Applied DNA Sciences, Inc. (NASDAQ:APDN) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement
On November 29, 2018, Applied DNA Sciences, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein, including the Company’s chairman, president and chief executive officer and one member of the management team (the “Purchasers”), to which the Company issued and sold to the Purchasers an aggregate of $550 thousand in principal amount of secured convertible notes (the “Notes”) bearing interest at a rate of 6% per annum (the “Private Placement”). The Notes are substantially similar to the Company’s convertible notes issued on August 31, 2018 (the “August 31 Notes”) except with respect to maturity date. The Notes are secured on a pari passu basis with the same Company assets as the August 31 Notes.
The Notes are convertible, in whole or in part, at any time, at the option of the Purchasers, into shares of the Company’s Common Stock, $0.001 par value per share (“Common Stock”), in an amount determined by dividing the principal amount of each Note, together with any and all accrued and unpaid interest, by the conversion price of $2.50. The Company has the right to require the Purchasers to convert all or any part of their Notes into shares of the Company’s Common Stock at a conversion price of $2.50 if the price of the Common Stock remains at a closing price of $3.50 or more for a period of twenty consecutive trading days.
Upon any Change in Control (as defined in the Notes), the Purchasers have the right to require the Company to redeem the Notes, in whole or in part, at a redemption price equal to such Notes’ outstanding principal balance plus accrued interest.
The Notes contain certain events of default that are customarily included in financing of this nature. If an event of default occurs, the Purchasers may require the Company to redeem the Notes, in whole or in part, at a redemption price equal to such notes’ outstanding principal balance plus accrued interest.
The Notes bear interest at the rate of 6% per annum, payable semi-annually in cash or in kind, at the Company’s option, and are due and payable in full on November 28, 2021. Until the principal and accrued but unpaid interest under the Notes is paid in full, or converted into shares of common stock to their terms, the Company’s obligations under the Notes are secured by a lien on substantially all assets of the Company (excluding certain bank accounts) and the assets of APDN (B.V.I.) Inc., the Company’s wholly-owned subsidiary (“APDN BVI”), in favor of Delaware Trust Company, as Collateral Agent for the Purchasers to security agreements dated as of October 19, 2018 (the “Security Agreements”).
The Company also entered into a registration rights agreement, dated as of the date of the Purchase Agreement (the “Registration Rights Agreement”), with the Purchasers, to which the Company has agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) to register under the Securities Act of 1933, as amended (the “Securities Act”) resales from time to time of the Common Stock issued or issuable upon conversion or redemption of the Notes. The Company is required to file a registration statement within 60 days of receiving a demand registration request from holders of a majority of the outstanding principal balance of the Notes, and to cause the registration statement to be declared effective within 45 days (or 90 days if the registration statement is reviewed by the SEC).
The Private Placement was completed in reliance upon the exemption from registration provided for by Section 4(a)(2) of the Securities Act and by Rule 506 of Regulation D promulgated under the Securities Act. Each of the Purchasers represented to the Company in the Purchase Agreement that it is an “accredited investor” as that term is defined in Rule 501 of Regulation D. This Current Report on Form 8-K shall not constitute an offer to sell, the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The respective descriptions of the Purchase Agreement, Note, Security Agreements and Registration Rights Agreement herein are brief summaries only.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02.
Item 9.01 Financial Statements and Exhibits
APPLIED DNA SCIENCES INC ExhibitEX-10.1 2 tv508537_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 FORM OF SECURED CONVERTIBLE NOTE NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…To view the full exhibit click here
About Applied DNA Sciences, Inc. (NASDAQ:APDN)
Applied DNA Sciences, Inc. is engaged in creating security solutions addressing the challenges of modern commerce. The Company is also engaged in the large-scale production of specific deoxyribonucleic acid (DNA) sequences using the polymerase chain reaction (PCR). Its principal technology platform includes SigNature DNA, SigNature T DNA, fiberTyping, DNAnet, digitalDNA, SigNify and Beacon. Its SigNify IF portable DNA reader provides definitive real-time authentication of SigNature DNA in the field-DNA becomes a solution for supply chain integrity. SigNature DNA is the Company’s platform ingredient, at the core of all its security solutions. It provides forensic power and protection for a range of applications. SigNature T DNA is a tagging and authentication system specifically designed for textiles and apparel. DNAnet is a DNA marker that can be used to definitively link evidence and offenders to specific crime scenes and help return stolen or lost property to its rightful owner.
