Applied DNA Sciences (APDN) 10-Q 11 May 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2017	May 05, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	APPLIED DNA SCIENCES INC
Entity Central Index Key	744,452
Trading Symbol	apdn
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,351,483
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Current assets:
Cash and cash equivalents	$ 4,020,412	$ 4,479,274
Accounts receivable, net of allowance of $29,902 and $32,965 at March 31, 2017 and September 30, 2016, respectively	5,192,358	6,374,895
Inventories	353,582	297,759
Prepaid expenses and other current assets	182,848	200,006
Total current assets	9,749,200	11,351,934
Property, plant and equipment, net of accumulated depreciation of $1,464,845 at March 31, 2017 and $1,263,200 at September 30, 2016	672,347	792,499
Other assets:
Long term accounts receivables	1,044,780	1,535,000
Deposits	61,626	61,126
Deferred offering costs		13,986
Goodwill	285,386	285,386
Intangible assets, net of accumulated amortization of $545,915 and $423,649 at March 31, 2017 and September 30, 2016, respectively	1,403,634	1,525,900
Total Assets	13,216,973	15,565,831
Current liabilities:
Accounts payable and accrued liabilities	1,896,154	2,247,341
Deferred revenue	1,325,140	1,837,588
Total current liabilities	3,221,294	4,084,929
Long term accounts payable	141,099	215,500
Long term deferred revenue	563,634	900,000
Total liabilities	3,926,027	5,200,429
Commitments and contingencies
Stockholders' Equity
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2017 and September 30, 2016
Common stock, par value $0.001 per share; 500,000,000 shares authorized at March 31, 2017 and September 30, 2016; 26,351,483 and 24,078,756 shares issued and outstanding as of March 31, 2017 and September 30, 2016, respectively	26,351	24,079
Additional paid in capital	240,472,224	234,158,711
Accumulated deficit	(231,207,629)	(223,817,388)
Total stockholders' equity	9,290,946	10,365,402
Total Liabilities and Stockholders' Equity	13,216,973	15,565,831
Series A Preferred stock
Stockholders' Equity
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2017 and September 30, 2016
Series B Preferred stock
Stockholders' Equity
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2017 and September 30, 2016

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Allowance on accounts receivable (in dollars)	$ 29,902	$ 32,965
Accumulated depreciation on property, plant and equipment (in dollars)	1,464,845	1,263,200
Accumulated amortization on intangible assets (in dollars)	$ 545,915	$ 423,649
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 (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	26,351,483	24,078,756
Common stock, shares outstanding	26,351,483	24,078,756
Series A Preferred stock
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
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 (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Product revenues	$ 689,188	$ 178,371	$ 1,393,605	$ 871,585
Service revenues	216,185	394,951	414,776	1,025,851
Total revenues	905,373	573,322	1,808,381	1,897,436
Cost of revenues	297,372	253,734	572,204	514,646
Operating expenses:
Selling, general and administrative	3,230,371	2,522,735	7,131,288	5,619,051
Research and development	635,893	1,073,079	1,154,521	1,742,147
Depreciation and amortization	163,368	170,981	325,345	389,327
Total operating expenses	4,029,632	3,766,795	8,611,154	7,750,525
LOSS FROM OPERATIONS	(3,421,631)	(3,447,207)	(7,374,977)	(6,367,735)
Other income (expense):
Interest income, net	1,204	4,062	2,535	6,907
Other expense, net	(8,429)	(24,478)	(17,798)	(33,065)
Net loss before provision for income taxes	(3,428,856)	(3,467,623)	(7,390,240)	(6,393,893)
Provision for income taxes
NET LOSS	$ (3,428,856)	$ (3,467,623)	$ (7,390,240)	$ (6,393,893)
Net loss per share-basic and diluted (in dollars per share)	$ (0.13)	$ (0.14)	$ (0.29)	$ (0.27)
Weighted average shares outstanding- Basic and diluted (in shares)	26,351,483	24,072,092	25,886,892	23,307,134

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net loss	$ (7,390,240)	$ (6,393,893)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	325,345	389,327
Stock-based compensation expense	1,995,924	886,338
Write-off of security deposit		10,000
Loss on sale of property, plant and equipment		5,520
Common stock issued for consulting services		68,443
Provision for bad debts	21,247	22,313
Change in operating assets and liabilities:
Accounts receivable	1,651,510	380,350
Inventories	(55,823)
Prepaid expenses and other current assets and deposits	16,658	98,593
Accounts payable and accrued liabilities	(414,822)	(458,802)
Deferred revenue	(848,814)	(231,888)
Net cash used in operating activities	(4,699,015)	(5,223,699)
Cash flows used in investing activities:
Proceeds from sale of property, plant and equipment		5,500
Purchase of property, plant and equipment	(93,694)	(128,370)
Purchase of intangible assets		(37,353)
Net cash used in investing activities	(93,694)	(160,223)
Cash flows from financing activities:
Net proceeds from sale of common stock and warrants	4,333,847	7,853,155
Proceeds from the exercise of warrants		4,410
Net cash provided by financing activities	4,333,847	7,857,565
Net (decrease) increase in cash and cash equivalents	(458,862)	2,473,643
Cash and cash equivalents at beginning of period	4,479,274	7,312,184
Cash and cash equivalents at end of period	4,020,412	9,785,827
Supplemental Disclosures of Cash Flow Information:
Cash paid during period for interest
Cash paid during period for income taxes		4,858
Non-cash investing and financing activities:
Common stock issued upon cashless exercise of options and warrants		49
Reclassification of deferred offering costs to additional paid-in capital	13,986
Property, plant and equipment acquired, and included in accounts payable		417,399
Intangible assets acquired, and included in accounts payable		6,000
Issuance of options to settle accrued liability		$ 42,335

SUMMARY OF ACCOUNTING POLICIES

SUMMARY OF ACCOUNTING POLICIES	6 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
SUMMARY OF ACCOUNTING POLICIES	NOTE A — SUMMARY OF ACCOUNTING POLICIES General The accompanying condensed consolidated financial statements as of March 31, 2017 and for the three and six month periods ended March 31, 2017 and 2016 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 Rule 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 generally accepted accounting principles for complete consolidated 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, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017. 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, 2016 and footnotes thereto included in the Annual Report on Form 10-K of Applied DNA Sciences, Inc. (the “Company”) filed with the SEC on December 6, 2016. The condensed consolidated balance sheet as of September 30, 2016 contained herein has been derived from the audited consolidated financial statements as of September 30, 2016, but does not include all disclosures required by GAAP. Business and Basis of Presentation The Company is principally devoted to developing and marketing SigNature DNA technology solutions in the United States, Europe and Asia. To date, the Company has had a limited operating history with its current business model, and as a result, its operations have produced limited recurring revenues from its services and products; it has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment and development of a biotechnology company. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, APDN (B.V.I.) Inc. and Applied DNA Sciences Europe Limited, which currently have no operations or activity. Significant inter-company transactions and balances have been eliminated in consolidation. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year's presentation. Inventories Inventories, which consist primarily of raw materials, and finished goods, is stated at the lower of cost or market, with cost determined by using the first-in, first-out (FIFO) method. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”). ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and/or service has been performed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered or services provided and the collectability of those amounts. Provisions for allowances and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered, service has not been provided, or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered, the service has been provided, or no refund will be required. At March 31, 2017 and September 30, 2016, the Company recorded deferred revenue of $1,888,774 and $2,737,588, respectively. Revenue arrangements with multiple components are divided into separate units of accounting if certain criteria are met, including whether the delivered component has stand-alone value to the customer. Consideration received is allocated among the separate units of accounting based on their respective selling prices. The selling price for each unit is based on vendor-specific objective evidence, or VSOE, if available, third party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third party evidence is available. The applicable revenue recognition criteria are then applied to each of the units. Revenue for government contract awards, which supports the Company’s development efforts on specific projects, is recognized as milestones are achieved as per each contract. The Company did not recognize revenue from these contracts during the three and six month periods ended March 31, 2017. The Company recognized revenue from these contracts of $278,698 and $783,047 for the three and six month periods ended March 31, 2016, respectively. The Company recognizes the revenue under its memorandum of understanding ("MOU") with LD Commodities Cotton LLC ("Dreyfus") when the product has been shipped, as there is no right of return under this arrangement and there is a commitment from their customer to purchase the marked cotton. The Company has evaluated the other indicators of gross and net revenue recognition, including whether or not the Company is the primary obligor and if it has general inventory risk. The Company does not have any general inventory risk and is not the primary obligor as it relates to the marketing portion of the cotton tagging fee. With respect to the Company’s mutual license agreement with Himatsingka America Inc. (formerly known as Divatex Home Fashion, Inc.) (“Himatsingka”), the Company has evaluated all of the key gross and net revenue recognition indicators and has concluded that the circumstances as they relate to Himatsingka’s portion of the tagging fee are more consistent with those key indicators that support net revenue reporting. In addition, the nature of some of the Company’s cotton contracts includes extended payment terms that will result in a longer collection period and slower cash inflows. Under the Company’s MOU with Dreyfus, as of March 31, 2017 and September 30, 2016 there was $4,235,598 and $4,621,345 included in short term accounts receivable, respectively. As of March 31, 2017 and September 30, 2016 there was $1,044,780 and $1,535,000 included in long-term accounts receivable, respectively. Also, as of March 31, 2017 and September 30, 2016 there was $1,748,254 and $2,305,000, respectively, included in deferred revenue for shipments during the six months ended March 31, 2017 and the fiscal year ended September 30, 2016. The cotton ginning season in the United States takes place between September and February each year, therefore, revenues from these customer contracts may be seasonal. Use of Estimates In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates. 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 carry forwards 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 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 and warrants. For the three and six month periods ended March 31, 2017 and 2016, 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 that were not included in the computation of diluted net loss per share because including those securities would have been anti-dilutive for the three and six month periods ended March 31, 2017 and 2016 are as follows: 2017 2016 Warrants 9,548,969 7,324,727 Stock options 5,199,477 3,886,406 14,748,446 11,211,133 Stock-Based Compensation The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, 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 employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are 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 718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from financing activities. The future realization of the reserved deferred tax assets related to these tax benefits associated with the exercise of stock options will result in a credit to additional paid in capital if the related tax deduction reduces taxes payable. The Company has elected the “with and without approach” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit did reduce taxes payable in the current year. Under this approach, the windfall tax benefit would be recognized in additional paid-in-capital only if an incremental tax benefit is realized after considering all other benefits presently available. The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50. 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 temporary cash investments with high credit quality institutions. At times, such investments may be 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, 2017 included an aggregate of 19% and 31% from two customers, respectively. The Company’s revenues earned from sale of products and services for the six month period ended March 31, 2017 included an aggregate of 19% and 41% from two customers, respectively. The Company’s revenues earned from sale of products and services for the three month period ended March 31, 2016 included 16% and 60% from two customers, respectively. The Company’s revenues earned from sale of products and services for the six month period ended March 31, 2016 included 12% and 49%, from two customers, respectively. One customer accounted for 85% and 78% of the Company’s total accounts receivable at March 31, 2017 and September 30, 2016, respectively. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). The amendments in this update are to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The purpose of the amendment is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. For public entities, the amendments in ASU 2017-04 are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently assessing the impact of ASU 2017-04 on its condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, "Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The objective of this update is to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). This update requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. ASU 2015-17 is effective for annual and interim reporting periods beginning after December 15, 2016. This update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early application is permitted as of the beginning of the interim or annual reporting period. The Company expects the impact of the adoption of this pronouncement on its condensed consolidated balance sheet to be a reclassification only, and does not expect the pronouncement to have a significant impact. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, first-out ("LIFO") method by prescribing that inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. The Company does not expect the adoption of ASU 2015-11 to have a material effect on its condensed consolidated financial statements. In August 2014, FASB In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which was subsequently modified in August 2015 by ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date. This guidance will be effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2017 The core principle of ASU No. 2014-09 is that companies should recognize revenue when the transfer of promised goods or services to customers occurs in an amount that reflects what the company expects to receive. It requires additional disclosures to describe the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers. In 2016, the FASB issued additional ASUs that clarify the implementation guidance on principal versus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), and on narrow-scope improvements and practical expedients (ASU 2016-12) as well as on the revenue recognition criteria and other technical corrections (ASU 2016-20). The Company is in the process of evaluating the provisions of these ASU’s and assessing the potential effect on the Company’s condensed consolidated financial position or results of operations. However, based upon the current contracts in place, we expect to identify similar performance obligations under these ASUs as compared with the deliverables and separate units of accounting previously identified. As a result, we expect the timing of our revenue to be the same assuming that there are no significant changes to our current contracts and arrangements.

LIQUIDITY AND MANAGEMENT'S PLAN

LIQUIDITY AND MANAGEMENT'S PLAN	6 Months Ended
	Mar. 31, 2017
Liquidity And Management Plan [Abstract]
LIQUIDITY AND MANAGEMENT'S PLAN	NOTE B — LIQUIDITY AND MANAGEMENT’S PLAN The Company has recurring net losses, which have resulted in an accumulated deficit of $231,207,629 as of March 31, 2017. The Company incurred a net loss of $7,390,240 and generated negative operating cash flow of $4,699,015 for the six month period ended March 31, 2017. The Company also had working capital of $6,527,906 and cash and cash equivalents of $4,020,412 as of March 31, 2017. The Company’s current capital resources include cash and cash equivalents, accounts receivable, and inventories. Historically, the Company has financed its operations principally from the sale of equity securities. As discussed in Note E, on November 7, 2016, the Company closed a private placement of common stock and warrants to purchase common stock, for aggregate gross proceeds of $5 million, before deducting placement agent fees and offering expenses. Total net proceeds were approximately $4.3 million. The Company expects to finance operations and capital expenditures primarily through cash received from the November 2016 private placement, as well as collection of its current accounts receivables. The Company estimates that it will have sufficient cash and cash equivalents to fund operations for the next twelve months from the balance sheet date. The Company may require additional funds to expand the marketing and complete the continued development of its products, product manufacturing, and to fund expected additional losses from operations, until revenues are sufficient to cover the Company’s operating expenses. If revenues are not sufficient to cover the Company's operating expenses, and if the Company is not successful in obtaining necessary additional financing, it will most likely be forced to reduce operations.

INVENTORIES

INVENTORIES	6 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
INVENTORIES	NOTE C — INVENTORIES Inventories consist of the following: March 31, September 30, (unaudited) Raw materials $ 160,754 $ 100,420 Finished goods 192,828 197,339 Total $ 353,582 $ 297,759

ACCOUNTS PAYABLE AND ACCRUED LI

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES	6 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES	NOTE D — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities are as follows: March 31, September 30, (unaudited) Accounts payable $ 1,158,216 $ 1,530,258 Accrued salaries payable 624,902 678,982 Other accrued expenses 113,036 38,101 Total $ 1,896,154 $ 2,247,341

CAPITAL STOCK

CAPITAL STOCK	6 Months Ended
	Mar. 31, 2017
Stockholders' Equity Note [Abstract]
CAPITAL STOCK	NOTE E — CAPITAL STOCK On November 2, 2016, the Company entered into a securities purchase agreement with an institutional investor providing for the purchase of $5 million of common stock and warrants at a combined price of $2.20 per share of common stock and warrant (the “Private Placement”). In the Private Placement, the Company sold 2,272,727 shares of its common stock and warrants to purchase 2,272,727 shares of its common stock. The warrants have the same terms as the Company's existing publicly traded warrants (APDNW) with an exercise price of $3.50 per share and an expiration date of November 20, 2019. The offering closed on November 7, 2016. The Company agreed to file a registration statement providing for the resale of these securities on Form S-3 by December 7, 2016. On December 6, 2016, the Company filed the Form S-3, which was declared effective by the SEC on December 13, 2016. Upon effectiveness of the registration statement, the common stock and warrants issued in the Private Placement became freely tradeable on The NASDAQ Capital Market under the symbols "APDN" and "APDNW", respectively. The aggregate gross proceeds to the Company from the Private Placement were $5 million before deducting the placement agents' fee and other offering expenses. As a result of the placement agents’ fee and other offering expenses attributable to the Private Placement, the net proceeds were $4,319,861. In connection with the closing of this Private Placement, as partial compensation, on November 7, 2016, the Company granted warrants to purchase an aggregate of 68,182 shares of its common stock to the Company's placement agents, Maxim Group LLC and Imperial Capital LLC (the “Placement Agent Warrants”) at an exercise price of $2.53 (115% of the public offering price), subject to adjustment as set forth therein (including for stock dividends and splits and certain other distributions and “Fundamental Transactions,” as defined therein). The Placement Agent Warrants will be exercisable beginning six months following the closing date of the Private Placement and terminate at 5:00 P.M. (Eastern Standard Time) on November 7, 2021. In addition, the Placement Agent Warrants provide for cashless exercise, which the Placement Agents may elect if there is no effective registration statement registering the resale of the shares issuable upon exercise of the Placement Agent Warrants. The number of shares of common stock that may be acquired by the Placement Agents upon any exercise of the Placement Agent Warrants (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise, the total number of shares of common stock then beneficially owned by the Placement Agent and its Affiliates (as defined therein) and any other Persons whose beneficial ownership of common stock would be aggregated with the Placement Agent pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 9.99% of the total number of issued and outstanding shares of common stock.

STOCK OPTIONS AND WARRANTS

STOCK OPTIONS AND WARRANTS	6 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]
STOCK OPTIONS AND WARRANTS	NOTE F — STOCK OPTIONS AND WARRANTS Warrants During the six month period ended March 31, 2017, the Company issued warrants to purchase 2,272,727 shares of its common stock as part of the Private Placement (See Note E). In addition, warrants to purchase an aggregate of 68,182 shares of common stock were issued to the Company's placement agents, Maxim Group LLC and Imperial Capital LLC (See Note E). The following table summarizes the changes in warrants outstanding and the related prices for the shares of common stock issued to non-employees of the Company. These warrants were granted in lieu of cash for services performed or financing expenses in connection with the sale of common stock. Transactions involving warrants are summarized as follows: Number of Weighted Balance at October 1, 2016 7,208,060 $ 3.64 Granted 2,340,909 3.47 Exercised - - Cancelled or expired - - Balance at March 31, 2017 9,548,969 $ 3.60 Stock Options In 2005, the Board of Directors and the holders of a majority of the outstanding shares of common stock approved the 2005 Incentive Stock Plan (the “Incentive Plan”). The number of shares of common stock that can be issued as stock awards and stock options thereunder is an aggregate of 8,833,333 shares and the number of shares of common stock that can be covered by awards made to any participant in any calendar year is 833,334 shares. The Incentive Plan’s expiration date is January 25, 2025. The Incentive Plan is designed to retain directors, executives, and selected employees and consultants by rewarding them for making contributions to the Company's success with an award of options. As of March 31, 2017, a total of 275,752 shares have been issued and options to purchase 5,722,045 shares have been granted under the Incentive Plan. Transactions involving stock options issued to employees and consultants are summarized as follows: Number of Weighted Aggregate Weighted Average Contractual Life (Years) Outstanding at October 1, 2016 4,403,234 $ 4.08 Granted 914,000 2.23 Exercised - - Cancelled or expired (117,757 ) (4.36 ) Outstanding at March 31, 2017 5,199,477 $ 3.76 Vested at March 31, 2017 3,809,116 $ 3.93 $ - 4.49 Non-vested at March 31, 2017 1,390,361 $ - 7.76 During the six month period ended March 31, 2017, the Company issued an aggregate of 914,000 options to employees, non-employee board of director members (including award modifications of 74,181 options), a consultant and members of the strategic advisory board. Included in these grants were 280,000 options granted to executives during the six month period ended March 31, 2017 and 5,000 performance based options granted to a consultant. These performance based options vest when a certain performance condition is met by the consultant. During the three month period ended March 31, 2017, the Company issued an aggregate of 2,500 options to a member of the strategic advisory board. The Company uses the Black Scholes Option Pricing Model to determine the fair value of options issued to employees and consultants. The following significant assumptions in the Black Scholes Option Pricing Model were utilized to estimate the fair value of share based payment awards during the three and six month periods ended March 31, 2017 and 2016: Three Six Stock price $ 1.68 $ 2.07 Exercise price $ 2.87 $ 2.25 Expected term, years 9.08 5.24 Dividend yield - % - % Volatility 133 % 112 % Risk free rate 2.3 % 2.0 % Three Six Stock price $ 2.78 $ 3.03 Exercise price $ 2.78 $ 3.03 Expected term, years 10.00 6.17 Dividend yield - % - % Volatility 142 % 130 % Risk free rate 1.74 % 1.79 % The Company recorded $537,904 and $489,349 as stock compensation expense for the three month periods ended March 31, 2017 and 2016, respectively. The Company recorded $1,995,924 and $886,338 as stock compensation expense for the six month periods ended March 31, 2017 and 2016, respectively. Included in this amount is $74,537 for the six month period ended March 31, 2017 for stock option modifications to extend the term of options for certain nonemployee board of director members. As of March 31, 2017, unrecorded compensation cost related to non-vested awards was $2,971,071, which is expected to be recognized over a weighted average period of approximately 3.17 years. The weighted average grant date fair value per share for options granted during the three and six month periods ended March 31, 2017 was $1.89 and $1.58, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE G — 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, 2016, with the option to extend the lease for up to 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. Total rent expense for the three and six month periods ended March 31, 2017 was $142,768 and $283,165, respectively. Total rent expense for the three and six month periods ended March 31, 2016 was $135,393 and $280,109, respectively. Employment Agreement The Company has an employment agreement with Dr. James Hayward, its Chief Executive Officer. On July 28, 2016, a new employment agreement was entered into with the Chief Executive Officer effective July 1, 2016. The initial term is from July 1, 2016 through June 30, 2017, with automatic one-year renewal periods. The terms of the agreement are substantially the same as his original employment agreement, except the cash incentive bonus was modified. Under the new agreement, Dr. Hayward will be eligible for a special cash incentive bonus of up to $800,000, $300,000 of which will be 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. Dr Hayward's annual salary is $400,000. Effective May 7, 2016, the Chief Executive Officer's annual salary was voluntarily reduced by $100,000. Accordingly, his current annual base salary as of March 31, 2017 is $300,000. 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.

GEOGRAPHIC AREA INFORMATION

GEOGRAPHIC AREA INFORMATION	6 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
GEOGRAPHIC AREA INFORMATION	NOTE H– GEOGRAPHIC AREA INFORMATION Net revenues by geographic location of customers are as follows: Three Month Period Ended March 31, 2017 2016 United States $ 555,043 $ 395,491 Europe 338,005 147,811 Asia and other 12,325 30,020 Total $ 905,373 $ 573,322 Six Month Period Ended March 31, 2017 2016 United States $ 1,143,942 $ 1,446,219 Europe 632,339 388,003 Asia and other 32,100 63,214 Total $ 1,808,381 $ 1,897,436

SUMMARY OF ACCOUNTING POLICIES

SUMMARY OF ACCOUNTING POLICIES (Policies)	6 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Business and Basis of Presentation	Business and Basis of Presentation The Company is principally devoted to developing and marketing SigNature DNA technology solutions in the United States, Europe and Asia. To date, the Company has had a limited operating history with its current business model, and as a result, its operations have produced limited recurring revenues from its services and products; it has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment and development of a biotechnology company. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, APDN (B.V.I.) Inc. and Applied DNA Sciences Europe Limited, which currently have no operations or activity. Significant inter-company transactions and balances have been eliminated in consolidation. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year's presentation.
Inventories	Inventories Inventories, which consist primarily of raw materials, and finished goods, is stated at the lower of cost or market, with cost determined by using the first-in, first-out (FIFO) method.
Revenue Recognition	Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”). ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and/or service has been performed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered or services provided and the collectability of those amounts. Provisions for allowances and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered, service has not been provided, or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered, the service has been provided, or no refund will be required. At March 31, 2017 and September 30, 2016, the Company recorded deferred revenue of $1,888,774 and $2,737,588, respectively. Revenue arrangements with multiple components are divided into separate units of accounting if certain criteria are met, including whether the delivered component has stand-alone value to the customer. Consideration received is allocated among the separate units of accounting based on their respective selling prices. The selling price for each unit is based on vendor-specific objective evidence, or VSOE, if available, third party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third party evidence is available. The applicable revenue recognition criteria are then applied to each of the units. Revenue for government contract awards, which supports the Company’s development efforts on specific projects, is recognized as milestones are achieved as per each contract. The Company did not recognize revenue from these contracts during the three and six month periods ended March 31, 2017. The Company recognized revenue from these contracts of $278,698 and $783,047 for the three and six month periods ended March 31, 2016, respectively. The Company recognizes the revenue under its memorandum of understanding ("MOU") with LD Commodities Cotton LLC ("Dreyfus") when the product has been shipped, as there is no right of return under this arrangement and there is a commitment from their customer to purchase the marked cotton. The Company has evaluated the other indicators of gross and net revenue recognition, including whether or not the Company is the primary obligor and if it has general inventory risk. The Company does not have any general inventory risk and is not the primary obligor as it relates to the marketing portion of the cotton tagging fee. With respect to the Company’s mutual license agreement with Himatsingka America Inc. (formerly known as Divatex Home Fashion, Inc.) (“Himatsingka”), the Company has evaluated all of the key gross and net revenue recognition indicators and has concluded that the circumstances as they relate to Himatsingka’s portion of the tagging fee are more consistent with those key indicators that support net revenue reporting. In addition, the nature of some of the Company’s cotton contracts includes extended payment terms that will result in a longer collection period and slower cash inflows. Under the Company’s MOU with Dreyfus, as of March 31, 2017 and September 30, 2016 there was $4,235,598 and $4,621,345 included in short term accounts receivable, respectively. As of March 31, 2017 and September 30, 2016 there was $1,044,780 and $1,535,000 included in long-term accounts receivable, respectively. Also, as of March 31, 2017 and September 30, 2016 there was $1,748,254 and $2,305,000, respectively, included in deferred revenue for shipments during the six months ended March 31, 2017 and the fiscal year ended September 30, 2016. The cotton ginning season in the United States takes place between September and February each year, therefore, revenues from these customer contracts may be seasonal.
Use of Estimates	Use of Estimates In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates.
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 carry forwards 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 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 and warrants. For the three and six month periods ended March 31, 2017 and 2016, 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 that were not included in the computation of diluted net loss per share because including those securities would have been anti-dilutive for the three and six month periods ended March 31, 2017 and 2016 are as follows: 2017 2016 Warrants 9,548,969 7,324,727 Stock options 5,199,477 3,886,406 14,748,446 11,211,133
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, 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 employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are 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 718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from financing activities. The future realization of the reserved deferred tax assets related to these tax benefits associated with the exercise of stock options will result in a credit to additional paid in capital if the related tax deduction reduces taxes payable. The Company has elected the “with and without approach” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit did reduce taxes payable in the current year. Under this approach, the windfall tax benefit would be recognized in additional paid-in-capital only if an incremental tax benefit is realized after considering all other benefits presently available. The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50.
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 temporary cash investments with high credit quality institutions. At times, such investments may be 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, 2017 included an aggregate of 19% and 31% from two customers, respectively. The Company’s revenues earned from sale of products and services for the six month period ended March 31, 2017 included an aggregate of 19% and 41% from two customers, respectively. The Company’s revenues earned from sale of products and services for the three month period ended March 31, 2016 included 16% and 60% from two customers, respectively. The Company’s revenues earned from sale of products and services for the six month period ended March 31, 2016 included 12% and 49%, from two customers, respectively. One customer accounted for 85% and 78% of the Company’s total accounts receivable at March 31, 2017 and September 30, 2016, respectively.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). The amendments in this update are to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The purpose of the amendment is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. For public entities, the amendments in ASU 2017-04 are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently assessing the impact of ASU 2017-04 on its condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, "Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The objective of this update is to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). This update requires an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. ASU 2015-17 is effective for annual and interim reporting periods beginning after December 15, 2016. This update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early application is permitted as of the beginning of the interim or annual reporting period. The Company expects the impact of the adoption of this pronouncement on its condensed consolidated balance sheet to be a reclassification only, and does not expect the pronouncement to have a significant impact. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, first-out ("LIFO") method by prescribing that inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. The Company does not expect the adoption of ASU 2015-11 to have a material effect on its condensed consolidated financial statements. In August 2014, FASB In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which was subsequently modified in August 2015 by ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date. This guidance will be effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2017 The core principle of ASU No. 2014-09 is that companies should recognize revenue when the transfer of promised goods or services to customers occurs in an amount that reflects what the company expects to receive. It requires additional disclosures to describe the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers. In 2016, the FASB issued additional ASUs that clarify the implementation guidance on principal versus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), and on narrow-scope improvements and practical expedients (ASU 2016-12) as well as on the revenue recognition criteria and other technical corrections (ASU 2016-20). The Company is in the process of evaluating the provisions of these ASU’s and assessing the potential effect on the Company’s condensed consolidated financial position or results of operations. However, based upon the current contracts in place, we expect to identify similar performance obligations under these ASUs as compared with the deliverables and separate units of accounting previously identified. As a result, we expect the timing of our revenue to be the same assuming that there are no significant changes to our current contracts and arrangements.

SUMMARY OF ACCOUNTING POLICIE15

SUMMARY OF ACCOUNTING POLICIES (Tables)	6 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Schedule of anti-dilutive securities excluded from computation of earning per share	2017 2016 Warrants 9,548,969 7,324,727 Stock options 5,199,477 3,886,406 14,748,446 11,211,133

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Schedule of inventories	March 31, September 30, (unaudited) Raw materials $ 160,754 $ 100,420 Finished goods 192,828 197,339 Total $ 353,582 $ 297,759

ACCOUNTS PAYABLE AND ACCRUED 17

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)	6 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued liabilities	March 31, September 30, (unaudited) Accounts payable $ 1,158,216 $ 1,530,258 Accrued salaries payable 624,902 678,982 Other accrued expenses 113,036 38,101 Total $ 1,896,154 $ 2,247,341

STOCK OPTIONS AND WARRANTS (Tab

STOCK OPTIONS AND WARRANTS (Tables)	6 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]
Schedule of transactions involving warrants	Number of Weighted Balance at October 1, 2016 7,208,060 $ 3.64 Granted 2,340,909 3.47 Exercised - - Cancelled or expired - - Balance at March 31, 2017 9,548,969 $ 3.60
Schedule of summary of transactions involving stock options issued to employees and consultants	Number of Weighted Aggregate Weighted Average Contractual Life (Years) Outstanding at October 1, 2016 4,403,234 $ 4.08 Granted 914,000 2.23 Exercised - - Cancelled or expired (117,757 ) (4.36 ) Outstanding at March 31, 2017 5,199,477 $ 3.76 Vested at March 31, 2017 3,809,116 $ 3.93 $ - 4.49 Non-vested at March 31, 2017 1,390,361 $ - 7.76
Schedule of fair value of options granted	Three Six Stock price $ 1.68 $ 2.07 Exercise price $ 2.87 $ 2.25 Expected term, years 9.08 5.24 Dividend yield - % - % Volatility 133 % 112 % Risk free rate 2.3 % 2.0 % Three Six Stock price $ 2.78 $ 3.03 Exercise price $ 2.78 $ 3.03 Expected term, years 10.00 6.17 Dividend yield - % - % Volatility 142 % 130 % Risk free rate 1.74 % 1.79 %

GEOGRAPHIC AREA INFORMATION (Ta

GEOGRAPHIC AREA INFORMATION (Tables)	6 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Schedule of net sales by geographic location of customers	Three Month Period Ended March 31, 2017 2016 United States $ 555,043 $ 395,491 Europe 338,005 147,811 Asia and other 12,325 30,020 Total $ 905,373 $ 573,322 Six Month Period Ended March 31, 2017 2016 United States $ 1,143,942 $ 1,446,219 Europe 632,339 388,003 Asia and other 32,100 63,214 Total $ 1,808,381 $ 1,897,436

SUMMARY OF ACCOUNTING POLICIE20

SUMMARY OF ACCOUNTING POLICIES - Summary of potential stock issuances under various options, and warrants (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from diluted net loss per share	14,748,446	11,211,133
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from diluted net loss per share	9,548,969	7,324,727
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from diluted net loss per share	5,199,477	3,886,406

SUMMARY OF ACCOUNTING POLICIE21

SUMMARY OF ACCOUNTING POLICIES (Detail Textuals) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2017	Sep. 30, 2016
Accounting Policies [Abstract]
Deferred revenue	$ 1,888,774	$ 1,888,774	$ 2,737,588
Revenue for government contract awards	278,698	783,047
Short term accounts receivable	4,235,598	4,235,598	4,621,345
Long-term accounts receivable revenue recognized	1,044,780	1,044,780	1,535,000
Deferral revenue for shipments	$ 1,748,254	$ 1,748,254	$ 2,305,000

SUMMARY OF ACCOUNTING POLICIE22

SUMMARY OF ACCOUNTING POLICIES (Detail Textuals 1) - Customer Concentration Risk - Customer	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Total Revenue
Concentration Risk [Line Items]
Number of customers	2	2	2	2
Total Revenue | First customer
Concentration Risk [Line Items]
Percentage of total revenue and accounts receivable	19.00%	16.00%
Total Revenue | Second customer
Concentration Risk [Line Items]
Percentage of total revenue and accounts receivable	31.00%	60.00%
Total Revenue | Third customer
Concentration Risk [Line Items]
Percentage of total revenue and accounts receivable			19.00%	12.00%
Total Revenue | Fourth customer
Concentration Risk [Line Items]
Percentage of total revenue and accounts receivable			41.00%	49.00%
Accounts Receivable
Concentration Risk [Line Items]
Number of customers			1		1
Accounts Receivable | First customer
Concentration Risk [Line Items]
Percentage of total revenue and accounts receivable			85.00%		78.00%

LIQUIDITY AND MANAGEMENT'S PL23

LIQUIDITY AND MANAGEMENT'S PLAN (Detail Textuals) - USD ($)	Nov. 07, 2016	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016	Sep. 30, 2015
Liquidity And Management Plan [Abstract]
Accumulated deficit		$ (231,207,629)		$ (231,207,629)		$ (223,817,388)
Net loss		(3,428,856)	$ (3,467,623)	(7,390,240)	$ (6,393,893)
Negative operating cash flow				(4,699,015)	(5,223,699)
Working capital		6,527,906		6,527,906
Cash and cash equivalents		$ 4,020,412	$ 9,785,827	$ 4,020,412	$ 9,785,827	$ 4,479,274	$ 7,312,184
Gross proceeds from common stock and warrants upon closure of private placement	$ 5,000,000
Net proceeds after deducting placement agent fees and offering expenses	$ 4,319,861

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 160,754	$ 100,420
Finished goods	192,828	197,339
Total	$ 353,582	$ 297,759

ACCOUNTS PAYABLE AND ACCRUED 25

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Summary of accounts payable and accrued liabilities (Details) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Payables and Accruals [Abstract]
Accounts payable	$ 1,158,216	$ 1,530,258
Accrued salaries payable	624,902	678,982
Other accrued expenses	113,036	38,101
Total	$ 1,896,154	$ 2,247,341

CAPITAL STOCK (Detail Textuals)

CAPITAL STOCK (Detail Textuals) - USD ($)	Nov. 07, 2016	Nov. 02, 2016	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate gross proceeds from the Private Placement	$ 5,000,000
Net proceeds after deducting placement agent fees and offering expenses	$ 4,319,861
Placement Agent
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Threshold percent of total number issued and outstanding shares of common stock	9.99%
Securities Purchase Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of common stock and warrants purchased		$ 5,000,000
Share price (in dollars per share)		$ 2.20
Private placement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued		2,272,727
Number of common stock called by warrants	68,182	2,272,727	2,272,727
Exercise price of warrants (in dollars per share)	$ 2.53	$ 3.50
Exercise price percentage of public offering price	115.00%

STOCK OPTIONS AND WARRANTS - Tr

STOCK OPTIONS AND WARRANTS - Transactions involving warrants (Details)	6 Months Ended
	Mar. 31, 2017$ / sharesshares
Number of Shares
Balance at October 1, 2016 | shares	7,208,060
Granted | shares	2,340,909
Exercised | shares
Cancelled or expired | shares
Balance at March 31, 2017 | shares	9,548,969
Weighted Average Exercise Price Per Share
Balance at October 1, 2016 | $ / shares	$ 3.64
Granted | $ / shares	3.47
Exercised | $ / shares
Cancelled or expired | $ / shares
Balance at March 31, 2016 | $ / shares	$ 3.60

STOCK OPTIONS AND WARRANTS - 28

STOCK OPTIONS AND WARRANTS - Transactions involving stock options issued to employees and consultants (Details 1) - Stock Options - 2005 Incentive Stock Plan (the "Incentive Plan") - USD ($)	6 Months Ended
	Mar. 31, 2017
Number of Shares
Outstanding at October 1, 2016	4,403,234
Granted	914,000
Exercised
Cancelled or expired	(117,757)
Outstanding at March 31, 2017	5,199,477
Vested at March 31, 2017	3,809,116
Non-vested at March 31, 2017	1,390,361
Weighted Average Exercise Price Per Share
Outstanding at October 1, 2016	$ 4.08
Granted	2.23
Exercised
Cancelled or expired	(4.36)
Outstanding at March 31, 2017	3.76
Vested at March 31, 2017	$ 3.93
Aggregate Intrinsic Value, Vested at March 31, 2017
Aggregate Intrinsic Value, Non-vested at March 31, 2017
Weighted Average Contractual Life (years) vested at March 31, 2017	4 years 5 months 27 days
Weighted Average Contractual Life (years), Non-vested at March 31, 2017	7 years 9 months 4 days

STOCK OPTIONS AND WARRANTS - Fa

STOCK OPTIONS AND WARRANTS - Fair value of options granted using Black Scholes Option Pricing Model with weighted average assumptions (Details 2) - $ / shares	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]
Stock price	$ 1.68	$ 2.78	$ 2.07	$ 3.03
Exercise price	$ 2.87	$ 2.78	$ 2.25	$ 3.03
Expected term, years	9 years 29 days	10 years	5 years 2 months 27 days	6 years 2 months 1 day
Dividend yield
Volatility	133.00%	142.00%	112.00%	130.00%
Risk free rate	2.30%	1.74%	2.00%	1.79%

STOCK OPTIONS AND WARRANTS (Det

STOCK OPTIONS AND WARRANTS (Detail Textuals) - shares	6 Months Ended
	Mar. 31, 2017	Nov. 07, 2016	Nov. 02, 2016
Private placement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock called by warrants	2,272,727	68,182	2,272,727
Aggregate number of shares of common stock that can be issued as stock awards and stock option	68,182
Stock Options | 2005 Incentive Stock Plan (the "Incentive Plan")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares of common stock that can be issued as stock awards and stock option	8,833,333
Number of common stock shares that can be covered by awards made to any participant per period	833,334
Number of shares issued	275,752
Options to purchase shares under the 2005 Incentive Stock Plan	5,722,045

STOCK OPTIONS AND WARRANTS (D31

STOCK OPTIONS AND WARRANTS (Detail Textuals 1)	3 Months Ended		6 Months Ended
	Mar. 31, 2017USD ($)$ / sharesshares	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)Stock_option$ / sharesshares	Mar. 31, 2016USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense | $	$ 537,904	$ 489,349	$ 1,995,924	$ 886,338
Stock option modifications expense | $			74,537
Unrecorded compensation cost related to non-vested awards | $	$ 2,971,071		$ 2,971,071
Weighted average period for non-vested awards			3 years 2 months 1 day
Weighted average grant date fair value for options granted | $ / shares	$ 1.89		$ 1.58
Stock Options | Employees, non-employee board of director members and members of the strategic advisory board
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted | shares	2,500		914,000
Number of stock option modified | Stock_option			74,181
Stock Options | Executives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted | shares			280,000
Performance based options to consultant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted | shares			5,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Detail Textuals)	1 Months Ended		3 Months Ended		6 Months Ended
	Jul. 28, 2016USD ($)	Jun. 15, 2013USD ($)ft²	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	May 07, 2016USD ($)
Commitments And Contingencies [Line Items]
Area of property under operating lease | ft²		30,000
Extended operating lease for two additional period		3 years
Base rent during initial lease term per annum		$ 458,098
Total rent expense			$ 142,768	$ 135,393	$ 283,165	$ 280,109
Employment Agreement | Dr. James Hayward - Chief Executive Officer
Commitments And Contingencies [Line Items]
Annual base salary					$ 300,000
Reduction in annual salary							$ 100,000
New Employment Agreement | Dr. James Hayward - Chief Executive Officer
Commitments And Contingencies [Line Items]
Agreement renewal period	1 year
Special cash incentive bonus	$ 800,000
Special cash incentive bonus on completing threshold annual revenue	300,000
Threshold annual revenue	8,000,000
Special cash incentive bonus on completing threshold annual revenue in excess of first threshold revenue	100,000
Threshold annual revenue in excess of first threshold	2,000,000
Annual base salary	$ 400,000

GEOGRAPHIC AREA INFORMATION (De

GEOGRAPHIC AREA INFORMATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Net sales	$ 905,373	$ 573,322	$ 1,808,381	$ 1,897,436
United States
Segment Reporting Information [Line Items]
Net sales	555,043	395,491	1,143,942	1,446,219
Europe
Segment Reporting Information [Line Items]
Net sales	338,005	147,811	632,339	388,003
Asia and other
Segment Reporting Information [Line Items]
Net sales	$ 12,325	$ 30,020	$ 32,100	$ 63,214