclinical vaccine candidates, the Company would require additional funds to complete the vaccine candidate development. If revenues are not sufficient to cover the Company’s operating expenses, and if the Company is not successful in obtaining the necessary additional financing, the Company will most likely be forced to reduce operations. COVID-19 Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic which has spread throughout the world. The Company is monitoring this situation, and it is unable to predict the impact that COVID-19 will have on the Company’s future financial position and operating results due to numerous uncertainties. The Company believes that the COVID-19 pandemic adversely impacted the global textile industry, which has resulted in a reduction of textile related revenues, specifically as it relates to our cotton customer contract. On March 7, 2020 the Governor of New York declared a health emergency and issued an order (as amended) to close all nonessential businesses, which was followed by a phased reopening. Portions of the Company’s business were deemed to be an essential business, such as its government and pharmaceutical contracts, as well as its vaccine and diagnostic candidate development. However, the Company has experienced, and may continue to experience in the future, facility closures related to its “nonessential” businesses, and pursuant to the government order, the Company reduced the scope of its operations. The Company received a loan of approximately $847,000 on May 1, 2020 from Bank of America as lender pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). As disclosed in Note E, the PPP loan was fully forgiven during February 2021. As a result of COVID-19, the Company has experienced a decline in revenues from non-biological tagging and related services, primarily as it relates to its cotton customer contract. Historically revenues from the Company's cotton customer contract are seasonal and recognized primarily during the Company’s first and fourth fiscal quarters. However, due to the impacts of the COVID-19 global pandemic, the Company did not recognize revenue for the shipment of DNA concentrate relating to its cotton customer contract during the three or six-month periods ended March 31, 2021. However, the Company has experienced an increase in its Biotherapeutic Contract Research and Manufacturing business as a result of COVID-19, specifically as it relates the Company’s COVID-19 Diagnostic Testing and COVID-19 Surveillance Testing. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s future operations and liquidity is uncertain as of the date of this Quarterly Report. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most complex and subjective estimates include revenue recognition, allowance for doubtful accounts, recoverability of long-lived assets, including the values assigned to goodwill, intangible assets and property and equipment, fair value calculations for stock-based compensation and warrants, contingencies and management’s anticipated liquidity. Management reviews its estimates on a regular basis and the effects of any material revisions are reflected in the consolidated financial statements in the period they are deemed necessary. Accordingly, actual results could differ from those estimates. Revenue Recognition The Company follows Financial Accounting Standards Board (“FASB”) issued accounting standard updates which clarify the principles for recognizing revenue arising from contracts with customers (“ASC 606” or “Topic 606”). The core principle of the revenue standard is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 applies a five-step model for revenue measurement and recognition and also requires increased disclosures including the nature, amount, timing, and uncertainty of revenue and cash flows related to contracts with clients. The Company measures revenue at the amounts that reflect the consideration to which it is expected to be entitled in exchange for transferring control of goods and services to customers. The Company recognizes revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. The Company’s contracts with customers may include multiple performance obligations (e.g. taggants, maintenance, authentication services, research and development services, etc.). For such arrangements, the Company allocates revenues to each performance obligation based on their relative standalone selling price. The Company recognizes revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration it expects to receive for those goods or services, including any variable consideration. Due to the short-term nature of the Company’s contracts with customers, it has elected to apply the practical expedients under Topic 606 to: (1) expense as incurred, incremental costs of obtaining a contract and (2) not adjust the consideration for the effects of a significant financing component for contracts with an original expected duration of one year or less. Product Revenues and Authentication Services The Company’s PCR-produced linear DNA products are manufactured in accordance with contracts with customers. The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The Company does not consider payment terms of a performance obligation for customers with contractual terms that are one year or less and has elected the practical expedient. Nearly all the Company’s sales contracts reflect market pricing at the time the contract is executed, or are one year or less, and generally provide for shipment within 30 to 60 days after the price has been agreed upon with the customer. The Company invoices customers upon shipment, and its collection terms range, on average, from 30 to 60 days. Linea TM COVID-19 Assay Kit Contract Under the Company’s Linea TM COVID-19 Assay Kit contract, the customer has the right to use certain laboratory equipment solely for the processing of the Company’s COVID-19 Assay Kit. The current contract has a term of twelve months and no minimum purchase requirements. This contract has an embedded lease for the right to use the Company’s equipment and the Company determines the amount of lease revenue allocated to the equipment based on the relative standalone selling prices. The Company evaluated the terms of this embedded lease and determined its classification as an operating lease. The cost of the equipment is capitalized within property and equipment. Equipment Lease Revenues As discussed above, the Company leases certain laboratory equipment to a customer under its Linea TM COVID-19 Assay Kit contract. The contract includes the sale of the Company’s Linea TM COVID-19 Assay Kits (“COVID-19 Assay Kits”), as well as a lease for certain laboratory equipment for the processing of the COVID-19 Assay Kits. Revenues for the lease of equipment under this contract are recognized as an operating lease as the equipment is being utilized by the customer. This contract provides the customer the right to use the equipment for the term of the contract solely for the purpose of processing the Company’s COVID-19 Assay Kits. Lease revenue from this contract is presented in product revenues in the Company’s condensed consolidated statement of operations. Lease revenue was $89,447 and $141,016, respectively for the three and six-month periods ended March 31, 2021. This performance obligation is satisfied over-time, as the equipment is being utilized by the customer to process the Company’s COVID-19 Assay Kits. Authentication Services The Company recognizes revenue for authentication services upon satisfying its promises to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company services are complete, which in nearly all cases is when the authentication report is released to the customer. Clinical Laboratory Testing Services The Company records revenue for its clinical laboratory testing service contracts, which includes its COVID-19 Surveillance Testing, upon satisfying its promise to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time that Company services are complete, which in nearly all cases is when the testing results are released to the customer. Research and Development Services The Company records revenue for its research and development contracts using the over-time revenue recognition model. Revenue is primarily measured using the cost-to-cost method, which the Company believes best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Revenues are recorded proportionally as costs are incurred. For contracts where the total costs cannot be estimated, revenues are recognized for the actual costs incurred during a period until the remaining costs to complete a contract can be estimated. The Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Disaggregation of Revenue The following table presents revenues disaggregated by our business operations and timing of revenue recognition: Three Month Period Ended: March 31, March 31, 2021 2020 Research and development services (over-time) $ 124,760 $ 286,598 Equipment lease services (over-time) 60,088 — Clinical laboratory testing services (point-in-time) 1,554,880 — Product and authentication services (point-in-time): Supply chain 67,057 12,646 Asset marking 140,169 110,697 Large scale DNA production — 142,532 Diagnostic kits 724,588 — Total $ 2,671,542 $ 552,473 Six Month Period Ended: March 31, March 31, 2021 2020 Research and development services (over-time) $ 388,473 $ 653,431 Equipment lease services (over-time) 106,088 — Clinical laboratory testing services (point-in-time) 2,327,650 — Product and authentication services (point-in-time): Supply chain 99,999 31,320 Asset marking 291,927 219,269 Large scale DNA production — 281,972 Diagnostic kits 1,073,546 — Total $ 4,287,683 $ 1,185,992 Contract balances As of March 31, 2021, the Company has entered into contracts with customers for which revenue has not yet been recognized. Consideration received from a customer prior to revenue recognition is recorded to a contract liability and is recognized as revenue when the Company satisfies the related performance obligations under the terms of the contract. The Company’s contract liabilities, which are reported as deferred revenue on the condensed consolidated balance sheet, consist almost entirely of research and development contracts where consideration has been received and the development services have not yet been fully performed. The opening and closing balances of the Company’s contract balances are as follows: October 1, March 31, $ Balance sheet classification 2020 2021 change Contract liabilities Deferred revenue $ 511,036 $ 350,057 $ 160,979 For the three and six-month periods ended March 31, 2021, the Company recognized $19,082 and $192,167, respectively of revenue that was included in Contract liabilities as of October 1, 2020. Inventories Inventories, which consist primarily of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable value, with cost determined by using the first-in, first-out (FIFO) method. Property and Equipment Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives. The estimated useful life for computer equipment, lab equipment and furniture is 3 years and leasehold improvements are amortized over the shorter of their useful life or the remaining lease terms. As of March 31, 2021, and September 30, 2020 there was $646,140 and $785,541 of construction in progress that was included in lab equipment and leasehold improvements, respectively. In addition, as of March 31, 2021 there was $269,095 of laboratory equipment that is being leased to a customer. The lease was determined to be an operating lease. Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. In its interim financial statements, the Company follows the guidance in ASC 270, “Interim Reporting” and ASC 740 “Income Taxes,” whereby the Company utilizes the expected annual effective tax rate in determining its income tax provisions for the interim periods. That rate differs from U.S. statutory rates primarily as a result of a valuation allowance related to the Company’s net operating loss carryforward as a result of the historical losses of the Company. Net Loss Per Share The Company presents loss per share utilizing a dual presentation of basic and diluted loss per share. Basic loss per share includes no dilution and has been calculated based upon the weighted average number of common shares outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon the exercise of the Company’s stock options, warrants, and secured convertible notes. For the three and six-month periods ended March 31, 2021 and 2020, common stock equivalent shares are excluded from the computation of the diluted loss per share as their effect would be anti-dilutive. Securities that could potentially dilute basic net income per share in the future were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the three and six-month periods ended March 31, 2021 and 2020 are as follows: 2021 2020 Warrants 776,518 2,121,755 Stock options 408,085 241,557 Secured convertible notes — 70,963 1,184,603 2,434,275 Stock-Based Compensation The Company accounts for stock-based compensation for employees, directors, and nonemployees in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options is estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 740, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the consolidated statements of operations. Concentrations Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and cash equivalents with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. As of March 31, 2021, and September 30,2020, the Company had cash and cash equivalents of approximately $13,308,000 and $7,300,000 respectively in excess of the FDIC insurance limit. The Company's revenues earned from sale of products and services for the three-month period ended March 31, 2021 included an aggregate of 30% and 21% from two customers, respectively. The Company's revenues earned from sale of products and services for the six-month period ended March 31, 2021 included an aggregate of 29% and 16% from two customers, respectively. The Company’s revenues earned from sale of products and services for the three-month period ended March 31, 2020 included an aggregate of 18%, 18% and 19% from three customers, respectively. The Company’s revenues earned from sales of product and services for the six-month period ended March 31, 2020 included an aggregate of 10%, 12%, 14% and 21% from four customers, respectively. Two customers accounted for 65% of the Company’s accounts receivable at March 31, 2021. Four customers accounted for 74% of the Company’s accounts receivable at September 30, 2020. Recent Accounting Standards In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, “Debt: Debt with Conversion and Other Options,” that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, “Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of ASU 2020-06 to have a significant impact on its consolidated financial statements.

INVENTORIES

INVENTORIES	6 Months Ended
	Mar. 31, 2021
INVENTORIES
INVENTORIES	NOTE C — INVENTORIES Inventories consist of the following: March 31, September 30, 2021 2020 (unaudited) Raw materials $ 640,047 $ 387,815 Work in-progress 47,666 77,667 Finished goods 32,825 31,885 Total $ 720,538 $ 497,367

ACCOUNTS PAYABLE AND ACCRUED LI

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES	6 Months Ended
	Mar. 31, 2021
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES	NOTE D — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities are as follows: March 31, September 30, 2021 2020 (unaudited) Accounts payable $ 1,217,207 $ 1,250,021 Accrued salaries payable 388,818 525,602 Other accrued expenses 174,047 150,804 Total $ 1,780,072 $ 1,926,427

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Mar. 31, 2021
NOTES PAYABLE
NOTES PAYABLE	NOTE E — NOTES PAYABLE CARES Act Loan The Company received a loan of approximately $847,000 on May 1, 2020 from Bank of America as lender pursuant to the PPP of the CARES Act. All or a portion of the loan may be forgiven by the U.S. Small Business Administration (“SBA”) upon application by the Company beginning 60 days but not later than 130 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage interest, and covered utilities during the covered period as defined by the CARES Act. The Company used the proceeds from the loan to retain employees, maintain payroll and make lease and utility payments. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 40% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25%. In the event the loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. The Company's PPP loan, including accrued interest was fully forgiven on February 26, 2021. The forgiveness of the loan resulted in a gain on extinguishment of debt of $839,945 for the three and six-month periods ended March 31, 2021. Repayment of the July 2019 Notes On October 9, 2020, the Company entered into a letter agreement (the “Letter Agreement”) with Dillon Hill Capital, LLC (“Dillon Hill”), as sole holder of the $1.5 million of secured convertible notes issued in July 2019 (the “July 2019 Notes”), providing for the repayment in full of the July 2019 Notes, in an aggregate amount of $1,665,581 (the “Payoff Amount”), representing the outstanding principal amount of the July 2019 Notes plus accrued but unpaid interest through the scheduled maturity of the July 2019 Notes. The Company paid the Payoff Amount to Dillon Hill on October 9, 2020. As of October 9, 2020, all of the obligations and liabilities of the Company and its affiliates under the July 2019 Notes, the Purchase Agreement, and the Security Agreements, and any other related documents and instruments, were satisfied in full, and all related liens, mortgages or other security interests were automatically released. Based solely on a review of Schedule 13G filings with the SEC, Dillon Hill at the time of the repayment of the July 2019 Notes and thereafter has been a greater than 5% shareholder in the Company’s common stock. Warrant Exercise Agreement In conjunction with the Letter Agreement discussed above, on October 7, 2020, the Company entered into Warrant Exercise Agreements with Dillon Hill and its affiliate, Dillon Hill Investment Company LLC (together, the “Investors”), whereby 318,000 of the warrants issued to the Investors in the Company’s November 2019 underwritten public offering (the “2019 Warrants”) with an exercise price of $5.25 per share were exercised. The gross proceeds to the Company from this partial exercise of the 2019 Warrants is $1,669,500. In consideration of this partial exercise of the 2019 Warrants and of the consent to repayment of the July 2019 Notes, as described above, the Company agreed to issue 159,000 replacement warrants (the “Replacement Warrants”) to the Investors, which is an amount equal to one-half the amount of the 2019 Warrants exercised pursuant to the Warrant Exercise Agreements. The Replacement Warrants have an exercise price of $7.54. The Warrant Exercise Agreements expired on January 5, 2021. Each Replacement Warrant is exercisable beginning on the date of issuance thereof and ending on the five-year anniversary of such date. The exercise price and number of shares of common stock issuable upon exercise of the Replacement Warrants will be subject to adjustment in the event of any stock dividend, split, recapitalization, reorganization, or similar transaction, as described in the Replacement Warrant. On each of December 9 and 10, 2020, the Investors exercised 100,000 of their 2019 Warrants, for an aggregate exercise of 200,000 of their 2019 Warrants, resulting in total net proceeds to the Company of approximately $1.1 million. As a result of these exercises, pursuant to the Warrant Exercise Agreements the Company issued to the Investors an aggregate of 100,000 additional replacement warrants, which are substantially similar to the Replacement Warrants described above except that 50,000 of the newly-issued replacement warrants have an exercise price of $6.57 and 50,000 of such replacement warrants have an exercise price of $6.46. No additional 2019 Warrants were exercised by January 5, 2021 and no additional replacement warrants were issued. The repayment of the July 2019 Notes resulted in a loss on extinguishment of debt of $1,774,662 for the six-month period ended March 31, 2021. Included in the loss on extinguishment of debt is $1,640,245 for the fair value of the Replacement Warrants (described above) that were issued in conjunction with the payoff of the July 2019 Notes.

CAPITAL STOCK

CAPITAL STOCK	6 Months Ended
	Mar. 31, 2021
CAPITAL STOCK
CAPITAL STOCK	NOTE F — CAPITAL STOCK On January 13, 2021, the Company closed on a registered direct public offering (the “Offering) of 1,810,000 shares (the “Shares”) of the Company’s common stock, pursuant to (i) the securities purchase agreement, dated January 10, 2021, by and between the Company and certain institutional investors(the “Purchasers”) whereby the Company agreed to issue and sell the Shares directly to the Purchasers at a price of $8.30 per share of Common Stock and (ii) the placement agency agreement, dated January 10, 2021, by and between the Company and Roth Capital Partners, LLC (the “Placement Agent”).

WARRANTS AND STOCK OPTIONS

WARRANTS AND STOCK OPTIONS	6 Months Ended
	Mar. 31, 2021
WARRANTS AND STOCK OPTIONS
WARRANTS AND STOCK OPTIONS	NOTE G —WARRANTS AND STOCK OPTIONS Warrants The following table summarizes the changes in warrants outstanding. These warrants were granted in lieu of cash compensation for services performed or as financing expenses in connection with the sales of the Company’s common stock. Transactions involving warrants (see Note E) are summarized as follows: Weighted Average Exercise Number of Price Per Shares Share Balance at October 1, 2020 1,038,919 $ 10.83 Granted 259,000 7.14 Exercised (520,151) 5.25 Cancelled or expired (1,250) 160.54 Balance at March 31, 2021 776,518 $ 13.10 Stock Options For the three and six-month periods ended March 31, 2021, the Company issued an aggregate of 80,862 and 154,005 options, respectively to employees, officers, non-employee board of director members and a consultant. The fair value of options granted during the three and six-month periods ended March 31, 2021 was determined using the Black Scholes Option Pricing Model. For the purposes of the valuation model, the Company used the simplified method for determining the granted options expected lives. The simplified method is used since the Company does not have adequate historical data to utilize in calculating the expected term of options. The fair value for options granted during the three-month period ended March 31, 2021 was calculated using the following weighted average assumptions: stock price $5.49; exercise price $5.49; expected term 5 years; dividend yield 0; volatility 138%; and risk-free rate of 0.38%. The fair value for options granted during the six-month period ended March 31, 2021 was calculated using the following weighted average assumptions: stock price $6.46; exercise price $6.46; expected term 5.13 years; dividend yield 0; volatility 140 %; and risk-free rate of 0.36%.The weighted average grant date fair value per share for options granted during the three and six-month periods ended March 31, 2021 was $4.83 and $5.73, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Mar. 31, 2021
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE H — COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases office space under an operating lease in Stony Brook, New York for its corporate headquarters. The lease is for a 30,000 square foot building. The term of the lease commenced on June 15, 2013 and expired on May 31, 2017, with the option to extend the lease for two additional three-year periods. The Company has exercised its option to extend the lease for one additional three-year period ending May 31, 2019. The base rent during the additional three-year period is $458,098 per annum. During November 2019, the Company extended this lease until January 15, 2020. In addition to the office space, the Company also has 2,200 square feet of laboratory space. On January 20, 2020, the Company entered into an agreement to amend both of these leases, extending the term for the corporate headquarters as well as the laboratory space until January 15, 2021, with a one-year renewal option. During October 2020, the Company exercised the one-year renewal option, extending the term for this lease until January 15, 2022. The Company also has a satellite testing facility in Ahmedabad, India, which occupies 1,108 square feet for a three-year term beginning November 1, 2017. During September 2020, the Company renewed this lease with a new expiration date of September 30, 2021. The base rent is approximately $6,500 per annum. The Company’s total short-term lease obligation as of March 31, 2021 is $427,925. The total rent expense for the three and six-month periods ended March 31, 2021 were $141,650 and $284,495, respectively. The total rent expense for the three and six-month periods ended March 31, 2020 were $153,645 and $287,250, respectively. Employment Agreement The employment agreement with Dr. James Hayward, the Company’s President and Chief Executive Officer (“CEO”), entered into in July 2016 provides that he will be the Company’s CEO and will continue to serve on the Company’s Board of Directors. On July 28, 2017, a new employment agreement was entered into with the CEO effective July 1, 2017. The initial term was from July 1, 2017 through June 30, 2018, with automatic one-year renewal periods. As of June 30, 2020, the employment contract renewed for an additional year. Under the new agreement, the CEO will be eligible for a special cash incentive bonus of up to $800,000, $300,000 of which is payable if and when annual revenue reaches $8 million and $100,000 of which would be payable for each $2 million of annual revenue in excess of $8 million. Pursuant to the contract, the CEO’s annual salary is $400,000. The Board of Directors, acting in its discretion, may grant annual bonuses to the CEO. The CEO will be entitled to certain benefits and perquisites and will be eligible to participate in retirement, welfare and incentive plans available to the Company’s other employees. The employment agreement with the CEO also provides that if he is terminated before the end of the initial or a renewal term by the Company without cause or if the CEO terminates his employment for good reason, then, in addition to previously earned and unpaid salary, bonus and benefits, and subject to the delivery of a general release and continuing compliance with restrictive covenants, the CEO will be entitled to receive a pro rata portion of the greater of either (X) the annual bonus he would have received if employment had continued through the end of the year of termination or (Y) the prior year’s bonus; salary continuation payments for two years following termination equal to the greater of (i) three times base salary or (ii) two times base salary plus bonus; company-paid COBRA continuation coverage for 18 months post-termination; continuing life insurance benefits (if any) for two years; and extended exercisability of outstanding vested options (for three years from termination date or, if earlier, the expiration of the fixed option term). If termination of employment as described above occurs within six months before or two years after a change in control of the Company, then, in addition to the above payments and benefits, all of the CEO’s outstanding options and other equity incentive awards will become fully vested and the CEO will receive a lump sum payment of the amounts that would otherwise be paid as salary continuation. In general, a change in control will include a 30% or more change in ownership of the Company. Upon termination due to death or disability, the CEO will generally be entitled to receive the same payments and benefits he would have received if his employment had been terminated by the Company without cause (as described in the preceding paragraph), other than salary continuation payments. Effective March 15, 2018, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”), approved a bonus of $121,125 that would be payable to the CEO when the Company reaches $3,000,000 in revenues for two consecutive quarters or $12,000,000 in revenues for a fiscal year, provided that the CEO is still employed by the Company on such date (the “Revenue Bonus”). Effective May 2, 2018, the Compensation Committee, increased the amount of the Revenue Bonus to $403,623; effective December 27, 2018, to $553,623; and effective December 5, 2019 to $753,623. The revenue targets underlying the Revenue Bonus have not yet been achieved. The Revenue Bonus has no expiration date and may be earned at any time during the CEO’s employment if the Revenue Goals are achieved. On March 2, 2021, the Company entered into an agreement with the CEO, pursuant to which the Company agreed to accelerate the payment of $556,840 of the Revenue Bonus to the CEO in recognition of his contributions to the Company. In exchange for the payment of the Revenue Bonus, the CEO agreed to waive his right to earn any remaining portions of the Revenue Bonus. The CEO voluntarily reduced his salary for the fiscal years ended September 30, 2020 and 2019. As of October 3, 2020, the Company has re-affirmed the employment agreement's annual salary of $400,000, and from that date the CEO's salary will be paid at such rate. On October 19, 2020, the Company awarded the CEO, a one-time discretionary bonus, to be paid in cash, of $250,000, in recognition of his contributions to the Company. Litigation From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the recorded liability includes probable and estimable legal costs associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. There is no pending litigation involving the Company at this time.

BASIS OF PRESENTATION AND SUM_2

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Policies)	6 Months Ended
	Mar. 31, 2021
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES
Interim Financial Statements	Interim Financial Statements The accompanying condensed consolidated financial statements as of March 31, 2021 and for the three and six-month periods ended March 31, 2021 and 2020 are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended September 30, 2020 and footnotes thereto included in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission (“SEC”) on December 17, 2020, as amended.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, APDN (B.V.I.) Inc., Applied DNA Sciences Europe Limited, and Applied DNA Sciences India Private Limited, ADCL and its majority-owned subsidiary, LineaRx, Inc. ("LRx"). Significant inter-company transactions and balances have been eliminated in consolidation. The condensed consolidated balance sheet as of September 30, 2020 contained herein has been derived from the audited consolidated financial statements as of September 30, 2020 but does not include all disclosures required by GAAP.
Liquidity	Liquidity The Company has recurring net losses, which have resulted in an accumulated deficit of $276,162,006 as of March 31, 2021. The Company incurred a net loss of $6,324,140 and generated negative operating cash flow of $7,426,015 for the six-month period ended March 31, 2021. At March 31, 2021 the Company had cash and cash equivalents of $13,925,997 and working capital of $15,289,055. The Company has historically financed its operations principally from the sale of equity and equity-linked securities. Through March 31, 2021, the Company has dedicated most of its financial resources to research and development, including the development and validation of its own technologies as well as, advancing its intellectual property, and general and administrative activities. As discussed in Note F, on January 13, 2021, the Company closed on a registered direct public offering of 1,810,000 shares of Common Stock at a purchase price of $8.30 per share. Net proceeds, after deducting underwriting discounts and commissions, and other offering expenses, were approximately $13.8 million. In addition, during the six-month period ended March 31, 2021, 520,151 warrants were exercised, resulting in net proceeds, after deducting underwriting commissions, to the Company of approximately $2.6 million. The Company expects to finance its operations primarily through cash received from the January 2021 registered direct public offering and the warrant exercises, discussed above, as well as collection of its accounts receivable. The Company estimates that it will have sufficient cash and cash equivalents to fund operations for the next twelve months from the date of filing of this quarterly report. The Company may require additional funds to complete the continued development of its products, services, product manufacturing, and to fund expected additional losses from operations until revenues are sufficient to cover its operating expenses. In addition, if the Company is successful with any of its preclinical vaccine candidates, the Company would require additional funds to complete the vaccine candidate development. If revenues are not sufficient to cover the Company’s operating expenses, and if the Company is not successful in obtaining the necessary additional financing, the Company will most likely be forced to reduce operations.
COVID-19 Risks and Uncertainties	COVID-19 Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic which has spread throughout the world. The Company is monitoring this situation, and it is unable to predict the impact that COVID-19 will have on the Company’s future financial position and operating results due to numerous uncertainties. The Company believes that the COVID-19 pandemic adversely impacted the global textile industry, which has resulted in a reduction of textile related revenues, specifically as it relates to our cotton customer contract. On March 7, 2020 the Governor of New York declared a health emergency and issued an order (as amended) to close all nonessential businesses, which was followed by a phased reopening. Portions of the Company’s business were deemed to be an essential business, such as its government and pharmaceutical contracts, as well as its vaccine and diagnostic candidate development. However, the Company has experienced, and may continue to experience in the future, facility closures related to its “nonessential” businesses, and pursuant to the government order, the Company reduced the scope of its operations. The Company received a loan of approximately $847,000 on May 1, 2020 from Bank of America as lender pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). As disclosed in Note E, the PPP loan was fully forgiven during February 2021. As a result of COVID-19, the Company has experienced a decline in revenues from non-biological tagging and related services, primarily as it relates to its cotton customer contract. Historically revenues from the Company's cotton customer contract are seasonal and recognized primarily during the Company’s first and fourth fiscal quarters. However, due to the impacts of the COVID-19 global pandemic, the Company did not recognize revenue for the shipment of DNA concentrate relating to its cotton customer contract during the three or six-month periods ended March 31, 2021. However, the Company has experienced an increase in its Biotherapeutic Contract Research and Manufacturing business as a result of COVID-19, specifically as it relates the Company’s COVID-19 Diagnostic Testing and COVID-19 Surveillance Testing. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s future operations and liquidity is uncertain as of the date of this Quarterly Report.
Use of Estimates	Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most complex and subjective estimates include revenue recognition, allowance for doubtful accounts, recoverability of long-lived assets, including the values assigned to goodwill, intangible assets and property and equipment, fair value calculations for stock-based compensation and warrants, contingencies and management’s anticipated liquidity. Management reviews its estimates on a regular basis and the effects of any material revisions are reflected in the consolidated financial statements in the period they are deemed necessary. Accordingly, actual results could differ from those estimates.
Revenue Recognition	Revenue Recognition The Company follows Financial Accounting Standards Board (“FASB”) issued accounting standard updates which clarify the principles for recognizing revenue arising from contracts with customers (“ASC 606” or “Topic 606”). The core principle of the revenue standard is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 applies a five-step model for revenue measurement and recognition and also requires increased disclosures including the nature, amount, timing, and uncertainty of revenue and cash flows related to contracts with clients. The Company measures revenue at the amounts that reflect the consideration to which it is expected to be entitled in exchange for transferring control of goods and services to customers. The Company recognizes revenue either at the point in time or over the period of time that performance obligations to customers are satisfied. The Company’s contracts with customers may include multiple performance obligations (e.g. taggants, maintenance, authentication services, research and development services, etc.). For such arrangements, the Company allocates revenues to each performance obligation based on their relative standalone selling price. The Company recognizes revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration it expects to receive for those goods or services, including any variable consideration. Due to the short-term nature of the Company’s contracts with customers, it has elected to apply the practical expedients under Topic 606 to: (1) expense as incurred, incremental costs of obtaining a contract and (2) not adjust the consideration for the effects of a significant financing component for contracts with an original expected duration of one year or less. Product Revenues and Authentication Services The Company’s PCR-produced linear DNA products are manufactured in accordance with contracts with customers. The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which in nearly all cases is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The Company does not consider payment terms of a performance obligation for customers with contractual terms that are one year or less and has elected the practical expedient. Nearly all the Company’s sales contracts reflect market pricing at the time the contract is executed, or are one year or less, and generally provide for shipment within 30 to 60 days after the price has been agreed upon with the customer. The Company invoices customers upon shipment, and its collection terms range, on average, from 30 to 60 days. Linea TM COVID-19 Assay Kit Contract Under the Company’s Linea TM COVID-19 Assay Kit contract, the customer has the right to use certain laboratory equipment solely for the processing of the Company’s COVID-19 Assay Kit. The current contract has a term of twelve months and no minimum purchase requirements. This contract has an embedded lease for the right to use the Company’s equipment and the Company determines the amount of lease revenue allocated to the equipment based on the relative standalone selling prices. The Company evaluated the terms of this embedded lease and determined its classification as an operating lease. The cost of the equipment is capitalized within property and equipment. Equipment Lease Revenues As discussed above, the Company leases certain laboratory equipment to a customer under its Linea TM COVID-19 Assay Kit contract. The contract includes the sale of the Company’s Linea TM COVID-19 Assay Kits (“COVID-19 Assay Kits”), as well as a lease for certain laboratory equipment for the processing of the COVID-19 Assay Kits. Revenues for the lease of equipment under this contract are recognized as an operating lease as the equipment is being utilized by the customer. This contract provides the customer the right to use the equipment for the term of the contract solely for the purpose of processing the Company’s COVID-19 Assay Kits. Lease revenue from this contract is presented in product revenues in the Company’s condensed consolidated statement of operations. Lease revenue was $89,447 and $141,016, respectively for the three and six-month periods ended March 31, 2021. This performance obligation is satisfied over-time, as the equipment is being utilized by the customer to process the Company’s COVID-19 Assay Kits. Authentication Services The Company recognizes revenue for authentication services upon satisfying its promises to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time the Company services are complete, which in nearly all cases is when the authentication report is released to the customer. Clinical Laboratory Testing Services The Company records revenue for its clinical laboratory testing service contracts, which includes its COVID-19 Surveillance Testing, upon satisfying its promise to provide services to customers under the terms of its contracts. These performance obligations are satisfied at the point in time that Company services are complete, which in nearly all cases is when the testing results are released to the customer. Research and Development Services The Company records revenue for its research and development contracts using the over-time revenue recognition model. Revenue is primarily measured using the cost-to-cost method, which the Company believes best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Revenues are recorded proportionally as costs are incurred. For contracts where the total costs cannot be estimated, revenues are recognized for the actual costs incurred during a period until the remaining costs to complete a contract can be estimated. The Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Disaggregation of Revenue The following table presents revenues disaggregated by our business operations and timing of revenue recognition: Three Month Period Ended: March 31, March 31, 2021 2020 Research and development services (over-time) $ 124,760 $ 286,598 Equipment lease services (over-time) 60,088 — Clinical laboratory testing services (point-in-time) 1,554,880 — Product and authentication services (point-in-time): Supply chain 67,057 12,646 Asset marking 140,169 110,697 Large scale DNA production — 142,532 Diagnostic kits 724,588 — Total $ 2,671,542 $ 552,473 Six Month Period Ended: March 31, March 31, 2021 2020 Research and development services (over-time) $ 388,473 $ 653,431 Equipment lease services (over-time) 106,088 — Clinical laboratory testing services (point-in-time) 2,327,650 — Product and authentication services (point-in-time): Supply chain 99,999 31,320 Asset marking 291,927 219,269 Large scale DNA production — 281,972 Diagnostic kits 1,073,546 — Total $ 4,287,683 $ 1,185,992 Contract balances As of March 31, 2021, the Company has entered into contracts with customers for which revenue has not yet been recognized. Consideration received from a customer prior to revenue recognition is recorded to a contract liability and is recognized as revenue when the Company satisfies the related performance obligations under the terms of the contract. The Company’s contract liabilities, which are reported as deferred revenue on the condensed consolidated balance sheet, consist almost entirely of research and development contracts where consideration has been received and the development services have not yet been fully performed. The opening and closing balances of the Company’s contract balances are as follows: October 1, March 31, $ Balance sheet classification 2020 2021 change Contract liabilities Deferred revenue $ 511,036 $ 350,057 $ 160,979 For the three and six-month periods ended March 31, 2021, the Company recognized $19,082 and $192,167, respectively of revenue that was included in Contract liabilities as of October 1, 2020.
Inventories	Inventories Inventories, which consist primarily of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable value, with cost determined by using the first-in, first-out (FIFO) method.
Property and Equipment	Property and Equipment Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives. The estimated useful life for computer equipment, lab equipment and furniture is 3 years and leasehold improvements are amortized over the shorter of their useful life or the remaining lease terms. As of March 31, 2021, and September 30, 2020 there was $646,140 and $785,541 of construction in progress that was included in lab equipment and leasehold improvements, respectively. In addition, as of March 31, 2021 there was $269,095 of laboratory equipment that is being leased to a customer. The lease was determined to be an operating lease.
Income Taxes	Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. In its interim financial statements, the Company follows the guidance in ASC 270, “Interim Reporting” and ASC 740 “Income Taxes,” whereby the Company utilizes the expected annual effective tax rate in determining its income tax provisions for the interim periods. That rate differs from U.S. statutory rates primarily as a result of a valuation allowance related to the Company’s net operating loss carryforward as a result of the historical losses of the Company.
Net Loss per Share	Net Loss Per Share The Company presents loss per share utilizing a dual presentation of basic and diluted loss per share. Basic loss per share includes no dilution and has been calculated based upon the weighted average number of common shares outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon the exercise of the Company’s stock options, warrants, and secured convertible notes. For the three and six-month periods ended March 31, 2021 and 2020, common stock equivalent shares are excluded from the computation of the diluted loss per share as their effect would be anti-dilutive. Securities that could potentially dilute basic net income per share in the future were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the three and six-month periods ended March 31, 2021 and 2020 are as follows: 2021 2020 Warrants 776,518 2,121,755 Stock options 408,085 241,557 Secured convertible notes — 70,963 1,184,603 2,434,275
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based compensation for employees, directors, and nonemployees in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options is estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 740, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the consolidated statements of operations.
Concentrations	Concentrations Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and cash equivalents with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. As of March 31, 2021, and September 30,2020, the Company had cash and cash equivalents of approximately $13,308,000 and $7,300,000 respectively in excess of the FDIC insurance limit. The Company's revenues earned from sale of products and services for the three-month period ended March 31, 2021 included an aggregate of 30% and 21% from two customers, respectively. The Company's revenues earned from sale of products and services for the six-month period ended March 31, 2021 included an aggregate of 29% and 16% from two customers, respectively. The Company’s revenues earned from sale of products and services for the three-month period ended March 31, 2020 included an aggregate of 18%, 18% and 19% from three customers, respectively. The Company’s revenues earned from sales of product and services for the six-month period ended March 31, 2020 included an aggregate of 10%, 12%, 14% and 21% from four customers, respectively. Two customers accounted for 65% of the Company’s accounts receivable at March 31, 2021. Four customers accounted for 74% of the Company’s accounts receivable at September 30, 2020.
Recent Accounting Standards	Recent Accounting Standards In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, “Debt: Debt with Conversion and Other Options,” that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, “Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of ASU 2020-06 to have a significant impact on its consolidated financial statements.

BASIS OF PRESENTATION AND SUM_3

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Tables)	6 Months Ended
	Mar. 31, 2021
BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES
Schedule of operations and timing of revenue recognition	The following table presents revenues disaggregated by our business operations and timing of revenue recognition: Three Month Period Ended: March 31, March 31, 2021 2020 Research and development services (over-time) $ 124,760 $ 286,598 Equipment lease services (over-time) 60,088 — Clinical laboratory testing services (point-in-time) 1,554,880 — Product and authentication services (point-in-time): Supply chain 67,057 12,646 Asset marking 140,169 110,697 Large scale DNA production — 142,532 Diagnostic kits 724,588 — Total $ 2,671,542 $ 552,473 Six Month Period Ended: March 31, March 31, 2021 2020 Research and development services (over-time) $ 388,473 $ 653,431 Equipment lease services (over-time) 106,088 — Clinical laboratory testing services (point-in-time) 2,327,650 — Product and authentication services (point-in-time): Supply chain 99,999 31,320 Asset marking 291,927 219,269 Large scale DNA production — 281,972 Diagnostic kits 1,073,546 — Total $ 4,287,683 $ 1,185,992
Schedule of opening and closing contract balances	The opening and closing balances of the Company’s contract balances are as follows: October 1, March 31, $ Balance sheet classification 2020 2021 change Contract liabilities Deferred revenue $ 511,036 $ 350,057 $ 160,979
Schedule of anti-dilutive securities not included computation of net loss per share	2021 2020 Warrants 776,518 2,121,755 Stock options 408,085 241,557 Secured convertible notes — 70,963 1,184,603 2,434,275

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Mar. 31, 2021
INVENTORIES
Schedule of inventories	March 31, September 30, 2021 2020 (unaudited) Raw materials $ 640,047 $ 387,815 Work in-progress 47,666 77,667 Finished goods 32,825 31,885 Total $ 720,538 $ 497,367

ACCOUNTS PAYABLE AND ACCRUED _2

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)	6 Months Ended
	Mar. 31, 2021
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Schedule of accounts payable and accrued liabilities	March 31, September 30, 2021 2020 (unaudited) Accounts payable $ 1,217,207 $ 1,250,021 Accrued salaries payable 388,818 525,602 Other accrued expenses 174,047 150,804 Total $ 1,780,072 $ 1,926,427

WARRANTS AND STOCK OPTIONS (Tab

WARRANTS AND STOCK OPTIONS (Tables)	6 Months Ended
	Mar. 31, 2021
WARRANTS AND STOCK OPTIONS
Schedule of transactions involving warrants	Weighted Average Exercise Number of Price Per Shares Share Balance at October 1, 2020 1,038,919 $ 10.83 Granted 259,000 7.14 Exercised (520,151) 5.25 Cancelled or expired (1,250) 160.54 Balance at March 31, 2021 776,518 $ 13.10

BASIS OF PRESENTATION AND SUM_4

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Summary of revenues disaggregated by our business operations and timing of revenue recognition (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Total	$ 2,671,542	$ 552,473	$ 4,287,683	$ 1,185,992
Research and development services (over-time)
Disaggregation of Revenue [Line Items]
Total	124,760	286,598	388,473	653,431
Equipment lease services (over-time)
Disaggregation of Revenue [Line Items]
Total	60,088	0	106,088
Clinical laboratory testing services (point-in-time)
Disaggregation of Revenue [Line Items]
Total	1,554,880	0	2,327,650
Supply chain
Disaggregation of Revenue [Line Items]
Total	67,057	12,646	99,999	31,320
Asset marking
Disaggregation of Revenue [Line Items]
Total	140,169	110,697	291,927	219,269
Large scale DNA production
Disaggregation of Revenue [Line Items]
Total	0	142,532		$ 281,972
Diagnostic kits
Disaggregation of Revenue [Line Items]
Total	$ 724,588	$ 0	$ 1,073,546

BASIS OF PRESENTATION AND SUM_5

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Contract liabilities (Details) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2021	Oct. 01, 2020	Sep. 30, 2020
Liabilities and (deficit) equity
Contract liabilities	$ 350,057	$ 350,057		$ 511,036
Revenue recognized in contract liabilities	19,082	192,167
Deferred Revenue
Liabilities and (deficit) equity
Contract liabilities	350,057	$ 350,057	$ 511,036
Increase (Decrease) in Contract with Customer, Liability	$ 160,979

BASIS OF PRESENTATION AND SUM_6

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Summary of potential stock issuances under various options, and warrants (Details) - shares	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of diluted net loss per share	1,184,603	2,434,275
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of diluted net loss per share	776,518	2,121,755
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of diluted net loss per share	408,085	241,557
Secured convertible note
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of diluted net loss per share	0	70,963

BASIS OF PRESENTATION AND SUM_7

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Additional information (Details)	Jan. 13, 2021USD ($)$ / sharesshares	Dec. 10, 2020USD ($)	Oct. 07, 2020USD ($)	Sep. 30, 2020USD ($)$ / shares	May 01, 2020USD ($)	Mar. 31, 2021USD ($)customer$ / sharesshares	Dec. 31, 2020USD ($)customer	Mar. 31, 2020USD ($)	Dec. 31, 2019USD ($)customer	Mar. 31, 2021USD ($)customer$ / shares	Mar. 31, 2020USD ($)	Sep. 30, 2020USD ($)customer$ / shares
Concentration Risk [Line Items]
Retained Earnings (Accumulated Deficit)				$ (269,835,650)		$ (276,162,006)				$ (276,162,006)		$ (269,835,650)
Net loss						(1,517,078)	$ (4,807,062)	$ (2,950,905)	$ (2,662,741)	(6,324,140)	$ (5,613,646)
Negative operating cash flow										7,426,015	5,151,404
Cash and cash equivalents				$ 7,786,743		13,925,997				13,925,997		$ 7,786,743
Working Capital Surplus Deficit						$ 15,289,055				$ 15,289,055
Common Stock, Par Or Stated Value Per Share | $ / shares				$ 0.001		$ 0.001				$ 0.001		$ 0.001
Research and development						$ 874,055		$ 703,018		$ 1,622,420	1,267,444
Allowance on accounts receivable (in dollars)				$ 11,968		20,830				20,830		$ 11,968
Depreciation method							straight-line method
Property, Plant and Equipment, Net				1,277,655		2,422,628				2,422,628		1,277,655
Net proceeds from exercise of warrants		$ 1,100,000								2,613,929	$ 2,768,133
Excess of FDIC insurance limit				7,300,000		$ 13,308,000				13,308,000		7,300,000
PPP Loan
Concentration Risk [Line Items]
Proceeds from Issuance of Debt					$ 847,000
Public Offering
Concentration Risk [Line Items]
Number of common stock issued | shares	1,810,000
Public offering price for each share together with warrant | $ / shares	$ 8.30
Number of warrants exercised | shares						520,151
Net proceeds from exercise of warrants			$ 1,669,500			$ 2,600,000
Net proceeds of offering after underwriter discounts, commissions and other offering expenses	$ 13,800,000
Computer equipment
Concentration Risk [Line Items]
Estimated useful life for computer equipment, lab equipment and furniture						P3Y
Construction in progress				$ 785,541		$ 646,140				646,140		$ 785,541
Lab equipment
Concentration Risk [Line Items]
Estimated useful life for computer equipment, lab equipment and furniture						P3Y
Property, Plant and Equipment, Net						$ 269,095				269,095
Furniture
Concentration Risk [Line Items]
Estimated useful life for computer equipment, lab equipment and furniture						P3Y
Leasehold improvements
Concentration Risk [Line Items]
Lease revenue						$ 89,447				$ 141,016
Two customer
Concentration Risk [Line Items]
Concentration risk percentage						30.00%
Total Revenue
Concentration Risk [Line Items]
Number of customers | customer							2		4
Total Revenue | One customer
Concentration Risk [Line Items]
Concentration risk percentage									12.00%
Total Revenue | Two customer
Concentration Risk [Line Items]
Concentration risk percentage						19.00%			14.00%
Total Revenue | Three customers
Concentration Risk [Line Items]
Concentration risk percentage						18.00%			21.00%
Accounts Receivable | Three customers
Concentration Risk [Line Items]
Concentration risk percentage						65.00%
Number of customers | customer						2
Accounts Receivable | Four customer
Concentration Risk [Line Items]
Concentration risk percentage				74.00%
Number of customers | customer												4
Customer Concentration Risk | Two customer
Concentration Risk [Line Items]
Concentration risk percentage						21.00%				29.00%
Number of customers | customer										2
Customer Concentration Risk | Total Revenue | Two customer
Concentration Risk [Line Items]
Concentration risk percentage										16.00%
Customer Concentration Risk | Total Revenue | Three customers
Concentration Risk [Line Items]
Concentration risk percentage						18.00%		19.00%
Customer Concentration Risk | Total Revenue | Four customer
Concentration Risk [Line Items]
Concentration risk percentage											10.00%

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Mar. 31, 2021	Sep. 30, 2020
INVENTORIES
Raw materials	$ 640,047	$ 387,815
Work-in-progress	47,666	77,667
Finished goods	32,825	31,885
Total	$ 720,538	$ 497,367

ACCOUNTS PAYABLE AND ACCRUED _3

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($)	Mar. 31, 2021	Sep. 30, 2020
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable	$ 1,217,207	$ 1,250,021
Accrued salaries payable	388,818	525,602
Other accrued expenses	174,047	150,804
Total	$ 1,780,072	$ 1,926,427

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	Dec. 11, 2020	Dec. 10, 2020	Dec. 09, 2020	Oct. 09, 2020	Oct. 07, 2020	May 01, 2020	Mar. 31, 2021	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Debt Instrument [Line Items]
Interest rate (as a percent)							40.00%	40.00%
Gain on extinguishment of debt								$ (1,774,662)	$ 0
Payroll costs exclude compensation								100,000
Proceeds from exercise of warrants		$ 1,100,000						$ 2,613,929	2,768,133
Term of the warrants					5 years
Investors exercised warrants		100,000	100,000
Aggregate exercised of warrants		200,000
Number of warrants exercised								520,151
Amortization of debt issuance costs								$ 0	$ 12,576
Secured notes payable										$ 1,499,116
Dillon Hill Capital, LLC
Debt Instrument [Line Items]
Minimum percentage of shareholding in the Company's common stock				5.00%
PPP Loan
Debt Instrument [Line Items]
Proceeds from Notes Payable						$ 847,000		$ 100,000
Interest rate (as a percent)							25.00%	25.00%
Public Offering
Debt Instrument [Line Items]
Exercise Price					$ 5.25
Proceeds from exercise of warrants					$ 1,669,500		$ 2,600,000
Number of warrants exercised					318,000
Secured Convertible Notes ("July 2019 Notes") | Dillon Hill Capital, LLC
Debt Instrument [Line Items]
Payoff Amount				$ 1,665,581
Secured notes payable				$ 1,500,000
Securities Purchase Agreement
Debt Instrument [Line Items]
Gain on extinguishment of debt							$ 839,945	$ 839,945
Replacement Warrants
Debt Instrument [Line Items]
Gain on extinguishment of debt								$ 1,640,245
Exercise Price					$ 7.54
Number of warrants agreed to be issued	100,000				159,000
Replacement warrants of $6.57 exercise price
Debt Instrument [Line Items]
Exercise Price	$ 6.57
Number of warrants agreed to be issued	50,000
Replacement warrants of $6.46 exercise price
Debt Instrument [Line Items]
Exercise Price	$ 6.46
Number of warrants agreed to be issued	50,000

CAPITAL STOCK (Details)

CAPITAL STOCK (Details) - Public Offering	Jan. 13, 2021$ / sharesshares
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items]
Common stock issued in private placement, net of offering costs (in shares) | shares	1,810,000
Public offering price for each share together with warrant | $ / shares	$ 8.30

WARRANTS AND STOCK OPTIONS (Det

WARRANTS AND STOCK OPTIONS (Details)	6 Months Ended
	Mar. 31, 2021$ / sharesshares
Number of Shares
Balance at October 1, 2020 | shares	1,038,919
Granted | shares	259,000
Exercised | shares	(520,151)
Cancelled or expired | shares	(1,250)
Balance at March 31, 2021 | shares	776,518
Weighted Average Exercise Price Per Share
Balance at October 1, 2020 | $ / shares	$ 10.83
Granted | $ / shares	7.14
Exercised | $ / shares	5.25
Cancelled or expired | $ / shares	160.54
Balance at March 31, 2021 | $ / shares	$ 13.10

WARRANTS AND STOCK OPTIONS - Op

WARRANTS AND STOCK OPTIONS - Options (Details) - $ / shares	3 Months Ended	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2021
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items]
Stock price	$ 5.49	$ 6.46
Exercise price	$ 5.49	$ 6.46
Expected term, years	5 years	5 years 1 month 17 days
Dividend yield	0.00%	0.00%
Volatility	138.00%	140.00%
Risk free rate	0.38%	0.36%
Board members
Share-Based Compensation Arrangement By Share-Based Payment Award [Line Items]
Granted	80,862	154,005
Exercise price	$ 4.83	$ 5.73

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Operating Leases (Details)	Nov. 01, 2017USD ($)ft²	Jun. 15, 2013USD ($)ft²	Mar. 31, 2021USD ($)	Mar. 31, 2020USD ($)	Mar. 31, 2021USD ($)	Mar. 31, 2020USD ($)	Oct. 31, 2020
COMMITMENTS AND CONTINGENCIES
Area of property under operating lease | ft²		30,000
Extended operating lease for additional period		3 years					1 year
Base rent during initial lease term per annum		$ 458,098
Area of laboratory space | ft²		2,200
Lease for satellite testing | ft²	1,108
Term lease	3 years
Base rent	$ 6,500
Short-term lease obligation			$ 427,925		$ 427,925
Total lease rental expenses			$ 141,650	$ 153,645	$ 284,495	$ 287,250

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES - Employment Agreement (Details) - USD ($)	Oct. 03, 2020	Dec. 05, 2019	Dec. 27, 2018	May 15, 2018	May 02, 2018	Jul. 28, 2017	Oct. 31, 2020	Oct. 19, 2020
COMMITMENTS AND CONTINGENCIES
Revenue bonus recorded to long term accrued liabilities							$ 556,840
Employment Agreement [Member] | CEO
COMMITMENTS AND CONTINGENCIES
Annual base salary	$ 400,000
One-time discretionary bonus awarded								$ 250,000
Approved bonus		$ 753,623	$ 553,623	$ 121,125	$ 403,623
Threshold revenue for two consecutive quarters				3,000,000
Threshold revenue for fiscal year				$ 12,000,000
New Employment Agreement | CEO
COMMITMENTS AND CONTINGENCIES
Agreement renewal period						1 year
Special cash incentive bonus						$ 800,000
Special cash incentive bonus payable on completing threshold annual revenue						300,000
Threshold annual revenue						8,000,000
Special cash incentive bonus payable on completing threshold annual revenue in excess of first threshold						100,000
Threshold annual revenue in excess of first threshold						2,000,000
Annual base salary						$ 400,000