アメリカ合衆国

証券取引委員会

ワシントン D. C. 20549

フォーム 10-K

」と 1934 年の証券取引法第 13 条または第 15 条 （ d ） 項への年次報告書

会計年度終了について 2024 年 9 月 30 日

↓ ↓ 1934 年の証券取引法第 13 条または第 15 条 （ d ） への移行報告書

_____ から _____ への移行期間について

コミッションファイル番号 001-36745

アプライド DNA サイエンス株式会社.

（ 憲章に記載された登録者の正名 ）

同法第 12 条 （ b ） に基づいて登録された有価証券 ：

同法第 12 条 （ g ） に基づいて登録された有価証券 ： なし

登録者が証券法第 405 条で定義されている、よく知られた経験豊富な発行者であるかどうかをチェックマークで示します。

↓ ↓ はい 」と     いいえ

登録者が法律の第 13 条または第 15 条 （ d ） に基づいて報告書を提出する必要がない場合は、チェックマークで示します。

↓ ↓はい、そうです」と     いいえ

再選択マークは、登録者が、(1)過去12ヶ月以内(または登録者がそのような報告の提出を要求された短い期間内)に、1934年の証券取引法第13節または15(D)節に提出されたすべての報告書を提出したかどうか、および(2)過去90日以内にそのような提出要件に適合しているかどうかを示す。

」と     はい     ↓ ↓*番号

再選択マークは、登録者が過去12ヶ月以内に(または登録者がそのような文書の提出を要求されたより短い時間以内に)S−t規則405条(本章232.405節)に従って提出を要求した各対話データファイルを電子的に提出したかどうかを示す。

」と     はい     ↓ ↓*番号

登録者が大型加速申告会社，加速申告会社，非加速申告会社，小さな報告会社，あるいは新興成長型会社であることを再選択マークで示す。取引法第120条の2規則における“大型加速申告会社”、“加速申告会社”、“小さい報告会社”、“新興成長型会社”の定義を参照されたい。

新興成長会社の場合は、登録者が取引法第 13 条 （ a ） に基づいて提供される新しいまたは改訂された財務会計基準を遵守する延長移行期間を使用しないことを選択したかどうかをチェックマークで示します。 ↓ ↓

登録者が、 Sarbanes—Oxley 法 （ 15 U. S.C. ） のセクション 404 （ b ） に基づく財務報告に関する内部統制の有効性に関する経営陣の評価に関する報告書と証明書を提出したかどうかをチェックマークで示します。7262 （ b ） ） 監査報告書を作成または発行した登録会計事務所によって。 ↓ ↓

法第 12 条 （ b ） に基づいて有価証券を登録する場合、申請に含まれる登録者の財務諸表に、以前に発行された財務諸表に対する誤りの訂正が反映されているかどうかをチェックマークで示します。 ↓ ↓

これらの誤り訂正のいずれかが、 § 240.10D—1 （b） に従って、関連する回復期間中に登録者の執行役員によって受け取られたインセンティブベースの報酬の回復分析を必要とする再記述であるかどうかをチェックマークで示します。 ↓ ↓

登録者が空殻会社であるか否かをチェックマークで示す(同法第120条第2条で規定されている)↓ ↓“はい”“いいえ”」と番号：

登録者が最近完成した第2財期(2024年3月31日)の最終営業日にナスダック証券市場で報告された普通株の最終販売価格によると，登録者の非関連会社が保有する登録者有議決権と議決権なし普通株の総時価は約$である5.7百万ドルです。登録者によれば、各役員及び取締役、並びに各実体又は個人が保有する登録者普通株は、2024年3月31日現在、登録者が発行した普通株の10%以上を占める株式が除外されている。これらの者は、登録者の連属会社とみなされる可能性があるからである。他の目的に対して，このような関連地位の決定は必ずしも決定的な決定であるとは限らない.

2024年12月13日現在、登録者は未返済のものがあります52,294,359普通株は、一株当たり0.001ドルの価値があります。

参考文献で組み込まれた文書

この10-k表年次報告の第3部は、2025年年次総会に登録者が提出した最終委託書の一部を参照するか、2024年9月30日までの財政年度終了後120日以内に提出される本報告の修正案に含まれる。引用により年次報告書に含まれる10-kテーブルに明確な情報を除いて，依頼書は本プロトコルの一部として提出されるとはみなされない.

目次表

パート I

前向き情報

この10-k表年次報告書(第7項に限定されるものではないが、“経営陣の財務状況及び経営結果の検討及び分析”)には、1933年証券法(“証券法”)第27 A節及び1934年証券取引法(“取引法”)第21 E節の意味を満たす“前向き陳述”が含まれており、これらの条項によって創出された“安全港”の資格に適合することを目的としている。さらに、私たちは、米国証券取引委員会(“米国証券取引委員会”)に提出された他の文書で前向きに陳述することができ、私たちの経営陣および他の代表は、アナリスト、投資家、メディア代表、および他の人に口頭または書面で前向きに陳述する可能性がある。これらの陳述は未来の事件或いは私たちの未来の経営或いは財務表現と関係があり、既知と未知のリスク、不確定性及びその他の要素に関連し、私たちの実際の結果、表現或いは成果は展望性陳述と明示的或いは暗示的な任意の未来の結果、表現或いは成果とは大きく異なることを招く可能性がある。

前向きな陳述は、一般に、“できる”、“可能”、“仮定”、“予測”、“信じ”、“意図”、“将”、“予想”、“計画”、“予想”、“推定”、“潜在”、“立場”、“予測”、“戦略”、“指導”、“意図”などの用語の使用を含むが、これらに限定されない事実によって識別されることができる。“予算”、“求める”、“プロジェクト”または“継続”、または将来に対する信念、計画、期待、または意図に関するその否定または他の同様の用語。これらの言葉を含む声明をよく読むべきです

私たちは私たちの期待を伝えることが重要だと信じている。しかし、展望性陳述は私たちの現在の私たちの業務と業界に対する期待、仮説、推定と予測に基づいており、既知と未知のリスク、不確定性、およびその他の要素の影響を受ける。したがって、様々な要因およびリスクのため、我々の実際の結果およびあるイベントの発生時間は、このような前向き表現に明示または示唆される内容とは大きく異なる可能性があり、これらの要因およびリスクは、本報告に含まれる総合財務諸表およびその付記に記載されているもの、および米国証券取引委員会に時々提出される他の文書に記載されているものを含むが、本報告に含まれる総合財務諸表およびその付記に記載されているものを含むが、これらに限定されない。

他の事項を除いて、私たちの展望的な陳述は関連がある

私たちのどんな展望的な陳述も間違っていることが証明されるかもしれない。それらは私たちが作る可能性のある不正確な仮定の影響を受けるか、あるいは既知または未知のリスクと不確実性の影響を受けるかもしれない。実際の結果と結果は，我々の前向き陳述で明示的あるいは示唆された内容とは大きく異なる可能性がある.将来の結果に影響を与える可能性のある要素は

本年度報告書の10-k表に含まれるすべての前向き陳述およびリスク要因は、日付までに取得可能な情報に基づいて作成されるか、または参照統合された文書について、その日付までに取得可能な任意のそのような文書の元の日付に基づいて、法律がそうすることを要求されない限り、任意の前向き陳述またはリスク要因を更新する義務はない。もし私たちが1つまたは複数の前向き陳述を更新した場合、私たちは他の前向き陳述を更新するか、または未来の任意の時間にこれらの前向き陳述をさらに更新すると推定すべきではない。

展望的な陳述には、私たちの製品と私たちの未来の経済表現、予測、業務戦略、および成功のタイミングと可能性に関する計画と目標を含む将来の業務に対する私たちの計画と目標が含まれるかもしれない。本年度報告に含まれる前向き陳述に関する仮定は，将来の経済，競争や市場状況，将来の業務決定，我々の製品やサービスへの需要，我々の技術の開発や商業化に成功するのに要する時間や資金などの判断に関連しており，これらは困難または正確な予測が不可能であり，多くは我々がコントロールできるものではない.

本年度報告書10−k表に含まれる前向き陳述に基づく任意の仮定は、不正確であることが証明される可能性があり、したがって、このような前向き陳述に予期される任意の結果またはイベントが達成されることを保証することはできない。これらの前向き陳述に固有の重大な不確実性に基づいて、このような陳述を含むいかなるものも、私たちが目標または計画を達成する陳述または保証とみなされてはならず、私たちは、本明細書に含まれるいかなる前向き陳述にも依存しないことを警告する。

我々が現在米国で使用している商標には，デオキシリボ核酸，Signature分子タグ，Signaturet分子タグ，FiberTyping，Signify，Beacon，Scermt，LineaDNA，Linea新冠肺炎診断分析キット，SafeCircleの応用がある^ＴＭ私たちは、他の会社との関係を示唆するために、他の会社の商品名や商標を使用したり、展示したり、任意の他の会社の私たちへの支援や賛助を暗示するつもりはありません。本年度報告では、10-k表の形態で含まれるまたは引用されたすべての商標、サービスマーク、および商号は、それぞれの所有者の財産である。

項目 1 。商売をします。

概要

我々はバイオテクノロジー会社であり，デオキシリボ核酸(DNA)とリボ核酸(RNA)を開発·商業的に製造·検出する技術である。ポリメラーゼ連鎖反応(“ポリメラーゼ連鎖反応”)を用いてDNAおよびRNAを製造および検出するために、我々は現在、(I)核酸ベースの治療薬(生物製剤および薬物を含む)の合成DNAを製造するための酵素製剤の製造、およびメッセンジャーRNA(“メッセンジャーRNA”)治療薬を製造するための特許RNAポリメラーゼ(“RNAP”)の開発と販売(“治療DNA生産サービス”)、(Ii)分子診断および遺伝子試験サービスにおけるDNAおよびRNAの検出(“MDX試験サービス”)の3つの主要なビジネス市場を運営している。および(3)工業サプライチェーンとセキュリティサービス(“DNAタグとセキュリティ製品とサービス”)のためのDNAの製造と検出。

私たちの現在の成長戦略は主に私たちの資源を更なる開発、商業化と顧客が私たちの治療的DNA生産サービスを採用することに集中して、私たちの契約開発と製造業務(“CDMO”)を拡大し、核酸療法を生産するための合成DNAと関連酵素を生産することを含む。

私たちは引き続き私たちの業務戦略を更新し、各業務部門の資源使用状況を監視します。会社の経営陣は現在、会社の業務部門を戦略的に検討しており、これは、会社のDNAタグおよびセキュリティ製品およびサービスおよび/またはMDXテストサービスの閉鎖または剥離、およびリストラおよび潜在的な経営陣の変動を招く可能性がある。そのため，2024年12月17日，同社はそのDNAタグや安全製品やサービス業務部門を剥離する可能性を検討していると発表した。資産剥離が完了することは保証されない。さらに、任意の可能な閉鎖または剥離の最終条項および構造は、会社の取締役会によって決定または承認されていない。いかなる閉鎖または剥離の目的は、会社の支出の削減とコスト節約を実現することであるにもかかわらず、関連する再構成コストが存在する可能性がある。私たちは、既存の機会と未来の機会に対する私たちの信念に基づいて、私たちの業務戦略を修正し、改善していくと予想しています。

企業の歴史

私たちはデラウェア州の会社で、最初は1983年に設立され、フロリダ州の法律によって設立されました。1998年、ネバダ州に再登録され、2002年、私たちは現在の名前に変更し、DNA科学、会社を応用しました。2008年12月17日、私たちはネバダ州からデラウェア州に再登録しました。

私たちの会社はニューヨーク石渓大学に本部を置くロングアイランドハイテク孵化器で、私たちはそこにDNAの製造とDNAとRNAを検査する実験室を設立して、私たちの各種の業務部門を支持します。また，ニューヨーク州衛生部(“NYSDOH”)臨床実験室評価計画(“CLEP”)が許可した臨床実験室改善修正案(“CLIA”)認証の臨床実験室が設置されており，MDX試験サービスを提供している。わが社本社の郵送先はニューヨーク石渓健康科学大通り50号で、郵便番号：11790、私たちの電話番号は。

業界背景と市場

治療用DNA生産サービス

98%の持分を持つ子会社LineaRx，Inc.(“LRx”)により，LineaDNAとLineaIVTプラットフォームを開発し，合成DNAや関連酵素を生産し，核酸ベースの治療薬を生産するために商業化している。

LineaDNAプラットフォーム

我々のLineaDNAプラットフォームは，我々のコアエネルギー技術であり，高忠実DNA配列を迅速，効率的かつ大規模に製造することができ，様々な核酸ベースの療法に用いられている。LineaDNAプラットフォームは，過去40年間生物治療のために提供されてきたDNAのプラスミドベースDNA製造技術の代替案である酵素作用により“LineaDNA”と呼ばれる線形形態のDNAを産生する。

2024年第3四半期までに，臨床前から登録前段階まで4099種類の遺伝子，細胞，RNA療法が開発されており，これらの療法のほとんどが製造過程でDNAを使用している。(出典：ASGCT遺伝子、細胞およびRNA治療プロファイル：2024年第3四半期報告)LineaDNAプラットフォームは従来の核酸ベースの治療製造プラットフォームよりも多くの利点があると考えられているため，開発されている大量の治療は，核酸による治療製造において従来の製造方法に代わる巨大な市場機会を表していると信じており，この市場機会の利用に成功することは保証されていないが。

我々のLineaDNAプラットフォームは既存の細胞ベースプラスミドDNA製造プラットフォームと比較していくつかの重要な利点を持っていると信じている。プラスミドに基づくDNA製造は生きた細菌細胞でDNAを増幅する複雑で、高価で時間のかかる生物過程に基づいている。一旦増幅すると、DNAは多回精製によって生細胞と他の過程汚染物から分離しなければならず、それによって複雑性、コストと監督管理負担をさらに増加させる。プラスミドをベースとしたDNA製造とは異なり，LineaDNAプラットフォームは生細胞を必要とせず，ポリメラーゼ連鎖反応の酵素過程でDNAを増幅する。LineaDNAプラットフォームは非常に簡単で、複雑な精製工程を必要とすることなく、無細胞プロセスを利用して非常に大量のDNAを迅速に生産することができる。

LineaDNAプラットフォームの主な利点は

同社が行った臨床前研究によると、多くの核酸に基づく療法では、LineaDNAがプラスミドDNAを代替できることが明らかになった

また，以下の核酸による療法では，LineaDNAもプラスミドDNAを代替できると考えられる

LineA IVTプラットフォーム

開発中のメッセンジャーリボ核酸療法の数は急速に増加しており，これはメッセンジャーリボ核酸新冠肺炎ワクチンの成功によるものである。メッセンジャーリボ核酸療法は体外培養転写(“IVT”)は，出発材料としてDNAが必要である。2024年第3四半期までに450種類を超えるメッセンジャーリボ核酸療法が開発されており，その多く(67%)が臨床前段階にある(ソース：ASGCT遺伝子，細胞，RNA療法概況：2024年第3四半期報告)。同社は、メッセンジャーリボ核酸市場は初期段階にあり、DNAの重要な出発材料とRNAPの生産と供給を通じてメッセンジャーリボ核酸療法を生産することは、会社にとって大きな成長機会であると考えている。

2022年8月、同社はそのLineaDNAプラットフォームにより製造されたDNA IVTテンプレートを発売し、米国、ヨーロッパ、アジア太平洋地域の多くの治療開発者とCDMOが同社のIVTテンプレートを評価した。また，同社のIVTテンプレートは現在，2人の治療開発者と1人のCDMOによる後期評価を行っており，2025年に臨床用に計画されているメッセンジャーリボ核酸を生産するためのDNAテンプレートとして用いられている。しかし、関連契約が締結される保証はない。この需要、メッセンジャーリボ核酸治療市場の持続的な増加及びLineaDNAプラットフォームの独特な能力を満たすために、会社は2023年7月にSpindleを買収し、そのメッセンジャーリボ核酸関連の総アドレス可能市場(“”)を潜在的に拡大し、著者らのLineaDNA IVTテンプレートと結合して使用するRNAPの製造と販売を含む。

Spindleの買収を通じて、著者らは2023年7月に著者らのLineaIVTプラットフォームを発売し、このプラットフォームはSpindle独自の高性能RNAP(現在会社がLineaRNAPとして販売している)と著者らの酵素法で生産したLineaDNA IVTテンプレートを結合した。LineaIVTプラットフォームは私たちの顧客がより速く、より良いmRNAを作ることができると信じています。同社とその協力者が生成したデータによると、統合されたLineA IVTプラットフォームは、従来のmRNA生産ではなく、治療開発者とメーカーに以下の利点を提供していると考えられる

社内モデルによると，LineaDNA IVTテンプレートのみを販売するよりも，LineaIVTプラットフォームでLineaDNA IVTテンプレートやLineRNAPを販売する能力は，会社のメッセンジャーリボ核酸関連の約3−5倍に増加させる可能性があるとともに，メッセンジャーリボ核酸製造市場により競争力のある製品を提供する可能性がある。現在，LineRNAPはAlphazyme，LLC(“Alphazyme”)がISO 13485質量系により会社製であり，Alphazymeは米国に位置する第三者CDMOであり，同社は早期臨床使用に十分であると考えている。同社は最近AlphazymeとともにLineRNAPの製造プロセス開発を完了し，この酵素の生産規模を拡大し，単位コストを低減した。

製造規模が拡大する

同社はいくつかの品質レベルの線状DNAを提供する予定であり，クラスごとに異なる許可用途を有している。

(1)将来の融資の可用性に依存する。

我々は現在、良好な実験室規範(“GLP”)に基づいてLineaDNAを生産しており、現在ニューヨーク州石渓に位置する実験室空間内に用途に適した製造施設を構築しており、良好な製造規範(“GMP”)に従って臨床および商業メッセンジャーリボ核酸治療の重要な出発材料として適したLineaDNA IVTテンプレートを生産することができ、2025年1月に完成する予定である(“GMPサイト1”)。また、LineaDNA IVTテンプレートに追加容量を提供し、GMPによって製造された生物、医薬物質および/または医薬製品として使用するのに適したLineaDNA材料に容量を提供する予定であり、2026年上半期に使用される予定であり、これは将来の資金の獲得可能性(“GMPサイト2”)および顧客ニーズに依存する。GMPは全世界範囲内とFDAが薬品の品質を確保するために使用する品質標準である。薬物物質は医薬製品中の薬学的活性を有する成分である。

細分化市場業務戦略

我々の治療DNA生産サービスの業務戦略は、我々が計画している近未来GMPサイト1でGMPによるLineaDNA IVTテンプレートを提供し、短期的にmRNA療法の急速な増加を利用するとともに、LineaDNAのより多くの臨床および商業応用の基礎を築くことであり、将来的にはGMPサイト2で生物、医薬物質および/または医薬製品として適したLineaDNAを生産することを計画している。また、顧客がGMPサイト1の能力を超えていれば、計画中のGMPサイト2は追加のLineaDNA IVTテンプレートの製造にも利用できる。GMPサイト1は、生物、薬物物質および/または医薬製品の製造、またはその既存の足跡の施設アップグレードによって生物、医薬物質および/または医薬製品の製造に使用されるLineaDNAを製造することができると信じている。

我々の現在の計画は、(I)LineaIVTプラットフォームを介して、LineaDNA IVTテンプレートおよび/またはLineaRNAPの臨床および商業mRNAおよび/または自己増幅mRNA(“sa-RNA”)メーカーと商業規模の供給契約を締結し、重要な出発材料として、近いうちにGMPサイト1にIVTテンプレートのGMP製造能力を確立することを計画している。(Ii)その治療製造においてDNAを使用する臨床前治療開発者との供給および/または開発契約を保証するために、現在非IVT鋳型用途に使用されているGLP生産能力を利用して、(Iii)我々が計画しているGMPサイト2開発計画における将来のLineaDNA生産を、生物、医薬物質および/または医薬製品として使用するのに適し、および/またはGMPサイト1にアップグレードして、既存および新しいLineaDNAクライアントを大規模供給契約に変換して、LineaDNAを臨床および商業用途として供給するか、または生物、生物、ビジネス用途として供給するために、またはGMPサイト1にアップグレードすることを保証する。広範な核酸療法における医薬物質及び/又は医薬製品。また，会社はGMP 1および/またはGMP 2におけるDNA製造能力を利用して，新たに既存のLineaDNA IVTテンプレートクライアントとLineaIVTプラットフォームクライアントに変換し，会社のメッセンジャーリボ核酸関連を増加させる予定である。

GMPサイト1がメッセンジャーリボ核酸製造のためのDNAキー出発材料(DNA IVT鋳型)を製造するまでは、このビジネスから相当な収入を実現することはできないであろう。GMPサイト1を作成する余剰資本支出(“資本支出”)コストは30ドル未満になると予想される。もし私たちの施設を拡大して、GMP生産LineaDNAを生物、薬物物質および/または医薬製品として使用するか、または計画に従ってGMPサイト2に組み込むと、追加の資本支出は約1，000ドルに達する可能性があり、これは追加の資金が必要になるだろう。我々は、生物、薬物物質および/または医薬製品の製造または組み込まれたLineaDNAの製造コストが100ドル未満であるために、GMPサイト1にアップグレードする予定である。我々は現在，我々の既存の実験室空間内にGMPサイト1を建設している.GMPサイト2は余分な空間を得る必要があると予想される.

MDXテストサービス

著者らの臨床実験室子会社がDNA臨床実験室有限責任会社(“ADCL”)を応用することにより、著者らはポリメラーゼ連鎖反応によるDNAとRNA測定に関する専門知識を利用して、臨床分子診断と遺伝(総称して“MDX”)測定サービスを提供と開発した。ADCLはNysdoh CLIA認証の実験室であり、現在ウイルス学と遺伝学(分子)研究を許可している。MDX検出サービスを提供する際には，ADCLは自己または第三者分子診断テストを用いている。

我々は我々の薬物ゲノミクス試験サービス(“PGx試験サービス”)を内部で検証することに成功した。我々のPGxテストサービスは、120個の目標のPGxグループテストを用いて特定の患者の独特な遺伝子を評価し、患者のヘルスケア提供者に個性的な薬物治療決定を指導するのを助ける。著者らのPGxテストサービスは33個を超える遺伝子のDNA標的を問い合わせ、そしてある心臓、心理健康、腫瘍学と止痛薬物治療に関連する遺伝子分類情報を提供することを目的としている。

2024年6月12日、我々はNYDOHによる我々のPGxテストサービスの全面的な承認を得た。最近発表された研究により、人口規模のPGxが有効な薬物管理は全体の人口保健コストを著しく低下させ、不良薬物事件を減少させ、そして全体の人口幸福感を高めることができる。これらのメリットは、大規模な実体と自己保険の雇用主に顕著なコスト節約をもたらすことができ、後者は2022年に米国のすべての雇用主の約65%を占めている。我々は、我々のPGxテストサービスを利用して、大型実体、自己保険の雇用主、医療保健提供者、コンシェルジュヘルスケア提供者にPGDテストサービスを提供する予定だ。

2024年9月11日、ADCLはMpox Clade IおよびClade IIの検査を含むMpox(前身は猿痘)を検出する臨床検査サービスを拡張したことを発表した。ADCLが関連する規制機関(NYSHOHとFDAを含む)と相互作用した後、ADCLは拡張されたMPOX検査サービスを開始した。同社はADCLがニューヨーク州や他の州のMpox脅威に対する反応を支持すると信じている。2022年9月、ADCLの線状Mpoxウイルス1.0検出方法は、実験室で開発されたMpox Clade IIを検出するための検出方法として承認された。2024年8月、ADCLは追加の検証テストを行い、この検出はMpox Clade Iの遺伝子配列も検出できることを示し、Mpox Clade Iは

世界保健機関(WHO)は2024年8月14日に国際的に注目されている突発的な公共衛生事件に入ることを発表した。ADCLはニューヨーク州石渓に位置するCLEP/CLIA分子診断実験室でテストサービスを提供する。現在、MPOXの米国における実例は非常に少なく、MPOXの将来の経路はまだ不明である。したがって、私たちが私たちが承認したMpoxテストから収入と利益を生むことができるという保証はない。

歴史的に見ると、私たちのMDXテストサービスの収入の大部分は私たちのSafeCircle新冠肺炎テスト解決策から来て、私たちの2023年度第3四半期から、この解決策に対するテスト需要は大幅に低下し、収入が大幅に減少した。私たちは未来に新冠肺炎の検査に対する需要が引き続き減少することを予想して、私たちは未来に新冠肺炎の検査サービスを中止するかもしれない。

DNAタグとセキュリティ製品とサービス

私たちのDNA製造とポリメラーゼ連鎖反応によるDNA検出に関する専門的な知識を利用することによって、私たちのDNAタグと安全製品とサービスは、私たちの顧客が私たちのLineaDNAプラットフォーム上で製造された非生体DNAタグを使用してユニークな方法で物体を標識し、DNAタグの存在または非存在を検出することによってこれらの物体を識別することを可能にする。Scert商標をプラットフォームとして共同販売する同社のコアデオキシリボ核酸タグおよび安全製品およびサービス

これまで、私たちのDNAタグと安全製品とサービスの最大のビジネスアプリケーションは綿の追跡とソース認証です。

2021年12月23日に法律となった“ウイグル人強制労働防止法”に署名し、新疆ウイグル自治区で採掘、生産または製造された商品は、すべてまたは一部が新疆ウイグル自治区(新疆ウイグル自治区)で採掘、生産または製造され、米国に入ってはならないと規定されている。2022年6月17日、UFLPAはまた、商品がXUAR由来の証拠ではないことを証明するために、DNAタグおよび同位体分析を輸入業者として使用することができる。最近、2024年7月、同社は多国籍アパレル/織物製造·調達会社Indus Groupとその確実性プラットフォームについて長年の商業化合意を達成したことを発表した。

我々の現在の業務計画は、消費者と政府の製品トレーサビリティの認識を利用して、私たちの既存のパートナー関係を拡大し、私たちのDNAタグと安全製品やサービスのために新しいパートナー関係を求めることであり、この業務計画は会社のその業務部門に対する戦略審査結果によって変わる可能性があるにもかかわらず、綿に重点を置いている。

2024年12月17日、同社はそのDNAタグと安全製品·サービス業務部門を剥離する可能性を模索していると発表した。資産剥離が完了することは保証されない。

販売とマーケティング

私たちは5人の販売とマーケティングに従事している従業員がいて、そのうちの3人は直接販売に参加しています。

研究と開発

当社のすべての事業セグメントにおいて、新しい強化されたテクノロジーの継続的な開発が将来の成功に不可欠であると信じています。

我々の治療DNA生産サービス部門では，我々の研究·開発はLineaDNAとLineaIVTプラットフォームの開発と最適化に重点を置いている。LineaDNAプラットフォームの開発と最適化はDNA生産量の向上、精製ワークフローの向上、商品コストの低減とDNA配列忠実度の向上に集中している。LineA IVTプラットフォームの開発と最適化の重点はLineRNAP酵素の性能、及びLineRNAPの製造生産量の向上である。

現在，当社のMDX検出サービスやDNAタグおよび安全製品やサービス業務部門に関する活動は，既存製品やサービスを商業化することに集中しているため，研究·開発活動は現在少ない。

2024年9月30日と2023年9月30日までの会計年度において、研究開発活動への支出はそれぞれ約360万ドル万ドルと370万ドル万ドルであった。

原材料と仕入先

我々はすべてのPCR反応においてDNAポリメラーゼ(DNAP)を用いてDNAを増幅した。DNAPは、複数のソースから得ることができる。私たちの原材料源には合成DNAテンプレート源も含まれており、これらのソースを拡大して私たちの製品/サービス製品のために使用することができ、様々なソースからこれらのテンプレートを得ることができます。私たちの治療DNA生産サービスのために、私たちのサービスは、特定のソースからの投入(DNAPを含む)を最適化するかもしれません。単一サプライヤーによって生産されたあるDNAPの予見できない中断または利用不可能は、交換されたDNAPに適合するために、製品仕様およびワークフローを修正したので、生産遅延を招く可能性があります。また，我々のLineRNAPは多様なソースで製造可能であるが，現在は単一サプライヤーによって製造されている。この単一サプライヤーがLineRNAPの生産を停止することは、LineRNAPの生産が新しいサプライヤーに移転したため、生産遅延および/または顧客交付遅延を招く可能性がある。

製造業

我々の治療用DNA生産サービスとDNAタグおよび安全製品とサービス部門に対して、私たちは石渓にある工場のLineaDNAプラットフォームを通じて大量のDNAを製造することができる。我々の治療DNA生産サービスでは，現在GLP級DNAを製造しており，2025年1月にGMP非薬物物質級DNAを提供し，2026年上半期にGMP薬物物質級DNAを提供する予定である。LineRNAPは米国に位置する第三者CDMOが会社のために作成した。私たちはまた石渓にあるDNAタグと安全製品とサービス部門のすべての認証を完成するための内部能力を持っている。

私たちの製品/サービス流通とビジネス契約

私たちの製品/サービスは以下のように分布しています

協力と許可協定

コーネル大学獣医学院です2023年6月、同社はコーネル大学獣医学院と追加の協賛研究協定(“SRA”)を締結し、この合意に基づき、双方はLNP製剤と線形DNA発現ベクターの開発と最適化を求め、価値の高い獣医疾患適応のために使用し、最初の重点は馬感染症であった。SRAが規定する履行期間は2025年6月30日までであり，いずれか一方は少なくとも60日の書面通知後に終了することができる

顧客

2024 年 9 月 30 日に終了した会計年度における製品およびサービスの販売による収益は、 MDx 検査サービスおよび治療用 DNA 生産セグメントの 2 つの顧客からそれぞれ 26% と 17% を占めています。当社の収益は

我々MDXテストサービス部門の2つのお客様は、2023年9月30日までの会計年度において、それぞれ65%と14%の製品およびサービスを販売しています。2023年9月30日までの会計年度において、収入の65%はニューヨーク大学と締結された新冠肺炎テスト契約からであり、この契約は2023年6月に終了した。2024年9月30日現在、4社の顧客が私たちの売掛金の59%を占めている。2023年9月30日現在、3社の顧客が私たちの売掛金の60%を占めている。一般的に、私たちの顧客は私たちに製品やサービスを購入する義務がなく、私たちの製品やサービスの注文を停止することができ、あるいは既存の注文や契約をいつでも終了することができ、わずかまたは経済的な処罰を受けることができない。私たちの任意の重要な顧客の流失、これらの顧客の売上に対するいかなる大幅な低下、あるいは私たちの顧客の購入時間や数量のいかなる重大な変化も、収入の低下を招き、私たちの業務、財務状況、または運営結果を損なう可能性があります。

競争

核酸をベースとした治療，生物製剤，デオキシリボ核酸製造市場で業務を展開しているいくつかのライバルは，MillipreSigma社，Precigen社，Aldevron社，Charles River実験室社，集積DNA技術会社，4 base BioPLC社，MaxCyte社，Touchlight Genetics社，Quantoom Bioscience社，Syngoi技術社，S.L.U，Generation Bio，Co.，ノワ製薬，Kite Pharma，Inc.，Juno治療会社，Promega社，Origene Technologies，Inc.，藍鷺バイオテクノロジー，Gen Art，金瑞生物科技，InLegen，Inc.，Legen，Inc.

我々が分子や遺伝子診断の分野で業務を展開しているいくつかの競争相手は，23 andMe，Inc.，米国実験室会社(LabCorp)；Quest Diagnostics Inc.，Myriad Genetics，Inc.，ARUP実験室，MyOme，Inc.，Sonic Healthcare USA，Fulgent Genetics，Everly Well，Inc.およびFulgent Genetics，Inc.である.

サプライチェーンセキュリティおよび製品認証市場で運営されているいくつかのライバルとしては、Alpvision sa，Authentix，Inc.，Brandwatch Technologies，Inc.，Chromology LLC，Collectors Aerse，Inc.，DataDot Technology Limited，De La Rue Plc.，DigimarcCorporation，DNA Technologies，Inc.，Haelixa Ltd.，Inc.，ICA BrembH，OIEH Corporation，Informium AG，OPSEC Security Group，Plc.，Microtag.Lttech，Nanotc.Corporation，Inlitomity，InPSEC Security Group，Plc.TruTag Technologies，Inc.，Tailorlux GmbHとYottaMark，Inc.

私たちは未来に私たちの製品とサービスとの競争が続いて悪化すると予想する。私たちの主要市場の競争は主に以下の要素によって推進されていると考えられる

競合他社が当社の製品に代わる優れた技術や費用対効果の高い代替品を開発した場合、当社の事業、財務状況および業績に重大な損害を与える可能性があります。

知的財産権

私たちの様々な技術とノウハウの独自性とその保護は私たちの業務に非常に重要だ。私たちの成功は、私たちの技術およびノウハウの独自の特性を保護し、他人の固有の権利を侵害することなく運営し、他人が私たちの固有の権利を侵害することを防止する能力があることにある程度依存する。私たちは私たちの三つの主要商業市場に関連する様々な技術の特許保護をアメリカと国際的に求めて維持しています。私たちは、私たちの業務発展に重要だと思う技術、発明、および特許出願または許可を改善するために努力しています。私たちはまたビジネス秘密、技術ノウハウ、持続的な革新に依存して、私たちの競争地位を発展させ、維持しています。

我々の治療DNA生産サービスとMDX検査サービス業務の発展は初期段階にあるため、著者らはこれらの業務に関連するいくつかの技術の知的財産権の組み合わせも初期段階にある。以下に述べるように、私たちは、これらの商業市場に関連するいくつかの技術の特許出願を提出しているか、または提出しようとしており、私たちが私たちの技術を開発し続けるにつれて、私たちは特許保護を得る他の方法を決定することを意図しており、これはビジネス成功を向上させる可能性がある。

私たちは、私たちの任意の未解決特許出願または未来に提出された任意の特許出願に特許が付与されるかどうかを決定することができず、また、私たちの既存のいかなる特許または未来に私たちに付与された任意の特許が、私たちの技術を保護する上で商業的な用途を持つことを保証することはできない。私たちの知的財産権および独自の権利は、挑戦、無効、回避、侵害または流用される可能性があり、またはそのような知的財産権および独自の権利は、現在の市場傾向を利用して、または他の方法で競争優位性を提供するのに十分ではない可能性があります。詳細は“をご覧ください”リスク要因-私たちの知的財産権に関するリスク.”

2024年12月9日現在、私たちの特許組み合わせは、私たちの3つの主要業務市場に適用される発行された特許出願および係属中の特許出願を含みます

特許保護に加えて、私たちは商標、商業秘密、ノウハウ、他の固有情報、および持続的な技術革新に依存して、私たちの競争地位を発展させ、維持しています。私たちの治療DNA生産サービスで、私たちは現在商業秘密保護に深刻に依存している。私たちは、私たちの業務において特許保護から保護されているか、または特許保護に適していないと考えられる側面を保護し、保護し、独自の情報の機密性を維持することを求めている。私たちは、当社の従業員やコンサルタントと契約を締結することを含む、当社の独自情報およびビジネス秘密を保護する措置をとっていますが、第三者は、実質的に同じ独自の情報および技術を独立して開発したり、他の方法で私たちのビジネス秘密を取得したり、当社の技術を開示したりすることができます。したがって、私たちは私たちの商業秘密を意味的に保護することができないかもしれない。私たちの政策は、私たちの従業員、コンサルタント、外部科学協力者、協賛研究者、および他のコンサルタントに、私たちとの雇用や相談関係を開始する際に秘密協定を実行することを要求します。これらの合意は、個人と私たちとの関係中に開発または開示された当社の業務または財務に関するすべての機密情報は、特定の場合を除いて第三者に開示されてはならないことを規定している。従業員との合意は

また、従業員が私たちに雇用された過程で構想されたすべての発明または従業員が私たちの機密情報を使用して構想したすべての発明は、私たちの独自の財産であることが規定されている。しかしながら、このようなセキュリティプロトコルおよび発明譲渡プロトコルは違反される可能性があり、このような違反に対応するための十分な救済措置がない可能性がある。私たちの知的財産権に関連するリスクに関するより多くの情報は、参照されたいリスク要因-私たちの知的財産権に関するリスク.”

私たちのようなバイオテクノロジー会社の特許地位は通常不確実であり、複雑な法律、科学、および事実の問題に関連している。私たちのビジネス成功はまた第三者の独占権を侵害しないことにある程度依存するだろう。いかなる第三者特許を発行することが、私たちの開発や商業戦略、あるいは私たちの製造技術を変更し、許可証を取得したり、いくつかの活動を停止することを要求するかどうかはまだ確定されていません。私たちは、私たちの将来の製品やサービスを開発または商業化するために必要な独自の権利の許可を得ることができなかったり、私たちに実質的な悪影響を及ぼす可能性があります。もし第三者が米国で準備して提出した特許出願も私たちが権利を持つ技術を持っていると主張した場合、私たちは発明の優先権を決定するために、米国特許商標局(USPTO)の干渉または派生プログラムに参加しなければならないかもしれない。詳細は“をご覧ください”リスク要因-私たちの知的財産権に関するリスク.”

政府による商業非生物製品の承認

私たちが現在商業化しているDNAタグと安全製品とサービスはどんな政府の承認も必要ない。

新冠肺炎検査に対する政府の規定

監督検査は一般的にFDAの監督管理を受けず、医療保険と医療補助サービスセンター(CMS)はすでに表明し、不特定患者の結果を報告するために監督検査を行い、CLIA認証を必要としない。ADCLはSafeCircleを提供しています^ＴＭモニタリング測定は現在の疾病制御と予防センター(CDC)、FDA、CMSとニューヨーク州衛生部の提案に符合する。

また、ニューヨーク州の臨床診断テストとLDTの審査と承認は現在NysdohとFDAの管轄範囲に属している。ADCLはNysdoh法規に準拠したすべての臨床診断テストとLDTを提供する。我々の新冠肺炎テストサービスとLDTSに関するリスクに関するより多くの情報は、“を参照してください”我々の顧客及びパートナーの候補薬物及び生物治療製品の規制承認及びその他の法的コンプライアンス事項に関連するリスク”

政府の薬品や生物製品の規制は

我々のLineaDNAプラットフォームにより生産されたDNAは，顧客が直接薬物や生物製品として使用することができ，顧客が薬品や生物製品に添加することも可能である。私たちは私たちのLineaDNAプラットフォームに基づいて薬物や生物製品の承認を求めるつもりはありませんが、私たちのLineaDNAの需要は私たちの顧客が私たちの技術を使用して薬物や生物製品の承認を求める能力にある程度依存します。バイオ製品は、メッセンジャーリボ核酸療法を含むワクチン、遺伝子療法、および組換え治療タンパク質などの広範な製品を含む。

薬品と生物製品はアメリカFDAとその他の監督管理機関及び外国の類似機関の広範な監督管理を受けている。米国では，FDAは“連邦食品，薬物と化粧品法”，“公衆衛生サービス法”及びその実施条例に基づいて薬品と生物製品を規制している。規制の承認を得て、その後、適用される連邦、州、地方、外国の法規と条例を遵守する過程には、多くの時間と財政資源が必要だ。

私たちのいくつかの製品は規制されているか、あるいは規制されるべき薬品と生物製品に組み込まれるかもしれない。私たちのいくつかの製品は規制された薬物や生物製品かもしれない。いずれの場合も、関連する薬剤または生物学的候補薬が規制部門の承認を得るまで、実質的な収入を得ることはあまり不可能である。FDAとその他の当局は薬品と生物製品の研究、開発、テスト、製造、貯蔵、記録保存、承認、ラベル、販売促進とマーケティング、流通、承認後のモニタリングと報告、サンプリングと輸出入などの方面に対して監督管理を行う。適用される米国の要件を遵守しないことは、FDAがマーケティング申請の提出を拒否し、完全な返信を発行すること、または未解決の新薬申請(NDA)または生物製品許可申請(BLA)を承認しないこと、または警告状、無タイトル手紙、Form 483、製品リコール、製品差し押さえ、生産または流通の完全または一部の一時停止、禁止、罰金、民事処罰、訴訟、政府調査、および刑事起訴のような様々な行政または司法制裁を会社に受けさせる可能性がある。

商業治療製品として承認される前に，製品の安全性や有効性に関連する臨床前および臨床的評価を経なければならない薬物や生物製品。私たちの協力者と顧客がその製品を販売しようとしている国/地域で管轄権を持つ規制機関は、臨床試験を延期または棚上げし、製品の承認を延期したり、その製品が承認できないことを決定したりする可能性がある。私たちの顧客がその製品を販売しようとしている国/地域では、原材料や供給、品質管理と保証、安全性、有効性、または製品が偽物やブランドミスとされているなどの面で重大な問題がある場合、FDAや同様の政府機関は製品の承認を撤回したり、生産を一時停止したりする権利がある。

実験室で開発されたテスト

我々のMDXテストサービスは，会社が開発·検証したLDTを用いる.歴史的に見ると、FDAは大多数のLDTに対して法執行自由裁量権を行使した。しかしながら、2024年4月29日、FDAはLDTに関する最終ルールを公表し、FDAは、その計画が4年以内に5段階で多くのLDTの実行自由裁量を終了することを概説した。第1段階(2025年5月6日施行)では、LDTを実行する臨床実験室は、医療機器(有害事象)報告および是正/除去報告要件、ならびにFDA品質システム法規(QSR)下の苦情アーカイブ維持要件の遵守を要求されるであろう。第2段階(2026年5月6日施行)では、臨床実験室は、他のすべての設備要件(例えば、登録/上場、ラベル、研究使用)を遵守することを要求されるが、残りのQSR要件および発売前審査は除外される。第3段階(2027年5月6日施行)において、臨床実験室は、すべての残りの適用QSR要件を遵守することを要求されるであろう。第4段階(2027年11月6日施行)では、臨床実験室は高リスクテスト(すなわち上場前承認(PMA)要求制約を受けたテスト)の上場前審査要求を遵守することを要求される。最後に、第5段階(2028年5月6日施行)において、臨床実験室は、中程度および低リスク試験(すなわち、最初または510(K)に要求される試験)の発売前審査要件を遵守することを要求されるであろう。

最終規則によると、いくつかのタイプのテストはある程度裁量権を実行し続ける資格があるだろう。例えば、ニューヨーク州衛生局が承認したLDTは、上場前の審査要求を免除するが、第1段階から第3段階の要求を遵守する。同様に、2024年5月6日までに初めて発売されたLDTは、その後、修正されていない場合や限られた方法で修正されていれば、発売前の審査や大多数の品質システムの要求を免れ、第1段階と第2段階の要求を守る。しかし、FDAは、連邦食品、薬物、化粧品法に違反する行為に対して法執行行動を行う自由裁量権を保持し、適切な時期にそうしようとしていると指摘している。FDAはさらに、状況に応じて、またはこれらの政策の状況が変化した場合に、FDAの良好な指導アプローチに基づいて、最終ルールに規定されている任意の法執行裁量政策を更新することができると説明している。

すでに複数の訴訟がLDT最終ルールを疑問視しており，原告はこのルールの中で，FDAはLDTを医療機器として規制する権利がないと弁明している。現在、私たちはこのような訴訟の勝訴の可能性を予測できない。

国会は立法言語を制定しており、通過すればLDTSにおけるFDAの権力を明らかにする。この点で、最近、“正確な最前線IVCt発展法案を確認する”、あるいは有効法案が、2020年3月に初めて提出され、最近再提出されたのは2023年3月である。この法案は新しいものを作ることでリスクに基づく方法を提案しました体外培養臨床試験またはIVCt、規制された製品の種類。提案されたように、この法案は、多くの既存のLDTを、提案された上場前承認、品質システム、およびラベル要件からそれぞれ離脱させるが、このようなテストが他の規制要件(例えば、登録および上場、有害事象報告)に適合することを要求するであろう。高リスクなIVCtを市場に出すためには，期待用途の分析と臨床有効性の合理的な保証が必要である。VALIDに基づいて、実験室がそのIVCTを開発するための施設、方法、制御が品質システムの要求に適合することを決定できるように、事前認証プログラムを構築する。事前に認証された場合、実験室によって開発され、FDA認証命令の範囲内に属するいくつかの低リスク静脈注射CTsは発売前に審査されない。新しい規制の枠組みには品質管理と上場後の報告要求が含まれるだろう。FDAは、例えば、このテストが合理的な可能性がある場合、死亡または深刻な健康上の不利な結果をもたらす可能性がある場合を含む、様々な理由でCTSの静脈内注射の承認を撤回する権利があるであろう。しかし、私たちはこの(または他の法案)が現在(または他の)形で採択されるかどうかを予測することができず、このような提案が私たちの業務に与える影響を定量化することもできない。

臨床実験室改善修正案

CLIA は、疾患の診断、予防、または治療のための情報を提供することを目的としてヒト由来の標本で検査を行う臨床研究所を規制する連邦法です。CLIA は、人材の資格、管理、能力試験への参加、患者試験管理、品質管理、品質保証、検査の分野における特定の基準を義務付けることによって、米国における臨床ラボの品質と信頼性を確保することを目的としています。臨床研究所は、 CLIA 認証の例外に該当しない限り、ヒト標本での試験を行うためには、 CLIA の認証を取得する必要があります。

such as research laboratories that test human specimens but do not report patient-specific results for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of individual patients. CLIA certification is also required to be eligible to bill Federal and State healthcare programs, as well as many private third-party payers, for diagnostic testing and services. ADCL is a NYSDOH CLEP-permitted and CLIA-certified laboratory which is currently permitted for virology and genetic (molecular).

Compliance with Environmental Law

We and any suppliers we currently or may in the future engage are subject to numerous federal, state, and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment, and disposal of hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air, and water; and employee health and safety. We believe that we are in compliance with all applicable environmental law and do not have any material costs of compliance.

Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third party facilities. We also could incur significant costs associated with civil or criminal fines and penalties. Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our research, product development and manufacturing efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or wastes. Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not carry specific biological or hazardous waste insurance coverage, and our property, casualty, and general liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our preclinical trials, future clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, prospects, financial condition, results of operations, and prospects.

Employees

As of September 30, 2024, we had a total of 48 employees (46 fulltime and 2 part-time), consisting of 4 in executive management, 8 in research and development, 8 in quality and compliance, 3 in finance, accounting and human resources, 8 in operations/production, 5 in sales and marketing, 4 in administration and support services, 4 in information services, and 4 in clinical laboratory operations. Since June 2012, we have been working with Insperity Inc. to assist in managing many of our back-end administrative human resources, benefits, and payroll responsibilities. We are an at-will employer and generally do not enter into employment agreements requiring our employees to continue in our employment for any period of time, with the exception of our Chief Executive Officer, Dr. James A. Hayward. The initial term of Dr. Hayward’s current employment agreement was July 1, 2016 through June 30, 2017, and this employment agreement automatically renews for one-year periods subject to ninety days’ prior notice of non-renewal by Dr. Hayward or us in accordance with the terms of the employment agreement. As of June 30, 2024, the employment contract automatically renewed for an additional year.

Available Information

We are subject to the informational requirements of the Exchange Act, which requires us to file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments to such reports and other information with the SEC. Because we file documents electronically with the SEC, you may obtain this information by visiting the SEC’s website at: www.sec.gov. Our website is located at: www.adnas.com. The information on, or that may be accessed through, our website is not incorporated by reference into and should not be considered a part of this report.

ITEM 1A.RISK FACTORS.

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties, discussed in more detail in the following section. These risks include, among others, the following key risks:

In addition to the above key factors, as well as other variables affecting our operating results and financial condition, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. The following are important factors that could cause actual results or events to differ materially from those contained in any forward-looking statements made by us or on our behalf. The risks and uncertainties described below are not the only ones we face. In addition to the factors discussed elsewhere in this report and our other reports and documents filed with the SEC, risks and uncertainties not presently known to us or that we may currently deem immaterial also may impair our business, financial condition, operating results and/or stock price. If any of the following risks or such other risks actually occurs, our business, financial condition, operating results and/or stock price could be harmed. In the following factors, “volatility in our share price”, “adverse impact on the price (or value) of our shares”, “decline in the price of our Common Stock” and similar terms also refer to our warrants and shares to be received upon exercise of our warrants.

Risks Relating to Our Business:

We have produced only limited revenues. This makes it difficult to evaluate our future prospects and increases the risk that we will not be successful.

Our operations since inception have produced limited revenues and may not produce significant revenues in the near term, or at all, which may harm our ability to obtain additional financing and may require us to reduce or discontinue our operations. While our revenues

increased from $1.9 million in fiscal 2020 to $18.2 million in fiscal 2022, primarily as a result of our COVID-19 testing revenues, in fiscal 2023 our revenues declined to $13.4 million and further declined to $3.4 million in fiscal 2024. You must consider our business and prospects in light of the risks and difficulties we will encounter as a company operating in a rapidly evolving industry. We may not be able to successfully address these risks and difficulties, which could significantly harm our business, operating results, and financial condition.

There is substantial doubt relating to our ability to continue as a going concern.

We have recurring net losses, which have resulted in an accumulated deficit of $309,672,755 as of September 30, 2024. We have incurred a net loss of $7,088,306 for the fiscal year ended September 30, 2024. At September 30, 2024, we had cash and cash equivalents of $6,431,095. We have concluded that these factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the financial statements. We will continue to seek to raise additional working capital through public equity, private equity or debt financings. If we fail to raise additional working capital, or do so on commercially unfavorable terms, it would materially and adversely affect our business, prospects, financial condition and results of operations, and we may be unable to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms, if at all. As discussed in Note M to our consolidated financial statements, on October 31, 2024, we closed on a registered direct offering and received net proceeds, after deducting placement agent fees and other estimated offering expenses payable by us, of approximately $5.8 million. As a result of this offering, our consolidated cash balance as of November 30, 2024 was approximately $10.1 million.

We may not successfully implement our business strategies, including achieving our growth objectives.

We may not be able to fully implement our business strategies or realize, in whole or in part within the expected time frames, the anticipated benefits of our various growth or other initiatives. Our various business strategies and initiatives, including our growth, operational and management initiatives and the development in particular of our Therapeutic DNA Production Services, are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. The execution of our business strategy and our financial performance will continue to depend in significant part our ability to obtain sufficient financing and on our executive management team and other key management personnel, our ability to identify and complete suitable acquisitions, our executive management team’s ability to execute new operational initiatives, and certain matters outside of our control. In addition, we may incur certain costs as we pursue our growth, operational and management initiatives, and we may not meet anticipated implementation timetables or stay within budgeted costs. As these initiatives are undertaken, we may not fully achieve our expected efficiency improvements or growth rates, or these initiatives could adversely impact our customer retention, supplier relationships or operations. Also, our business strategies may change from time to time in light of our ability to implement our business initiatives, competitive pressures, economic uncertainties or developments, or other factors.

We may modify and refine our business strategy, including a possible divesture or closing of our DNA Tagging and Security Products and Services and/or MDx Testing Services segments.

Our management is currently engaged in a strategic review of the Company’s business segments that may result in the divestiture or closure of the Company’s DNA Tagging and Security Products and Services segment and/or MDx Testing Services, as well as workforce reductions and potential management changes. To this end, on December 17, 2024, the Company announced it is exploring the potential divestiture of its DNA Tagging and Security Products and Services business segment. No assurance can be given that a divestiture will be completed. Further, the definitive terms and structure of any possible closure or divestiture have not been determined or approved by the Company’s Board of Directors. Although the purpose of any closure or divestiture would be to reduce the Company’s expenses and effectuate cost savings, it is possible that there may be related restructuring costs. We expect that based on available opportunities and our beliefs regarding future opportunities, we will continue to modify and refine our business strategy. The initial cash received from any divestiture, if any, may be limited, although the terms of a divesture may include future royalties, earn-outs or similar terms, any of which could fail to be earned or received.

We may require additional financing which may in turn require the issuance of additional shares of common stock, preferred stock or other debt or equity securities (including convertible securities) and which would dilute the ownership held by our stockholders.

We may need to raise funds through either debt or the sale of our shares of our common stock in order to achieve our business goals. Any additional shares issued would further dilute the percentage ownership held by existing stockholders. Furthermore, if we raise funds

in equity transactions through the issuance of convertible securities which are convertible at the time of conversion at a discount to the prevailing market price, substantial dilution is likely to occur resulting in a material decline in the price of our common stock. Our public offerings completed in November 2014, April 2015, December 2018, November 2019, August 2022 and May 2024, our registered direct offerings completed in December 2017, January 2021 and February 2022, our registered direct public offering and concurrent private placement completed in November 2015, January 2024 and October 2024, and our private placements completed in November 2016, June 2017, and August 2019 resulted in dilution to investors and future offerings of securities could result in further dilution to investors.

If we are unable to maintain and implement effective internal controls over financial reporting and disclosure, investors may lose confidence in the accuracy and completeness of our reported financial information and the market price of our common stock may be negatively affected.

As a public company, we are required to maintain internal control over financial reporting and our disclosure controls and to report any material weaknesses in such internal control and our disclosure controls. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on our internal controls on an annual basis. If we have material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements and disclosure may be materially misstated. We have implemented various systems, processes and documentation necessary to comply with Section 404 of the Sarbanes-Oxley Act. We will need to maintain and enhance these processes and controls as we grow, and we will require additional management and staff resources to do so. Additionally, even if we conclude our internal controls or disclosure controls are effective for a given period, we may in the future identify one or more material weaknesses in our internal controls or disclosure controls, in which case our management will be unable to conclude that our internal control over financial reporting or disclosure controls are effective. Even if our management concludes that our internal control over financial reporting and our disclosure controls are effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal controls or the level at which our internal controls are documented, designed, implemented or reviewed. In addition, if we lose our status as a “smaller reporting company,” we will be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting.

If we are unable to conclude that our internal control over financial reporting or our disclosure controls are effective, because we had one or more material weaknesses, investors could lose confidence in the accuracy and completeness of our financial disclosures. Irrespective of compliance with Section 404, any failure of our internal control over financial reporting could have a material adverse effect on our reported operating results and harm our reputation. Internal control deficiencies could also result in a restatement of our financial results.

We expect that compliance with these requirements will continue to increase our legal and financial compliance costs and will make some activities more time consuming and costly. In addition, we expect that our management and other personnel will continue to need to divert attention from operational and other business matters to devote substantial time to these public company requirements. We also expect that it will continue to be expensive for us to maintain director and officer liability insurance.

If we fail to maintain an effective system of internal control over financial reporting or our disclosure, we may not be able to accurately report our financial results, and current and potential stockholders may lose confidence in our financial reporting. This, in turn, could have an adverse impact on trading prices for our common stock. If we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting or disclosure that are deemed to be material weaknesses, the market price of our stock could decline, our ability to access the capital markets could be reduced and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources.

Fluctuations in quarterly results may cause a decline in the price of our common stock.

Our revenues and profitability are difficult to predict due to the nature of the markets in which we compete, as well as our recent entry into new markets and products, fluctuating user demand, the uncertainty of current and future global economic conditions, and for many other reasons, including that our operating results are highly dependent on the volume and timing of orders received during a quarter, which are difficult to forecast. Customers generally order on an as-needed basis and we typically do not obtain firm, long-term purchase commitments from our customers. The quarterly fluctuations in operating results described above may cause a decline in the price of our common stock.

The ongoing military conflicts between Russia and Ukraine, Israel and Hamas and Israel and Hezbollah have caused geopolitical instability, economic uncertainty, financial markets volatility and capital markets disruption. Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the capital markets resulting from the conflicts in Ukraine and the Middle East or any other geopolitical tensions.

In late February 2022, Russia invaded Ukraine, significantly amplifying already existing geopolitical tensions among Russia and other countries in the region and in the west, including the United States. Russia’s invasion, the responses of countries and political bodies to Russia’s actions, the larger overarching tensions, and Ukraine’s military response and the potential for wider conflict have resulted in inflation, financial market volatility and capital markets disruption, potentially increasing in magnitude, and could have severe adverse effects on regional and global economic markets and international relations. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.

Further, on October 7, 2023, Hamas, a U.S. designated Foreign Terrorist Organization, launched terrorist attacks against Israel. Israel then declared war on Hamas and there is currently an armed conflict in Israel and the Gaza Strip. At the same time, and because of the war declaration against Hamas, the clash between Israel and Hezbollah in Lebanon has escalated to an armed conflict and there is a high possibility that it will turn into a greater regional conflict in the future. The extent and duration of the wars in Ukraine, Israel/Gaza and Lebanon, as well as expanding geopolitical tensions and any resulting market disruptions could be significant and could potentially have a substantial impact on the global economy, market volatility and our business for an unknown period of time. Any of the above-mentioned factors could materially adversely affect our business, financial condition, and results of operations.

Third parties may use our products in ways that could damage our reputation.

After our customers have received our products, we do not have any control over their use and our customers may use them in ways that are harmful to our reputation as a supplier of synthetic DNA products. In addition, while we plan to establish a biosecurity program designed to ensure that third parties do not obtain our products for malevolent purposes, we cannot guarantee that these preventative measures, once instituted, will eliminate or reduce the risk of the domestic and global opportunities for the misuse of our products. Accordingly, in the event of such misuse, our reputation, future revenue and operating results may suffer.

Our business could be adversely impacted by inflation.

Increases in inflation may have an adverse effect on our business. Current and future inflationary effects may be driven by, among other things, supply chain disruptions and governmental stimulus or fiscal policies as well as the ongoing military conflicts in Ukraine and the Middle East. Continuing increases in inflation could impact the overall demand for our products, our costs for labor, material and services, and the margins we are able to realize on our products, all of which could have an adverse impact on our business, financial position, results of operations and cash flows.

We may encounter difficulties in managing our growth, and these difficulties could impair our profitability.

Currently, we are working simultaneously on multiple projects, expanding our DNA manufacturing capacity as well as targeting several market sectors, including activities in the human therapeutics, diagnostics and product security sectors. These diversified operations and activities place significant demands on our limited resources and require us to substantially expand the capabilities of our technical, administrative, and operational resources. In addition, as discussed in our risk factor disclosure above on page 19, our management is currently engaged in a strategic review of the Company’s business segments that may result in the divestiture or closure of the Company’s MDx Testing Services and/or DNA Tagging and Security Products and Services, as well as workforce reductions and potential management changes.

If we are unable to manage this growth and/or potential restructuring effectively, our shipments to our customers could be impacted, our time and resources could be diverted from other products and offerings and our business and operating results could suffer. Our ability to manage our operations and costs, including research and development, costs of components, manufacturing, sales and marketing, requires us to continue to enhance our operational, financial and management controls, reporting systems and procedures and to attract and retain sufficient numbers of talented employees. Failure to attract and retain sufficient numbers of talented employees will further strain our human resources and could impede our growth.

A cybersecurity incident and other technology disruptions could negatively affect our business and our relationships with customers.

We use technology in substantially all aspects of our business operations. The widespread use of technology, including mobile devices, cloud computing, and the internet, gives rise to cybersecurity risks, including security breaches, espionage, system disruption, theft and inadvertent release of information. Our business involves the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including information relating to customers and suppliers, private information about employees, and financial and strategic information about us and our business partners. If we fail to effectively assess and identify cybersecurity risks associated with the use of technology in our business operations, we may become increasingly vulnerable to such risks. Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventative measures and incident response efforts may not be entirely effective. The theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage.

Risks Relating to Manufacturing, Development, and Industries:

If we are unable to expand our DNA manufacturing capacity, we could lose revenue and our business could suffer.

In order to expand our manufacturing capacity for our DNA production, including our LineaDNA platform and GMP Site 1 and GMP Site 2, we need to build additional manufacturing capacity that will require additional capital expenditures and additional financing. Our technology and the production process for our DNA production are complex, involving specialized parts, and we may encounter unexpected difficulties in the manufacture, improvement or increasing the capacity of our DNA production, and addressing these difficulties may cause us to divert our time and resources from our other product offerings. There is no assurance that we will be able to continue to increase manufacturing capacity in order to meet the volume and quality requirements necessary for success in our existing and potential markets. Manufacturing and product quality issues may arise as we continue to increase the scale of our production. If our DNA manufacturing equipment and tools do not consistently produce DNA products that meet our customers’ performance expectations, our reputation may be harmed, and we may be unable to generate sufficient revenue to become profitable. Any delay or inability in expanding our manufacturing capacity could diminish our ability to develop or sell our DNA products, which could result in lost revenue and materially harm our business, financial condition and results of operations.

Rapidly changing technology and extensive competition in synthetic DNA could make the services or products we are developing obsolete or non-competitive unless we continue to develop and manufacture new and improved services or products and pursue new market opportunities.

The synthetic DNA industry is characterized by rapid and significant technological changes, frequent new product introductions and enhancements and evolving industry demands and standards. Our future success will depend on our ability to continually improve the services we are developing and producing, to develop and introduce new services that address the evolving needs of our customers on a timely and cost-effective basis and to pursue new market opportunities that develop as a result of technological and scientific advances. These new market opportunities may be outside the scope of our proven expertise or in areas which have unproven market demand, and the utility and value of new products and services developed by us may not be accepted in the markets served by the new services. Our inability to gain market acceptance of existing products and services in new markets or market acceptance of new products and services could harm our future operating results. Our future success also depends on our ability to manufacture these new and improved products and services to meet customer demand in a timely and cost-effective manner, including our ability to resolve manufacturing issues that may arise as we commence production of any new products and services we develop.

In addition, there is extensive competition in the synthetic DNA industry, and our future success will depend on our ability to maintain a competitive position with respect to technological advances. Technological development by others may result in our technologies, as well as products developed using our technologies, becoming obsolete. Our ability to compete successfully will depend on our ability to develop proprietary technologies and services that are technologically superior to and/or are less expensive than our competitors’ technologies and products. Our competitors may be able to develop competing and/or superior technologies and processes and compete more aggressively and sustain that competition over a longer period of time.

Pharmaceutical and biologic products and services are highly complex, and if we or our collaborators and customers are unable to provide quality and timely offerings to our respective customers, our business could suffer.

The process of manufacturing pharmaceutical and biologics and their components is complex, highly-regulated and subject to multiple risks.

Manufacturing biologics is highly susceptible to product loss due to contamination, equipment failure, improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions.

Our ability to generate revenue in the pharmaceutical and biologic market depends on our ability to manufacture products that meet exacting quality and safety standards. If we are unable to manufacture these products to the required levels, it could have an adverse effect on our business, financial condition, and results of operations and may subject us to regulatory actions, including product recalls, product seizures, injunctions to halt manufacture or distribution, restrictions on our operations, or civil sanctions, including monetary sanctions and criminal actions. In addition, we could be subject to costly litigation, including claims from our collaborators and customers for reimbursement for the cost of our products or other related losses, the cost of which could be significant.

We will need to develop and maintain manufacturing facilities that meet current Good Manufacturing Practices.

Since a primary focus of our business will be contract manufacturing of synthetic DNA for use as critical starting materials and/or incorporation into a biologic, drug substance or drug product, it will be critical for us to be able to produce sufficient quantities of materials required for the manufacture of our product candidates or the product candidates of our collaborators or customers for preclinical testing and clinical trials, in compliance with applicable regulatory and quality standards. If we are unable to provide such manufacturing supplies or fail to do so on commercially-reasonable terms, we may not be able to successfully produce sufficient supply of product candidate(s) or we may be delayed in doing so. Such failure or substantial delay could materially harm our business.

Our customers will rely on us for synthetic DNA and other biological materials that are used in their discovery and development programs. These materials can be difficult to produce and occasionally have variability from the product specifications. Any disruption in the supply of these biological materials consistent with our applicable product specifications could materially adversely affect our business. Although we have control processes and screening procedures, biological materials are susceptible to damage and contamination and may contain active pathogens. We may also have lower yields in manufacturing batches, which can increase our costs and slow our development timelines. Improper storage of these materials, by us or any third-party storage facilities, may require us to destroy some of our biological raw materials or product candidates.

We also face risks that we may fail to synthesize and manufacture our customers’ product candidates in accordance with their product specifications, and the possibility of termination or nonrenewal of the agreement by our customers at a time that is costly or damaging to us.

In addition, the FDA and other regulatory authorities require that our products be manufactured according to GMP and similar foreign standards relating to methods, facilities, and controls used in the manufacturing, processing, and packing of the product, which are intended to ensure that biological and drug products are safe and that they consistently meet applicable requirements and specifications.

Depending on the type and intended use of the synthetic DNA produced by the Company we may be required to register our facilities and list our products manufactured after beginning manufacturing and then annually thereafter with the FDA and certain state and foreign agencies. If the FDA or a comparable foreign regulatory authority does not approve our customers’ product candidates at any of our proposed contract manufacturer’s facilities, or if we fail to maintain a compliance status acceptable to the FDA or a comparable foreign authority, our customers may need to find alternative manufacturing facilities, which would significantly impact our ability to supply our customers’ product candidates, if approved. Any discovery of problems with a product, or a manufacturing or laboratory facility used by us or our strategic partners, may result in restrictions on the product or on the manufacturing or laboratory facility, including marketed product recall, suspension of manufacturing, product seizure, or a voluntary withdrawal of the drug from the market. We may have little to no control regarding the occurrence of such incidents.

If we were unable to provide a solution in time, our customers’ clinical trials could be delayed, thereby limiting our commercial activities associated with those products. The sale of our customers’ products could contain other defects could adversely affect our business, financial condition, and results of operations. Any failure by us or another third-party manufacturers to comply with applicable GMP regulations or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of synthetic DNA in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of any of our customers’ candidates and, therefore, affect our business.

Some pharmaceutical manufacturers are also subject to extensive pre- and post-marketing oversight by the FDA and comparable regulatory authorities in the jurisdictions where the product is being studied or marketed, which include periodic unannounced and announced inspections by the FDA to assess compliance with GMP requirements. If we are a registered facility and an FDA inspection of our facilities reveals conditions that the FDA determines not to comply with applicable regulatory requirements, the FDA may issue observations through a Notice of Inspectional Observations or a “Form FDA 483”. If observations in the Form FDA 483 are not addressed in a timely manner and to the FDA’s satisfaction, the FDA may issue a Warning Letter or pursue other forms of enforcement action. Any failure by us or other contract manufacturers to comply with GMP or to provide adequate and timely corrective actions in response to deficiencies identified in a regulatory inspection could result in enforcement action that could impact our ability to attract and maintain other contract manufacturing arrangements or lead to a shortage of our customers’ products and harm our business, including withdrawal of approvals previously granted, seizure, injunction or other civil or criminal penalties. The failure of us or another manufacturer to address any concerns raised by the FDA or foreign regulators could also lead to plant shutdown or the delay or withholding of product approval by the FDA in additional indications, or by foreign regulators in any indication. Certain countries may impose additional requirements on the manufacturing of drug products or drug substances, on us as contract manufacturers, as part of the regulatory approval process for products in such countries. The failure by us or other third-party manufacturers to satisfy such requirements could impact our ability to obtain or maintain contract manufacturing arrangements with our customers in one or more countries.

Our business also depends on the ability of our collaborators and customers to manufacture the drug or biologic products that incorporate our products. If the FDA determines that our collaborators and customers are not in compliance with FDA laws and regulations, including those governing GMP regulations, the FDA may deny NDA or BLA approval until the deficiencies are corrected. Even if our collaborators or customers obtain regulatory approval for any of their product candidates, there is no assurance that they will be able to manufacture the approved product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product or to meet potential future demand. If our collaborators or customers are unable to produce sufficient quantities for clinical trials or for commercialization, commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.

Pharmaceutical and biologic-related revenue will be dependent on our collaborators’ and customers’ demand for our manufacturing services.

The amount of customer spending on pharmaceutical and biologic development and manufacturing will have an impact on our sales and profitability in the pharmaceutical and biologic market. Our collaborators and customers determine the amounts that they will spend based upon, among other things, available resources, access to capital, and their need to develop new products, which, in turn, are dependent upon a number of factors, including their competitors’ research, development and product initiatives and the anticipated market uptake, and clinical and reimbursement scenarios for specific products and therapeutic areas. Consolidation in the pharmaceutical and biologic industry may impact such spending as customers integrate acquired operations, including research and development (“R&D”) departments and manufacturing operations. Any reduction in spending on pharmaceutical and biotechnology development and related services as a result of these and other factors could have a material adverse effect on our business, results of operations and financial condition.

If the FDA were to begin to enforce regulation of LDTs, we could incur substantial costs and delays associated with trying to obtain pre-market clearance or approval and costs associated with complying with post-market requirements.

Our MDx Testing Services utilize LDTs developed and validated by the Company. ADCL is currently subject to NYSDOH oversight as a CLEP-permitted and CLIA-certified laboratory. Historically, the FDA has exercised enforcement discretion over most LDTs. On April 29, 2024, however, the FDA published a final rule on LDTs, in which the FDA outlines its plans to end enforcement discretion for many LDTs in five stages over a four-year period. In Phase 1 (effective May 6, 2025), clinical laboratories running LDTs will be required to comply with medical device (adverse event) reporting and correction/removal reporting requirements, as well as requirements for maintenance of complaint files under the FDA’s quality systems regulation (QSR). In Phase 2 (effective May 6, 2026), clinical laboratories will be required to comply with all other device requirements (e.g., registration/listing, labeling, investigational use), except for the remaining QSR requirements and premarket review. In Phase 3 (effective May 6, 2027), clinical laboratories will be required to comply with all remaining applicable QSR requirements. In Phase 4 (effective November 6, 2027), clinical laboratories will be required to comply with premarket review requirements for high-risk tests (i.e., tests subject to the premarket approval (PMA) requirement). Finally, in Phase 5 (effective May 6, 2028), clinical laboratories will be required to comply with premarket review requirements for moderate- and low-risk tests (i.e., tests subject to the de novo or 510(k) requirement).

Under the final rule, several types of tests will be eligible for some degree of continued enforcement discretion. For example, LDTs approved by the New York State Department of Health will be exempt from premarket review requirements but will remain subject to the requirements of Phases 1 through 3. Similarly, LDTs first marketed prior to May 6, 2024 that are not subsequently modified, or are modified only in certain limited ways, will be exempt from the premarket review and most quality systems requirements, but will remain subject to the requirements of Phases 1 and 2. The FDA notes, however, that it retains discretion to pursue enforcement action for violations of the Federal Food, Drug and Cosmetic Act at any time and intends to do so when appropriate. The FDA further explains that it may update any of the enforcement discretion policies set forth in the final rule as circumstances warrant or if the circumstances that inform those policies change, consistent with the FDA’s good guidance practices.

Multiple lawsuits have been filed challenging the LDT final rule, in which the plaintiffs argue FDA lacks authority to regulate LDTs as medical devices. We cannot predict the likelihood of success of these lawsuits at this time.

Congress is also working on legislative language that, if enacted, would clarify the FDA’s authority with respect to LDTs. In this regard, most recently, the “Verifying Accurate Leading-edge IVCT Development Act,” or VALID Act, was first introduced in March 2020, and most recently reintroduced in March 2023. The bill proposes a risk-based approach that would subject many LDTs to FDA regulation by creating a new in vitro clinical test, or IVCT, category of regulated products. As proposed, the bill would grandfather many existing LDTs from the proposed premarket approval, quality systems, and labeling requirements, respectively, but would require such tests to comply with other regulatory requirements (e.g., registration and listing, adverse event reporting). To market a high-risk IVCT, reasonable assurance of analytical and clinical validity for the intended use would be needed to be established. Under VALID, a precertification process would be established that would allow a laboratory to establish that the facilities, methods, and controls used in the development of its IVCTs meet quality system requirements. If pre-certified, certain low-risk IVCTs developed by the laboratory and falling within the scope of a certification order from FDA would not be subject to pre-market review. The new regulatory framework would include quality control and post-market reporting requirements. The FDA would have the authority to withdraw approvals for IVCTs for various reasons, including (for example) if there were a reasonable likelihood that the test would cause death or serious adverse health consequences. However, we cannot predict if this (or any other bill) will be enacted in its current (or any other) form and cannot quantify the effect of such proposals on our business.

We must continue to secure and maintain sufficient and stable supplies of components and raw materials.

Certain disruptions in supply of, and changes in the competitive environment for, components and raw materials integral to the manufacturing of our products may adversely affect our profitability. We use a broad range of materials and supplies in our products. A significant disruption in the supply of these materials could decrease production and shipping levels, materially increase our operating costs and materially and adversely affect our revenues and profit margins. Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages, war, acts of terrorism or other interruptions to or difficulties in the employment of labor or transportation in the markets in which we purchase materials, components and supplies for the production of our products, in each case, may adversely affect our ability to maintain production of our products and achieve profitability. Unforeseen discontinuation or unavailability of certain components, such as enzymes (e.g., DNAP and RNAP), nucleotides, or synthetic DNA templates, which are available from multiple suppliers, but some of which we currently primarily source from a single supplier, could cause production delays as we modify our product specifications to accommodate replacement components. If we were to experience a significant or prolonged shortage of critical components from any of our suppliers and could not procure the components from other sources, we would be unable to manufacture our products and ship them to our customers in a timely fashion, or at all, which would adversely affect our sales, margins and customer relations.

The markets for the synthetic DNA produced via our Therapeutic DNA Production Services are very competitive, and we may be unable to continue to compete effectively in these industries in the future.

The principal markets for synthetic DNA are intensely competitive. We compete with many existing suppliers and new competitors continue to enter the market. Many of our competitors, both in the United States and elsewhere, are major pharmaceutical, chemical and biotechnology companies, or have strategic alliances with such companies, and many of them have substantially greater capital resources, marketing experience, research and development staff, and facilities than we do. Any of these companies could succeed in developing products that are more effective than the product candidates that we have or may develop and may be more successful than us in producing and marketing their existing products. Some of our competitors that operate in the nucleic-acid based therapeutic, biologics and DNA manufacturing markets include, without limitation: Precigen, Inc., Aldevron, LLC, Cobra Biologics, Limited, Integrated DNA Technologies, Inc., 4basebio PLC, Ziopharm Oncology, Inc., MaxCyte, Inc., Touchlight Genetics Ltd., Generation Bio,

Co., Novartis AG, Kite Pharma, Inc., Juno Therapeutics, Inc., Elegen, Inc., ANSA Biotechnologies, Promega Corporation, OriGene Technologies, Inc., Blue Heron Biotech, LLC, Gene Art, GenScript Biotech Corporation, and others.

We expect this competition to continue and intensify in the future. Our competitors also compete with us in recruiting and retaining qualified scientific and management personnel, as well as in acquiring technologies complementary to, or necessary for, our programs. Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize synthetic DNA, drug and biologic candidates utilizing synthetic DNA, or other forms of therapeutic DNA that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any LineaDNA that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, synthetic DNA, drug and biologic candidates utilizing synthetic DNA, and other forms of therapeutic DNA developed by our competitors may render our LineaDNA uneconomical or obsolete, and we may not be successful in marketing any drug and biologic candidates and LineaDNA we may develop against competitors.

If any of these risks occur, our business, financial condition and results of operations could be significantly harmed.

The markets for our supply chain security and product authentication solutions are very competitive, and we may be unable to compete effectively in these industries in the future.

The principal markets for our supply chain security and product authentication offerings are intensely competitive. We compete with many existing suppliers and new competitors continue to enter the market. Many of our competitors, both in the United States and elsewhere, are major pharmaceutical, chemical and biotechnology companies, or have strategic alliances with such companies, and many of them have substantially greater capital resources, marketing experience, research and development staff, and facilities than we do. Any of these companies could succeed in developing products that are more effective than the products that we have or may develop and may be more successful than us in producing and marketing their existing products. Some of our competitors that operate in the supply chain security and product authentication markets include: Digimarc Corporation, Haelixa Ltd., ICA Bremen GmbH, IEH Corporation, Oritain Global Limited, SafeTraces, Inc., DeterTech (acquired SmartWater Technology, Inc.), Sun Chemical Corporation, TraceTag International Ltd., TruTag Technologies, Inc., and Tailorlux gmbH.

We expect this competition to continue and intensify in the future.

The market for our MDx Testing Services is very competitive, and we may be unable to compete effectively in this industry in the future.

The principal market for molecular diagnostics testing services is intensely competitive. We compete with many existing testing service providers and new competitors continue to enter the market. Many of our competitors, both in the United States and elsewhere, are major pharmaceutical, chemical and biotechnology companies, or have strategic alliances with such companies, and many of them have substantially greater capital resources, marketing experience, research and development staff, and facilities than we do. Any of these companies could succeed in developing testing services that are more effective than the testing services that we have or may develop and may be more successful than us in producing and marketing their existing testing services. Some of our competitors that operate in the molecular diagnostics testing markets include: 23andMe, Inc., Laboratory Corporation of America (LabCorp); Quest Diagnostics Inc., Myriad Genetics, Inc., ARUP Laboratories, Sonic Healthcare USA, MyOme, Inc., Everly Well, Inc., and Fulgent Genetics, Inc.

Our MDx Testing Services provide higher education institutions, private clients, and businesses located in New York State with COVID-19 testing services, including test scheduling, sample collection and automated results reporting. In June 2023, our COVID-19 testing contract with CUNY which accounted for a substantial portion of our revenues was terminated and we have seen a significant decline in our MDx Testing Services revenue. It is unclear whether we will be able to maintain our current customers who will avail themselves of our testing services, or how regularly we will be able to obtain a flow of business from existing customers. In addition, revenues associated with our clinical testing services for the detection of Mpox are closely tied to the prevalence of Mpox within the United States, which is currently very low. Accordingly, there can be no assurance that we will be able to generate revenue and profits from Mpox testing. If we are unable to successfully develop, validate and commercialize other diagnostic tests and services, our MDx Testing Services may not produce sufficient revenues to become profitable.

We compete with life science, pharmaceutical and biotechnology companies, some of whom are our customers, who are substantially larger than we are and potentially capable of developing new approaches that could make our products and technology obsolete or develop their own internal capabilities that compete with our products.

The market for biologics and drug components products and services in the biopharmaceutical development, life science research, and diagnostics space is intensely competitive, rapidly evolving, significantly affected by new product introductions and other market activities by industry participants and subject to rapid technological change. We also expect increased competition as additional companies enter our market and as more advanced technologies become available. We compete with other providers of outsourced biologics and drug components products and services. We also compete with the in-house discovery, development and commercial manufacturing functions of pharmaceutical and biotechnology companies. Many of our potential competitors, which in some cases are also our customers, are large, well-capitalized companies with significantly greater resources and market share than we have. They may undertake their own development of products that are substantially similar to or compete with our products and they may succeed in developing products that are more effective or less costly than any that we may develop. These competitors may be able to spend more aggressively on product and service development, marketing, sales and other initiatives than we can. Many of these competitors also have:

These factors, among others, may enable our competitors to market their products and services at lower prices or on terms more advantageous to customers than we can offer. Competition may result in price reductions, reduced gross margins and loss of market share, any of which could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects. Additionally, our current and future competitors, including certain of our customers, may at any time develop additional products and services that compete with our products and new approaches by these competitors may make our products, technologies and methodologies obsolete or noncompetitive. We may not be able to compete effectively against these organizations.

In addition, to develop and market our new products, services, technologies and methodologies successfully, we must accurately assess and meet customers’ needs, make significant capital expenditures, optimize our development and manufacturing processes to predict and control costs, hire, train and retain the necessary personnel, increase customer awareness and acceptance of such services, provide high quality services in a timely manner, price our products and services competitively and effectively integrate customer feedback into our business planning. If we fail to create demand for our new products, services or technologies, our future business could be harmed.

Our research and development efforts for new products may be unsuccessful.

We incur research and development expenses to develop new products and technologies in an effort to maintain our competitive position in a market characterized by rapid rates of technological advancement. Our research and development efforts are subject to unanticipated delays, expenses and technical problems. There can be no assurance that any of these products or technologies will be successfully developed or that, if developed, will be commercially successful. In the event that we are unable to develop commercialized products from our research and development efforts or we are unable or unwilling to allocate amounts beyond our currently anticipated research and development investment, we could lose our entire investment in these new products and technologies. Any failure to translate research and development expenditures into successful new product introduction could have an adverse effect on our business.

In addition, research, development, and commercialization of our Therapeutic DNA Production Services are inherently risky. We cannot give any assurance that any future customers and/or collaborators of our Therapeutic DNA Production Services will receive regulatory approval for their pharmaceutical and biotherapeutic product candidates. In addition, we cannot give any assurance that any of our synthetic DNA performance characteristics will meet or exceed DNA produced by our competitors.

Risks Related to Our Intellectual Property:

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services and brand.

Our patents, trademarks, trade secrets, copyrights and all of our other intellectual property rights are important assets for us. There are events that are outside of our control that pose a threat to our intellectual property rights as well as to our products and services. For example, effective intellectual property protection may not be available in every country in which our products and services are distributed. The efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Protecting our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results. Although we seek to obtain patent protection for our innovations, it is possible we may not be able to protect all or some of these innovations. Given the costs of obtaining patent protection, we may choose not to protect certain innovations that later turn out to be important. There is always the possibility that the scope of the protection gained from one of our issued patents will be insufficient or deemed invalid or unenforceable. We also seek to maintain certain intellectual property as trade secrets. The secrecy could be developed independently, compromised by third parties, or disclosed, intentionally or accidentally, by our employees which would cause us to lose the competitive advantage resulting from these trade secrets.

Intellectual property litigation could harm our business, financial condition and results of operations.

Litigation regarding patents and other intellectual property rights is extensive in the drug and biotechnology industry. In the event of an intellectual property dispute, we may be forced to litigate. This litigation could involve proceedings instituted by the U.S. Patent and Trademark Office or the International Trade Commission, as well as proceedings brought directly by affected third parties. Intellectual property litigation can be extremely expensive, and these expenses, as well as the consequences should we not prevail, could seriously harm our business.

If a third party claims an intellectual property right to technology we use, we might need to discontinue an important product or product line, alter our products and processes, pay license fees or cease our affected business activities. Although we might under these circumstances attempt to obtain a license to this intellectual property, we may not be able to do so on favorable terms, or at all. Furthermore, a third party may claim that we are using inventions covered by the third party’s patent rights and may go to court to stop us from engaging in our normal operations and activities, including making or selling our products. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and technical personnel. A court may decide that we are infringing the third party’s patents and would order us to stop the activities covered by the patents. In addition, a court may order us to pay the other party damages for having violated the other party’s patents. The drug and biotechnology industry has produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our products or methods of use either do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid, and we may not be able to do this. Proving invalidity, in particular, is difficult since it requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

Because some patent applications in the United States may be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published until eighteen months after filing, and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our or our licensor’s issued patents or pending applications or that we or our licensors were the first to invent the technology. During the ordinary course of our business, we do not conduct “prior art” searches before filing a patent application. Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours. Any such patent application may have priority over our or our licensors’ patent applications and could further require us to obtain rights to issued patents covering such technologies. If another party has filed a United States patent application on inventions similar to ours, we may have to participate in an interference proceeding declared by the U.S. Patent and Trademark Office (“USPTO”) to determine priority

of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful, resulting in a loss of our United States patent position with respect to such inventions.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

Moreover, the scope, validity and enforceability of granted claims can be challenged in a variety of proceedings. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the relevant patent office, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, outside of the context of litigation per se. Such mechanisms include ex parte re-examination, inter partes review, post-grant review, derivation and pre- and post-grant opposition proceedings.

Furthermore, the courts have held that patent claims that recite laws of nature are not patent eligible, but patent claims that recite sufficient additional features that provide practical assurance that claimed processes are genuine inventive applications of those laws may be patent eligible. But what constitutes a “sufficient” additional feature is the subject of uncertainty. The USPTO has published and continues to revise and publish guidelines for patent examiners to apply when examining claims for patent eligibility as the case law continues to evolve. Patent eligibility is also an area of the law under continual development in other jurisdictions around the world.

In addition, U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.

Risks Related to Regulatory Approval of Our Customer and Collaborator’s Pharmaceutical and Biotherapeutic Product Candidates and Other Legal Compliance Matters:

Revenue from our Therapeutic DNA Production Services will be highly dependent on our collaborators’ and customers’ success in obtaining regulatory approval and commercializing their drug and/or biologic products.

The DNA produced via our Therapeutic DNA Production Services may be incorporated into our customers’ products in the drug and/or biologic markets that are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries. In the United States, to obtain approval from the FDA to market any future drug or biologic product that incorporates or utilizes our Therapeutic DNA Production Services, our collaborators or customers will be required to submit an NDA or BLA. The process of obtaining such regulatory approvals is expensive, often takes many years if approval is obtained at all, and can vary substantially based upon the type, complexity and novelty of the product candidate involved. Changes in the regulatory approval process during the development period, changes in or the enactment of additional statutes or regulations, or changes in the regulatory review process may cause delays in the approval or rejection of an application. There is no guarantee that our collaborators and customers will ever be successful in obtaining regulatory approval for any product that incorporates our products or technology. Even if regulatory approval is received, the manufacturing processes, post approval clinical data, labeling, advertising and promotional activities for any such product will be subject to continual requirements of and review by the FDA and other regulatory bodies. Our business may be materially harmed by our collaborators’ and customers’ inability to obtain or maintain regulatory approvals for their products of their failure to comply with applicable regulations.

In addition, we will be dependent on, and have no control over, consumer demand for the products into which our LineaDNA technology is incorporated. Consumer demand for our collaborators’ and customers’ products could be adversely affected by, among other things, delays in health regulatory approval, the loss of patent and other intellectual property rights protection, the emergence of competing products, including generic drugs or biosimilars, the degree to which private and government drug plans subsidize payment for a particular product and changes in the marketing strategies for such products. The healthcare industry has changed significantly over time, and we expect the industry to continue to evolve. Some of these changes may have a material adverse effect on our collaborators and customers and thus may have a material adverse effect on our business. If the products into which our LineaDNA is utilized or incorporated do not gain market acceptance, our revenues and profitability may be adversely affected.

The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time consuming, and inherently unpredictable. If our customers are ultimately unable to obtain regulatory approval for products incorporating our Therapeutic DNA Production Services, we will be unable to generate meaningful revenue and our business will be substantially harmed.

The time required to obtain approval by the FDA and comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials, and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application submitted by one of our customers. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our customers’ data are insufficient for approval and require additional preclinical, clinical or other studies. We have not submitted for, or plan to obtain regulatory approval for any product candidate, and it is possible that none of our, or our customers’ existing product candidates or any product candidates that we or our customers may seek to develop in the future that incorporate or utilize our Therapeutic DNA Production Services will ever obtain regulatory approval. Applications for our customers’ product candidates could fail to receive regulatory approval for a variety of reasons. This lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in failing to obtain regulatory approval to market any of such product candidates, which would significantly harm our business, results of operations, and prospects.

Even if our customers obtain regulatory approval for a product candidate, our Therapeutic DNA Production Services will remain subject to extensive regulatory scrutiny.

If any of our customers’ product candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities. Ongoing regulatory requirements include ensuring that quality control and manufacturing and production procedures conform to applicable cGMP regulations, and we will be subject to potential continual review and inspections to assess compliance with applicable cGMP regulations and adherence to commitments made in any regulatory filings. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance.

Any regulatory approvals that our customers receive for their products that incorporate or utilize our Therapeutic DNA Production Services will be subject to limitations on the approved indicated uses for which the product may be marketed and promoted or to the conditions of approval (including the requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) or contain requirements for potentially costly post-marketing testing. Any new legislation addressing drug or biologic safety issues could result in delays in product development or commercialization, or increased costs to assure manufacturing compliance. The FDA and other agencies, including the Department of Justice and state agencies, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. Promotional communications with respect to prescription drugs and biologics are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. The holder of an approved NDA must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling, or manufacturing process. We could also be asked to conduct post-marketing manufacturing changes to verify the safety and efficacy of our customers’ products in general. An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval and thereby affect the need for our manufacturing services.

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product, our customer or us, including, but not limited to, requiring withdrawal or recall of the product from the market, imposing civil or criminal penalties, and imposing restrictions on our or our customers’ ability to continue to manufacture the product(s). Any government investigation of alleged violations of law could require our customers or us to expend significant time and resources in response, and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our customers’ ability to commercialize and generate revenue from our customers’ products and demand for our synthetic DNA for their products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our Company and our operating results will be adversely affected related to the demand for those customers’ products.

In addition, the FDA’s regulations, policies or guidance may change and new or additional statutes or government regulations in the United States and other jurisdictions may be enacted that could further restrict or regulate our post-approval manufacturing activities. We cannot predict the likelihood, nature or extent of adverse government regulation that may arise from pending or future legislation or administrative action. If our customers or we are not able to achieve and maintain regulatory compliance, we may not be permitted to continue manufacturing synthetic DNA products for our customers’ products and/or product candidates, which would adversely affect our ability to generate revenue and achieve or maintain profitability.

If we fail to comply with laboratory licensing requirements, we could lose the ability to offer our clinical testing services or experience disruptions to our business.

CLIA is a federal law regulating clinical laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention, or treatment of disease. CLIA is intended to ensure the quality and reliability of clinical laboratories in the United States by mandating specific standards in the areas of personnel qualifications, administration, and participation in proficiency testing, patient test management, quality control, quality assurance and inspections. Clinical laboratories must be certified under CLIA in order to perform testing on human specimens, unless they fall within an exception to CLIA certification, such as research laboratories that test human specimens but do not report patient-specific results for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of individual patients. CLIA certification is also required to be eligible to bill Federal and State healthcare programs, as well as many private third-party payers, for diagnostic testing and services.

Our employees, independent contractors, consultants, commercial partners, customers and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

We are exposed to the risk of fraud, misconduct or other illegal activity by our employees, independent contractors, consultants, commercial partners, customers and vendors. Misconduct by these parties could include intentional, reckless and negligent conduct that fails to: comply with applicable laws and regulations of the FDA and other comparable foreign regulatory authorities; provide true, complete and accurate information to the FDA and other comparable foreign regulatory authorities; comply with manufacturing standards we have established; comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities to us.

If our customers obtain FDA approval of any of their products and begin commercializing those products in the United States, our potential exposure under such laws may increase significantly, and our costs associated with compliance with such laws as a result of our relationship with our customers may also increase. We have adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct by employees and third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

If we fail to comply with healthcare laws, we could face substantial penalties and our business, operations and financial conditions could be adversely affected.

Healthcare providers, physicians and payors play a primary role in the recommendation and prescription of any product candidates for which our customers may obtain marketing approval. Restrictions under applicable federal, state and foreign healthcare laws and regulations may affect our ability to operate and expose us to areas of risk, including activities that potentially harm consumers and analogous state and foreign laws and regulations.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could, despite our efforts to comply, be subject to challenge under one or more of such laws. Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable healthcare laws and regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. In addition, the approval and commercialization of any of our customers’ product candidates

outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

Risks Related to Personnel:

Our failure to manage our growth in operations and acquisitions of new product lines and new businesses could harm our business.

The forecasted change in our strategic focus could place a significant strain on our current management resources. We have a limited number of personnel and expect to continue to have a limited number of personnel for the foreseeable future.

To manage such growth, we may need to improve our:

If we are unable to continue to retain the services of Dr. Hayward, we may not be able to continue our operations.

Our success depends to a significant extent upon the continued service of Dr. James A. Hayward, our CEO. On July 28, 2016, we entered into an employment agreement with Dr. Hayward. The initial term was from July 1, 2016 through June 30, 2017, with automatic one-year renewal periods. As of June 30, 2024, the employment contract automatically renewed for an additional year. Loss of the services of Dr. Hayward could significantly harm our business, results of operations and financial condition. We do not maintain key-person insurance on the life of Dr. Hayward.

We may have conflicts of interest with our affiliates and related parties, and in the past we have engaged in transactions and entered into agreements with affiliates that were not negotiated at arms’ length.

We have engaged, and may in the future engage, in transactions with affiliates and other related parties. These transactions may not have been, and may not be, on terms as favorable to us as they could have been if obtained from non-affiliated persons. While an effort has been made, and will continue to be made, to enter into transactions with affiliated persons and other related parties at rates and on terms as favorable as would be charged by others, there will always be an inherent conflict of interest between our interests and those of our affiliates and related parties. The Company may be adversely impacted if any related party agreement or transaction is made on unfavorable terms.

Risks Relating to Our Common Stock and Other Securities:

There are a large number of shares of Common Stock underlying our outstanding options and warrants and the sale of these shares may depress the market price of our Common Stock and cause immediate and substantial dilution to our existing stockholders.

As of December 13, 2024, we had 52,294,359 shares of Common Stock issued and outstanding, outstanding options to purchase 108,176 shares of Common Stock, outstanding warrants to purchase 136,325,980 shares of Common Stock, and 269,069 shares available for grant under our 2005 and 2020 Equity Incentive Plans. The issuance of shares upon exercise of our outstanding options and warrants will cause immediate and substantial dilution to our stockholders and any sale thereof may depress the market price of our common stock.

Stockholders may suffer substantial dilution if certain provisions in the May 2024 Series Warrants are utilized.

On May 29, 2024 we closed on such date a public offering (the “May 2024 Offering”) of Common Stock and warrants, including 9,230,769 series A common stock purchase warrants (“May 2024 Series A Warrants”) and 9,230,769 series B common stock purchase warrants (“May 2024 Series B Warrants”, and, with the May 2024 Series A Warrants, the “May 2024 Series Warrants”), with Craig-Hallum Capital Group LLC (“Craig-Hallum”) and Laidlaw & Company (UK) Ltd. (“Laidlaw”) as placement agents. As part of the May

2024 Offering, the Company entered into a Placement Agency Agreement, dated May 28, 2024, with Craig-Hallum and Laidlaw (the “May 2024 Placement Agency Agreement”).

If the May 2024 Series B Warrants are exercised by way of an alternative cashless exercise, such exercising holder will receive three times the number of shares of Common Stock they would receive in a cash exercise for each May 2024 Series B Warrant they exercise, without any cash payment to us. In addition, the May 2024 Series A Warrants and May 2024 Series B Warrants each include a provision that resets their exercise price in the event of a reverse split of our Common Stock, to a price equal to the lesser of (i) the then exercise price and (ii) lowest volume weighted average price (VWAP) during the period commencing five trading days immediately preceding and the five trading days commencing on the date we effect a reverse stock split in the future with a proportionate adjustment to the number of shares underlying the applicable warrant.

In addition, subject to certain exemptions, the May 2024 Series A Warrants provide for an adjustment to the exercise price and number of shares underlying the May 2024 Series A Warrants if we sell, enter into an agreement to sell, or grant any option to purchase, or sell, enter into an agreement to sell, or grant any right to reprice (excluding Exempt Issuances, as defined in the May 2024 Placement Agency Agreement), or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock, at an effective price per share less than the exercise price of the May 2024 Series A Warrants then in effect (the “Price Reset Mechanism”).

On October 30, 2024, the Company and certain holders of the May 2024 Series A Warrants entered into an amendment to such holders’ May 2024 Series A Warrants (the “Warrant Amendment”), pursuant to which the Price Reset Mechanism became subject to a floor equal to $0.20.

The Price Reset Mechanism of the May 2024 Series A Warrants, when triggered, would reduce the exercise price of the May 2024 Series A Warrants to the lower of the price per share of the Common Stock issued or (i) $0.20 with respect to the May 2024 Series A Warrants as amended by the Warrant Amendment or (ii) the lowest volume weighted average price (VWAP) during the five consecutive trading days immediately following such dilutive issuance or announcement thereof with respect to the remaining May 2024 Series A Warrants not amended by the Warrant Amendment. The number of shares issuable upon exercise after the Price Reset Mechanism has been triggered will be proportionately adjusted such that the aggregate exercise price will remain unchanged.

In connection with the October 2024 Offering (as described below), the Price Reset Mechanism in the May 2024 Series A Warrants was triggered, which resulted in the number of shares of Common Stock issuable upon exercise of the May 2024 Series A Warrants increasing from 9,230,769 to 91,890,698. The exercise price of the May 2024 Series A Warrants was adjusted from $1.99 per share to $0.20 per share with respect to the May 2024 Series A Warrants amended by the Warrant Amendment, and to $0.19 with respect to the May 2024 Series A Warrants not amended by the Warrant Amendment.

If any of the above provisions in the May 2024 Series Warrants are further utilized, our stockholders may suffer substantial dilution.

Stockholders may suffer substantial dilution if certain provisions in the October 2024 Series D Warrants are utilized.

On October 30, 2024, we entered into a securities purchase agreement (the “October 2024 Purchase Agreement”) with certain institutional investors (each, an “October 2024 Purchaser” and, collectively, the “October 2024 Purchasers”), pursuant to which the Company agreed to issue and sell, (i) in a registered direct public offering (the “October 2024 Registered Direct Offering”) of 19,247,498 shares of the Company’s Common Stock and pre-funded warrants (“October 2024 Pre-Funded Warrants”) to purchase up to 1,065,002 shares of Common Stock, and (ii) in a concurrent private placement (the “October 2024 Private Placement”, and together with the October 2024 Registered Direct Offering the “October 2024 Offering”), unregistered Series C Common Stock Purchase Warrants (“October 2024 Series C Warrants”) to purchase up to 20,312,500 shares of Common Stock and unregistered Series D Common Stock Purchase Warrants (“October 2024 Series D Warrants”, and together with the October 2024 Series C Warrants, the “October 2024 Series Warrants”) to purchase up to 20,312,500 shares of Common Stock. Craig-Hallum acted as placement agent in connection with the October 2024 Offering. The Company also agreed to issue to Craig-Hallum, or its respective designees, Placement Agent Warrants (“October 2024 Placement Agent Warrants”, and, with the October 2024 Series Warrants, the “October 2024 Private Placement Warrants”) to purchase up to 1,015,625 shares of Common Stock.

If the October 2024 Series D Warrants are exercised by way of an alternative cashless exercise, assuming receipt of Warrant Stockholder Approval (as defined below), such exercising holder will receive one share of Common Stock for each share of Common Stock they would receive in a cash exercise for each October 2024 Series D Warrant they exercise, without any cash payment to us.

In addition, the October 2024 Series D Warrants include a provision that resets their exercise price in the event of a reverse split of our Common Stock, to a price equal to the lesser of (i) the then exercise price and (ii) lowest volume weighted average price (VWAP) during the period commencing five trading days immediately preceding and the five trading days commencing on the date we effect a reverse stock split in the future with a proportionate adjustment to the number of shares underlying the October 2024 Series D Warrants, subject to a floor of $0.0634.

If any of the above provisions in the October 2024 Series D Warrants are utilized, our stockholders may suffer substantial dilution.

The exercisability of the October 2024 Private Placement Warrants is contingent upon us obtaining Warrant Stockholder Approval. If we do not obtain such Warrant Stockholder Approval, the October 2024 Private Placement Warrants may never become exercisable.

The exercisability of the October 2024 Private Placement Warrants will be available only upon receipt of such stockholder approval (the “Warrant Stockholder Approval”) as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC. Each October 2024 Series C Warrant has an exercise price of $0.32 per share of Common Stock, will become exercisable upon the first trading day (the “Stockholder Approval Date”) following the Company’s notice to warrantholders of Warrant Stockholder Approval, and will expire on the five-year anniversary of the Stockholder Approval Date. Each October 2024 Series D Warrant has an exercise price of $0.32 per share of Common Stock, will become exercisable upon the Stockholder Approval Date, and will expire on the 18-month anniversary of the Stockholder Approval Date. Each October 2024 Placement Agent warrant has an exercise price of $0.32, will become exercisable upon the Stockholder Approval date and will expire on October 30, 2029.

While we intend to promptly seek Warrant Stockholder Approval for these mechanisms, there is no guarantee that it will ever be obtained. In the event that we cannot obtain Warrant Stockholder Approval, the October 2024 Private Placement Warrants may never become exercisable and may have no value.

We have agreed to hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practicable date after the date hereof, but in no event later than ninety days after the closing of the offering, in order to obtain Warrant Stockholder Approval. There is no guarantee we will be able to hold a special meeting within this timeframe, or at all. If we do not obtain Warrant Stockholder Approval at the first meeting, we are obligated to call a meeting every ninety days thereafter to seek Warrant Stockholder Approval until the earlier of the date on which Stockholder Approval is obtained or the October 2024 Series Warrants are no longer outstanding.

We may be required to repurchase certain of our warrants.

Under certain of our warrants sold privately that have registration rights, in the event of a “Fundamental Transaction” (as defined in the related warrant agreement, which generally includes any merger with another entity, the sale, transfer or other disposition of all or substantially all of our assets to another entity, or the acquisition by a person of more than 50% of our Common Stock), each warrant holder will have the right at any time prior to the consummation of the Fundamental Transaction to require us to repurchase the warrant for a purchase price in cash equal to the Black Scholes value (as calculated under the warrant agreement) of the then remaining unexercised portion of such warrant on the date of such Fundamental Transaction, which may materially adversely affect our financial condition and/or results of operations and may prevent or deter a third party from acquiring us.

We have received written notice from Nasdaq that we are not in compliance with Nasdaq’s minimum bid price requirements and if we are unable to regain compliance with Nasdaq continued listing standards, which may require effecting a reverse stock split of our Common Stock, we could be delisted from The Nasdaq Stock Market, which would negatively impact our business, our ability to raise capital, and the market price and liquidity of our Common Stock.

The Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”) requires that the Company’s Common Stock maintain a closing bid price for 30 consecutive business days of $1.00 per share. On November 12, 2024, the Company received a letter (the “Notice”) from Nasdaq notifying the Company that, because the closing bid price for its Common Stock has been below $1.00 per share for 30 consecutive business days, it no longer complies with the Minimum Bid Price Requirement for continued listing on The Nasdaq Capital Market. There is no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement. The Notice had no immediate effect on the listing of the Company’s Common Stock on The Nasdaq Capital Market. The Company has been provided an initial compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. During the compliance period, the Company’s shares of Common Stock will continue to be listed and traded on

The Nasdaq Capital Market. To regain compliance, the closing bid price of the Company’s Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during the 180-day compliance period, with a longer period potentially required by the staff of Nasdaq (the “Staff”). The Company intends to actively monitor the bid price for its Common Stock and will consider available options, including effecting a reverse stock split, to regain compliance with the Minimum Bid Price Requirement.

If our Common Stock is delisted by Nasdaq, our Common Stock may be eligible for quotation on an over-the-counter quotation system or on the pink sheets but will lack the market efficiencies associated with Nasdaq. Upon any such delisting, our Common Stock would become subject to the regulations of the SEC relating to the market for penny stocks. A penny stock is any equity security not traded on a national securities exchange that has a market price of less than $5.00 per share. The regulations applicable to penny stocks may severely affect the market liquidity for our Common Stock and could limit the ability of stockholders to sell securities in the secondary market. In such a case, an investor may find it more difficult to dispose of or obtain accurate quotations as to the market value of our Common Stock, and there can be no assurance that our Common Stock will be eligible for trading or quotation on any alternative exchanges or markets.

Delisting from Nasdaq could adversely affect our ability to raise additional financing through public or private sales of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our Common Stock. Delisting could also have other negative results, including the potential loss of confidence by employees and customers, the loss of institutional investor interest and fewer business development opportunities.

Pursuant to the October 2024 Purchase Agreement, the Company is required to effect a reverse stock split of its outstanding shares of Common Stock if, at any time after the Stockholder Approval Date, it is not in compliance with Nasdaq’s Bid Price Rule and has received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (the “Reverse Stock Split”). The Company must effect the Reverse Stock Split within 30 days of the Stockholder Approval Date; provided that if within such 30 day period the Company regains compliance with the Minimum Bid Price Requirement, the Company shall have no obligation to effect the Reverse Stock Split. The Company intends to implement a reverse stock split of its outstanding securities to regain compliance with the Bid Price Rule and to comply with the provisions of the October 2024 Purchase Agreement.

ITEM 1B.UNRESOLVED STAFF COMMENTS.

None.

ITEM 1CCYBERSECURITY

Applied DNA Sciences operates in the biotechnology sector, which is subject to various cybersecurity risks that could adversely affect our business, financial condition, and results of operations, including intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy laws and other litigation and legal risk; and reputational risk. We have implemented a risk-based approach to identify and assess the cybersecurity threats that could affect our business and information systems. Our cybersecurity program is aligned with industry standards and best practices, such as the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. We conduct periodic risk assessments using various tools and methodologies to identify and manage the potential impact and likelihood of various cyber scenarios, including those involving third-party service providers, and to determine the appropriate mitigation strategies and controls. We also monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests, and threat intelligence feeds. We require third-party service providers with access to personal, confidential or proprietary information to implement and maintain comprehensive cybersecurity practices consistent with applicable legal standards and industry best practices.

Our business depends on the availability, reliability, and security of our information systems, networks, data, and intellectual property. Any disruption, compromise, or breach of our systems or data due to a cybersecurity threat or incident could adversely affect our operations, customer service, product development, and competitive position. They may also result in a breach of our contractual obligations or legal duties to protect the privacy and confidentiality of our stakeholders. Such a breach could expose us to business interruption, lost revenue, ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to our vendor relationships, or loss of market share.

Our Chief Information Officer (“CIO”) conducts the regular assessment and management of material risks from cybersecurity threats, including review with our IT team and third party providers. All employees and consultants are directed to report to senior management

with any irregular or suspicious activity that could indicate a cybersecurity threat or incident. The Audit Committee of our Board of Directors evaluates our cybersecurity assessment and management policies, including quarterly interviews with our senior officers and independent registered accounting firm.

ITEM 2.PROPERTIES.

Our corporate headquarters is located at the Long Island High Technology Incubator (“LIHTI”), which is located on the campus of Stony Brook University at 50 Health Sciences Drive, Stony Brook, NY 11790. The lease is for a 30,000 square foot building. We entered into an amended lease agreement on February 1, 2023. The initial term is for three years and expires on February 1, 2026. The lease for the corporate headquarters requires monthly payments of $48,861, which is adjusted annually based on the US Consumer Price Index (“CPI”). In lieu of a security deposit, the Company provided a standby letter of credit of $750,000. In addition, the Company also has 2,500 square feet of laboratory space, which it entered into an amended lease agreement on February 1, 2023. The initial lease term for the laboratory space is one year from the commencement date and has been extended through January 31, 2025. The lease requires monthly payments of $10,417. The Company also had a satellite testing facility in Ahmedabad, India, which occupied 1,108 square feet for a three-year term beginning November 1, 2017. During August 2023, the Company renewed this lease with a new expiration date of July 31, 2024. As of June 30, 2024 the Company has ceased operations of its testing facility in India. The Company vacated the lease on August 31, 2024. The base rent was approximately $6,500 per annum. The laboratory lease, as well as the testing facility in Ahmedabad were both considered short-term lease obligations.

ITEM 3.LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

ITEM 4.MINE SAFETY DISCLOSURES.

Not applicable.

PART II

ITEM 5.MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our Common Stock is listed on The Nasdaq Capital Market under the symbol “APDN”. There is no certainty that the Common Stock will continue to be listed on Nasdaq or that any liquidity will exist for our stockholders.

Holders

As of December 13, 2024, we had 375 holders of record of our Common Stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of Common Stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. The transfer agent of our common stock is Equiniti Trust Company, LLC, 90 Park Avenue, New York, NY 10016.

Dividends

We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.

ITEM 6.RESERVED.

​

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion and analysis includes certain forward-looking statements that involve risks, uncertainties and assumptions. You should review the Risk Factors section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by such forward-looking statements. See “Forward-Looking Information” at the beginning of this Form 10-K.

Introduction

We are a biotechnology company developing and commercializing technologies to produce and detect DNA and RNA. Using PCR to enable the production and detection of DNA and RNA, we currently operate in three primary business markets: (i) the enzymatic manufacture of synthetic DNA for use in the production of nucleic acid-based therapeutics (including biologics and drugs), as well as the development and sale of a proprietary RNA polymerase RNAP for use in the our Therapeutic DNA Production Services; (ii) the detection of DNA and RNA in our MDx Testing Services; and (iii) the manufacture and detection of DNA for our DNA Tagging and Security Products and Services.

Our current growth strategy is to primarily focus our resources on the further development, commercialization, and customer adoption of our Therapeutic DNA Production Services, including the expansion of our CDMO for the manufacture of synthetic DNA and associated enzymes for use in the production of nucleic acid-based therapies.

We will continue to update our business strategy and monitor the use of our resources regarding our various business segments. The Company’s management is currently engaged in a strategic review of the Company’s business segments that may result in the closure or divestiture of the Company’s DNA Tagging and Security Products and Services and/or MDx Testing Services, as well as workforce reductions and potential management changes. To this end, on December 17, 2024, the Company announced it is exploring the potential divestiture of its DNA Tagging and Security Products and Services business segment. No assurance can be given that a divestiture will be completed. Further, the definitive terms and structure of any possible closure or divestiture have not been determined or approved by the Company’s Board of Directors. Although the purpose of any closure or divestiture would be to reduce the Company’s expenses and effectuate cost savings, it is possible that there may be related restructuring costs. We expect that based on available opportunities and our beliefs regarding future opportunities, we will continue to modify and refine our business strategy.

Industry Background and Markets

Therapeutic DNA Production Services

Through LRx, our 98% owned subsidiary we are developing and commercializing our LineaDNA and Linea IVT platforms for the manufacture of synthetic DNA and associated enzymes for use in the production of nucleic acid-based therapeutics.

LineaDNA Platform

Our LineaDNA platform is our core enabling technology, and enables the rapid, efficient, and large-scale cell-free manufacture of high-fidelity DNA sequences for use in the manufacturing of a broad range of nucleic acid-based therapeutics. The LineaDNA platform enzymatically produces a linear form of DNA we call “LineaDNA” that is an alternative to plasmid-based DNA manufacturing technologies that have supplied the DNA used in biotherapeutics for the past 40 years.

As of the third quarter of calendar year 2024, there were 4,099 gene, cell and RNA therapies in development from preclinical through pre-registration stages, almost all of which use DNA in their manufacturing process. (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q3 2024 Quarterly Report ). Due to what we believe are the LineaDNA platform’s numerous advantages over legacy nucleic acid-based therapeutic manufacturing platforms, we believe this large number of therapies under development represents a substantial market opportunity for the LineaDNA platform to supplant legacy manufacturing methods in the manufacture of nucleic acid-based therapies although no assurance can be given that we will be successful in exploiting this market opportunity.

We believe our LineaDNA platform holds several important advantages over existing cell-based plasmid DNA manufacturing platforms. Plasmid-based DNA manufacturing is based on the complex, costly and time-consuming biological process of amplifying DNA in living bacterial cells. Once amplified, the DNA must be separated from the living cells and other process contaminants via multiple rounds of purification, adding further complexity, costs and regulatory burdens. Unlike plasmid-based DNA manufacturing, the LineaDNA platform does not require living cells and instead amplifies DNA via the enzymatic process of PCR. The LineaDNA platform is simple and can rapidly produce very large quantities of DNA utilizing a cell-free process without the need for complex purification steps.

We believe the key advantages of the LineaDNA platform include:

Preclinical studies conducted by the Company have shown that LineaDNA is substitutable for plasmid DNA in numerous nucleic acid-based therapies, including:

Further, we believe that LineaDNA is also substitutable for plasmid DNA in the following nucleic acid-based therapies:

Linea IVT Platform

The number of mRNA therapies under development is growing at a rapid rate, thanks in part to the success of the mRNA COVID-19 vaccines. mRNA therapeutics are produced via a process called IVT that requires DNA as a starting material. As of the third quarter of calendar 2024, there were over 450 mRNA therapies under development, with the majority of these therapies (67%) in the preclinical stage (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q3 2024 Quarterly Report). The Company believes that the mRNA market is in a nascent stage that represents a large growth opportunity for the Company via the production and supply of DNA critical starting materials and RNAP to produce mRNA therapies.

In August 2022, the Company launched DNA IVT templates manufactured via its LineaDNA platform that have resulted in evaluations of the Company’s IVT templates by numerous therapeutic developers and CDMOs in the United States, Europe and the Asia-Pacific. In addition, the Company’s IVT templates are currently under late-stage evaluations by two therapeutic developers and one CDMO for use as DNA templates to produce mRNA intended for clinical use in calendar year 2025. However there can be no assurance that related contracts will be entered into. In response to this demand, the continued growth of the mRNA therapeutic market, and the unique abilities of the LineaDNA platform, the Company acquired Spindle in July 2023 to potentially increase its mRNA-related TAM to include the manufacture and sale of RNAP for use in conjunction with our LineaDNA IVT templates.

Through our acquisition of Spindle, we launched our Linea IVT platform in July 2023, which combines Spindle’s proprietary high-performance RNAP, now marketed by the Company as Linea RNAP, with our enzymatically produced LineaDNA IVT templates. We believe the Linea IVT platform enables our customers to make better mRNA, faster. Based on data generated by the Company and its collaborators, we believe the integrated Linea IVT platform offers the following advantages over conventional mRNA production to therapy developers and manufacturers:

According to the Company’s internal modeling, the ability to sell both LineaDNA IVT templates and Linea RNAP under the Linea IVT platform potentially increases the Company’s mRNA-related TAM by approximately 3-5x as compared to selling LineaDNA IVT templates alone, while also providing a more competitive offering to the mRNA manufacturing market. Currently, Linea RNAP is produced for the Company under an ISO 13485 quality system by Alphazyme, LLC a third-party CDMO located in the United States, which the Company believes is sufficient for early-stage clinical use of the enzyme. In conjunction with Alphazyme, the Company recently completed manufacturing process development work on its Linea RNAP to increase the production scale of the enzyme and reduce unit costs.

Manufacturing Scale-up

The Company plans to offer several quality grades of Linea DNA, each of which will have different permitted uses.

(1) Dependent on the availability of future financing.

We are currently manufacturing LineaDNA pursuant to GLP and, are in the final stages of creating GMP Site 1, a fit for purpose manufacturing facility within our current Stony Brook, NY laboratory space capable of producing LineaDNA IVT templates under GMP suitable for use as a critical starting material for clinical and commercial mRNA therapeutics, with an anticipated completion date in January 2025. We also plan to offer additional capacity for LineaDNA IVT templates as well as capacity for LineaDNA materials

manufactured under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product at GMP Site 2, with availability expected during the first half of calendar year 2026, dependent upon the availability of future funding and customer demand. GMP is a quality standard used globally and by the FDA to ensure pharmaceutical quality. Drug substances are the pharmaceutically active components of drug products.

Segment Business Strategy

Our business strategy for our Therapeutic DNA Production Services is to capitalize upon the rapid growth of mRNA therapies in the near term via our planned near term future availability of LineaDNA IVT templates manufactured under GMP at our GMP Site 1, while at the same time laying the basis for additional clinical and commercial applications of LineaDNA with our future planned availability of LineaDNA manufactured under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product at planned GMP Site 2. Planned GMP Site 2 may also be used for additional LineaDNA IVT template manufacturing if customer demand exceeds the capacity of GMP Site 1. In addition, we believe GMP Site 1 is capable of manufacturing LineaDNA for use as, or incorporation, into a biologic, drug substance, and/or drug product manufacturing via facility upgrades to its existing footprint.

Our current plan is: (i) through our Linea IVT platform and planned near term future GMP manufacturing capabilities for IVT templates at GMP Site 1 to secure commercial-scale supply contracts with clinical and commercial mRNA and/or sa- RNA manufacturers for LineaDNA IVT templates and/or Linea RNAP as critical starting materials; (ii) to utilize our current GLP production capacity for non-IVT template applications to secure supply and/or development contracts with pre-clinical therapy developers that use DNA in their therapy manufacturing, and (iii) upon our development of our planned future LineaDNA production under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product at our planned GMP Site 2, and/or our upgrade to GMP Site 1, to convert existing and new LineaDNA customers into large-scale supply contracts to supply LineaDNA for clinical and commercial use as, or incorporation into, a biologic, drug substance and/or drug product in a wide range of nucleic acid therapies. In addition, the Company plans to utilize its planned DNA manufacturing capabilities in GMP Site 1 and/or GMP Site 2 to convert new and existing LineaDNA IVT template customers to LineaIVT platform customers to increase the Company’s mRNA-related TAM.

Until we complete our GMP Site 1 to produce DNA critical starting materials (DNA IVT templates) for mRNA manufacturing, we will not be able to realize significant revenues from this business. We estimate the remaining CAPEX costs to creating GMP Site 1 will be less than $0.30 million. If we were to expand our facilities to enable GMP production of LineaDNA for use as, or incorporation, into a biologic, drug substance and/or drug product as planned for GMP Site 2, the additional CAPEX may be up to approximately $10 million which would require additional funding. We anticipate upgrades to GMP Site 1 to enable the manufacture of LineaDNA for use as, or incorporation, into a biologic, drug substance and/or drug product manufacture to be less than $1 million. We are currently building GMP Site 1 within our existing laboratory space. We anticipate that a GMP Site 2 would require us to acquire additional space.

MDx Testing Services

Through ADCL, our clinical laboratory subsidiary, we leverage our expertise in DNA and RNA detection via PCR to provide and develop MDx Testing Services. ADCL is a NYSDOH CLIA-certified laboratory which is currently permitted for virology and genetics (molecular). In providing MDx Testing Services, ADCL employs its own or third-party molecular diagnostic tests.

We have successfully internally validated our PGx Testing Services. Our PGx Testing Services utilizes a 120-target PGx panel test to evaluate the unique genotype of a specific patient to help guide the patient’s healthcare provider in making individual drug therapy decisions. Our PGx Testing Services are designed to interrogate DNA targets on over 33 genes and provide genotyping information relevant to certain cardiac, mental health, oncology, and pain management drug therapies.

On June 12, 2024 we received full approval from NYSDOH for our PGx Testing Services. Recently published studies show that population-scale PGx enabled medication management can significantly reduce overall population healthcare costs, reduce adverse drug events, and increase overall population wellbeing. These benefits can result in significant cost savings to large entities and self-insured employers, the latter accounting for approximately 65% of all U.S. employers in 2022.We plan to leverage our PGx Testing Services to provide PGx testing services to large entities, self-insured employers and healthcare providers, as well as concierge healthcare providers.

On September 11, 2024, we announced that ADCL launched an expansion of its clinical testing services for the detection of Mpox (formerly monkeypox) to include testing for both Mpox Clade I and Clade II. The launch of the expanded Mpox testing service comes after ADCL’s interaction with relevant regulatory bodies, including the NYSDOH and the FDA. The Company believes that ADCL will

be able to support New York and other states’ response to the threat of Mpox. ADCL’s Linea Mpox Virus 1.0 Assay was previously approved as a laboratory-developed test for the detection of Mpox Clade II by NYSDOH in September 2022. In August 2024, ADCL conducted additional validation testing showing the Assay can also detect the genetic sequence of Mpox Clade I, which is the subject of the WHO;s August 14, 2024 declaration of a public health emergency of international concern. ADCL will provide the testing service from its CLEP/CLIA molecular diagnostics laboratory in Stony Brook, N.Y. Currently, Mpox instances in the United States are very low and the future path of Mpox is currently unknown. Accordingly, there can be no assurance that we will be able to generate revenue and profits from Mpox testing.

DNA Tagging and Security Products and Services

By leveraging our expertise in both the manufacture and detection of DNA via PCR, our DNA Tagging and Security Products and Services allow our customers to use non-biologic DNA tags manufactured on our LineaDNA platform to mark objects in a unique manner and then identify these objects by detecting the absence or presence of the DNA tag. The Company’s core DNA Tagging and Security Products and Services, which are marketed collectively as a platform under the trademark CertainT®, include:

To date, our largest commercial application for our DNA Tagging and Security Products and Services is in the tracking and provenance authentication of cotton.

The UFLPA signed into law on December 23, 2021 establishes that any goods mined, produced, or manufactured wholly or in part in the XUAR of the People’s Republic of China are not entitled to entry to the United States. On June 17, 2022, the UFLPA additionally listed DNA tagging and isotopic analysis as evidence that importers may use to potentially prove that a good did not originate in XUAR. In July of 2024, the Company announced a multi-year commercialization agreement for its CertainT platform with Indus Group, a multinational apparel/textile manufacturing and sourcing company.

Our current business plan is to leverage consumer and governmental awareness for product traceability to expand our existing partnerships and seek new partnerships for our DNA Tagging and Security Products and Services with a focus on cotto, though this business plan could change based on the outcome of the Company’s strategic review of its business segments.

On December 17, 2024, the Company announced it is exploring the potential divestiture of its DNA Tagging and Security Products and Services business segment. No assurance can be given that a divestiture will be completed.

General

Historically, a substantial portion of our revenues has been generated from our safeCircle COVID-19 testing solutions, for which testing demand has significantly dropped. While we continue to support several safeCircle customers, we are currently observing a marked decrease in market demand for COVID-19 testing, resulting in significantly reduced revenues. We expect future demand for COVID-19 testing to continue to be reduced. We expect future growth in revenues to be derived from our Therapeutic DNA Production Services and our MDx testing services, as the latter transitions to a focus on genetic testing. We have continued to incur expenses in expanding our business to meet current and anticipated future demand. We have limited sources of liquidity. We will continue to update our business strategy and monitor the use of our resources regarding our various business markets. In addition, we expect that based on available opportunities and our beliefs regarding future opportunities, we will continue to modify and refine our business strategy, which

may result in the divestiture or closure of the Company’s MDx Testing Services and/or DNA Tagging and Security Products and Services segments, as well as workforce reductions and potential management changes.

Comparison of the Fiscal Year Ended September 30, 2024 to the Fiscal Year Ended September 30, 2023

Revenues

Product revenues

For the fiscal year ended September 30, 2024 and 2023, we generated $1,074,813 and $1,218,185 in revenues from product sales, respectively. Product revenue decreased by $143,372 or 12% for the fiscal year ended September 30, 2024 as compared to the prior fiscal year. The decrease in product revenues was primarily due to a decrease within our DNA Tagging and Security Products and Services segment due to a decline in revenue from our consumer asset marking and textile customers of approximately $113,000 and $75,000, respectively. These decreases were offset by an increase in shipments of approximately $49,000 to a nutraceutical customer.

Service revenues

For the fiscal year ended September 30, 2024 and 2023, we generated $1,038,677 and $996,866 in service revenues, respectively. Service revenue increased by $41,811 or 4% for the fiscal year ended September 30, 2024 as compared to the prior fiscal year. The increase in service revenues is primarily related to a $213,000 increase within our DNA Tagging and Security Products and Services segment due to an increase in our textile isotopic testing services. This increase was offset by a $171,000 decrease within our Therapeutic DNA Production Services segment due to decreased research and development projects.

Clinical laboratory service revenues

For the fiscal year ended September 30, 2024 and 2023, we generated $1,317,930 and $11,152,392 in revenues from clinical laboratory testing services, respectively. Clinical laboratory service revenue decreased by $9,834,462 or 88% for the fiscal year ended September 30, 2024 as compared to the prior fiscal year. The decrease in revenue is primarily due to a decrease from COVID-19 testing services. The fiscal year ended September 30, 2023 included testing revenues under our contract with CUNY, which terminated during June 2023.

Costs and Expenses

Gross Profit

Gross profit for fiscal year ended September 30, 2024 decreased by $4,516,553 or 82% from $5,533,432 for the fiscal year ended September 30, 2023 to $1,016,879 for the fiscal year ended September 30,2024. The gross profit percentage was 30% and 41% for the fiscal years ended September 30, 2024 and 2023, respectively. The decrease in gross profit percentage was primarily the result of a decline in gross profit percentage for our MDx Testing Services segment specifically related to significantly decreased testing volumes year over year.

Selling, General and Administrative

Selling, general and administrative expenses for the fiscal year ended September 30, 2024 decreased by $1,303,750 or 10% to $11,447,894 from $12,751,644 in the fiscal year ended September 30, 2023. The decrease is attributable to a decrease in payroll of approximately $1,527,000 primarily related to officer bonuses paid and accrued during fiscal 2023 as compared to no bonuses paid during fiscal 2024 and the bonus accrual was reversed. The remainder of the decrease is attributable to a decrease in stock-based compensation expense of approximately $462,000 relating to the timing of the annual grants of options to non-employee members of the board of directors and restricted stock units issued to officers. These decreases were offset by an increase in professional fees pertaining to an increase in legal and accounting expenses of $700,000 relating to the Spindle acquisition and legal and accounting fees pertaining to regulatory compliance.

Research and Development

Research and development expenses for the fiscal year ended September 30, 2024 decreased by $141,328 or 4% to $3,593,750 from $3,735,078 in the fiscal year ended September 30, 2023. This decrease is primarily due to a decrease in depreciation expense of $524,000 for laboratory equipment becoming fully depreciated year over year, offset by an increase of $217,000 for consultants being utilized to further develop the technology acquired from the Spindle acquisition and $156,000 of research and development costs related to our continued development projects within our Therapeutic DNA production segment during the fiscal year ended September 30, 2024.

Interest income

Interest income for the fiscal year ended September 30, 2024, increased to $176,301 from $75,332 in the same period of 2023. This increase relates to higher average cash balances in our interest-bearing accounts, coupled with increased interest rates.

Other (expense) income, net

Other (expense) income, net for the fiscal year ended September 30, 2024 and 2023, was expense of $8,877 and income of $642, respectively.

Transaction cost allocated to warrant liabilities

Transaction cost allocated to warrant liabilities for the fiscal year ended September 30, 2024 was $633,198. These transaction costs represent the closing costs from the February 2024 financing transaction. These costs were expensed as it would have resulted in negative additional paid in capital.

Unrealized gain on change in fair value of the warrants classified as a liability

Unrealized gain on change in fair value of warrants classified as a liability for the fiscal year ended September 30, 2024 and 2023 of $9,430,000 and $854,400, respectively, relates to the change in fair value of the warrants that are classified as a liability. The primary driver of the change is the decrease in our stock price, as well as certain warrants expiring during September 2023.

Unrealized loss on change in fair value of warrants classified as a liability-warrant modifications

Unrealized loss on change in fair value of warrants classified as a liability-warrant modifications of $394,000 for the fiscal year ended September 30, 2024 represents the change in fair value for the modifications made to certain warrants as a result of the February 2024 financing.

Loss on issuance of warrants

The loss on issuance of warrants of $1,633,767 for the fiscal year ended September 30, 2024 relates to the February 2024 financing transaction and is the result of the fair value of the warrants being greater than the cash received from the financing.

Net Loss

Net loss decreased $2,934,610, or 29% to $7,088,306 for the fiscal year ended September 30, 2024 compared to $10,022,916 for the fiscal year ended September 30, 2023, due to the factors noted above.

Recently Issued Accounting Pronouncements

See Note C, “Recent Accounting Standards,” to the accompanying consolidated financial statements for a description of accounting standards which may impact our consolidated financial statements in future reporting periods.

Liquidity and Capital Resources

Our liquidity needs consist of our working capital requirements and research and development expenditure funding. As of September 30, 2024, we had working capital of $5,649,546. For the fiscal year ended September 30, 2024, we used cash in operating activities of

$13,711,397 consisting primarily of our net loss of $7,088,306 net with non-cash adjustments of $696,425 in depreciation and amortization charges, $572,293 in stock-based compensation expense, $9,430,000 in unrealized gain on change in fair value of warrants classified as a liability, $1,633,767 in loss on issuance of warrants, $394,000 in unrealized loss on change in fair value of warrants classified as liability-warrant modification, $633,198 in transaction costs allocated to warrant liabilities, and $17,125 for shares issued related to Spindle earnout. Additionally, we had a net increase in operating assets of $641,805 and a net decrease in operating liabilities of $498,094. Cash used in investing activities of $407,904 was primarily for cash paid for property, plant and equipment.

The Company has recurring net losses, which have resulted in an accumulated deficit of $309,672,755 as of September 30, 2024. The Company incurred a net loss of $7,088,306 for the fiscal year ended September 30, 2024.These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Our 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 and equity-linked securities.

As discussed in Note M to our consolidated financial statements, on October 31, 2024, we closed on a registered direct offering and received net proceeds, after deducting placement agent fees and other estimated offering expenses payable by us, of approximately $5.8 million. As a result of this offering, our consolidated cash balance as of November 30, 2024 was approximately $10.1 million.

We expect CAPEX to be less than $1,500,000 in fiscal 2025. Our primary investments are expected to be in our Therapeutic DNA Production segment’s research and development activities. We estimate the cost of creating the critical starting materials fit-for-purpose manufacturing facility will be approximately $1.5 million. If we were to expand the facility to enable GMP production of LineaDNA for use as or, or incorporation into, a biologic, drug substance and/or drug product, the cost may be up to approximately $10 million which would require additional funding. We anticipate that the fit-for-purpose manufacturing facility would be created within our existing laboratory space. We anticipate that a facility to enable GMP production of biologic, drug substances and/or drug products would require us to acquire additional space.

Substantially all of the real property used in our business is leased under operating lease agreements.

Critical Accounting Estimates and Policies

Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.

We believe that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

The accounting policies identified as critical are as follows:

Critical Accounting Estimates

The preparation of the financial statements in conformity with Accounting Principles Generally Accepted in the United States of America (“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 critical estimates include recoverability of long-lived assets, including the values assigned to intangible assets, fair value calculations for warrants, and contingencies. 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

We follow FASB issued accounting standard updates which clarify the principles for recognizing revenue arising from contracts with customers (“ASC 606” or “Topic 606”).

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.

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

The Company’s PCR-produced linear DNA product revenues are accounted for/recognized 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 invoices customers upon shipment, and its collection terms range, on average, from 30 to 60 days.

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 testing services, 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. For those customers with a fixed monthly fee, the revenue is recognized over-time as the services are provided.

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.

Warrant Liabilities

The Company evaluates its warrants issued the “Warrants) in accordance with ASC 480 “Distinguishing Liabilities from Equity” and ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” and concluded that due to the terms of certain of its warrant agreements, the instruments do not qualify for equity treatment. As such, the Common Warrants, Series A Warrants and Private Common Warrants were recorded as a liability on the consolidated balance sheet and measured at fair value at inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement”, with changes in fair value recognized in the condensed consolidated statement of operations in the period of change.

Nasdaq Delisting Notice

On November 12, 2024, we received Notice from Nasdaq notifying us that we are not in compliance with the Minimum Bid Price Requirement. Based on the closing bid price of the Company’s Common Stock for the thirty-one (31) consecutive business days from September 27, 2024 to November 11, 2024, we no longer meet the Minimum Bid Price Requirement.

The Notice does not impact our listing on The Nasdaq Capital Market at this time. The Notice states that the Company has 180 calendar days, or until May 12, 2025, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the bid price of the Company’s Common Stock must have a closing bid price of at least $1.00 per share for a minimum of ten (10) consecutive business days, with a longer period potentially required by the Staff. If the Company does not regain compliance with the Minimum Bid Price Requirement by May 12, 2025, the Company may be eligible for an additional 180 calendar day compliance period. To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary, no later than ten (10) business days prior to May 12, 2025.

However, if it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq would notify the Company that its securities would be subject to delisting. In the event of such a notification, the Company may appeal the Staff’s determination to delist its securities, but there can be no assurance the Staff would grant the Company’s request for continued listing.

As previously reported on its current report on Form 8-K on October 31, 2024, the Company closed on such date the October 2024 Offering. Pursuant to the October 2024 Purchase Agreement entered into in connection with the October 2024, the Company is required to effect the Reverse Stock Split if, at any time after the Stockholder Approval Date, it is not in compliance with the Minimum Bid Price Requirement and has received a deficiency letter from Nasdaq. The Company must effect the Reverse Stock Split within 30 days of the Stockholder Approval Date; provided that if within such 30 day period the Company regains compliance with the Bid Price Rule, the Company shall have no obligation to effect the Reverse Stock Split. The Company intends to implement a reverse stock split of its outstanding securities to regain compliance with the Bid Price Rule and to comply with the provisions of the October Purchase Agreement, unless the Company otherwise regains compliance with the Bid Price Rule within 30 days of the Stockholder Approval Date.

Recent Debt and Equity Financing Transactions

Registered Direct Offering and Concurrent Private Placement

On October 31, 2024, we closed the October 2024 Offering in which, pursuant to the October 2024 Securities Purchase Agreement dated October 31, 2024, by and between the Company and the October 2024 Purchasers, the Company issued and sold 19,247,498 shares of the Company’s Common Stock, and October 2024 Pre-Funded Warrants (“October 2024 Pre-Funded Warrants”) to purchase up to 1,065,002 shares of Common Stock, and

(ii) in the October 2024 Private Placement, October 2024 Series C Warrants to purchase up to 20,312,500 shares of Common Stock and October 2024 Series D Warrants to purchase up to 20,312,500 shares of Common Stock. The purchase price for each share of Common Stock and accompanying October 2024 Series C Warrant and October 2024 Series D Warrant was $0.32 and the purchase price for each October 2024 Pre-Funded Warrant and accompanying October 2024 Series C Warrant and October 2024 Series D Warrant was $0.3199. Craig-Hallum acted as placement agent in connection with the October 2024 Offering.

The Company received gross proceeds from the October 2024 Offering, before deducting placement agent fees and other estimated offering expenses payable by the Company, of approximately $6.5 million.

Pursuant to that certain engagement letter, dated August 23, 2024, by and between the Company and Craig-Hallum, the Company agreed to pay the Placement Agent a cash placement fee equal to 6.0% of the aggregate gross proceeds raised in the October 2024 Offering from sales arranged for by Craig-Hallum. Subject to certain conditions, the Company also agreed to reimburse certain expenses of Craig-Hallum in connection with the October 2024 Offering, including but not limited to legal fees, up to a maximum of $100,000. The Company also agreed to issue to Craig-Hallum, or its respective designees, October 2024 Placement Agent Warrants to purchase up to 1,015,625 shares of Common Stock (which equals 5.0% of the number of shares of Common Stock and October 2024 Pre-Funded Warrants offered) with an exercise price per share of $0.32. The October 2024 Placement Agent Warrants are exercisable upon the Stockholder Approval Date and will expire on October 30, 2029.

The October 2024 Pre-Funded Warrants have an exercise price of $0.0001 per share and are immediately exercisable and can be exercised at any time after their original issuance until such October 2024 Pre-Funded Warrants are exercised in full. Each share of Common Stock is being sold at an offering price of $0.32 and each Pre-Funded Warrant is being sold at an offering price of $0.3199 (equal to the purchase price per share of Common Stock minus the exercise price of the Pre-Funded Warrant).

The exercisability of the October 2024 Private Placement Warrants will be available only upon receipt of Warrant Stockholder Approval. Each October 2024 Series C Warrant has an exercise price of $0.32 per share of Common Stock, will become exercisable upon the Stockholder Approval Date, and will expire on the five-year anniversary of the Stockholder Approval Date. Each October 2024 Series D Warrant has an exercise price of $0.32 per share of Common Stock, will become exercisable upon the Stockholder Approval Date, and will expire on the 18-month anniversary of the Stockholder Approval Date. Each October 2024 Placement Agent Warrant has an exercise price of $0.32 per share of Common Stock, will become exercisable upon the Stockholder Approval Date and will expire on October 30, 2029.

The Company has agreed to hold a special meeting of stockholders to obtain the Warrant Stockholder Approval no later than 90 days after the closing of the Offering (the “Special Meeting”). If the Company does not obtain Warrant Stockholder Approval at the first meeting, the Company is obligated to call a meeting every ninety days thereafter to seek Warrant Stockholder Approval until the earlier of the date on which Warrant Stockholder Approval is obtained or the October 2024 Series Warrants are no longer outstanding. The Company agreed to file a preliminary proxy statement with respect to obtaining Warrant Stockholder Approval at the Special Meeting within 20 days following the closing date of the October Purchase Agreement, and such preliminary proxy statement was filed on November 14, 2024.

Under the alternate cashless exercise option of the October 2024 Series D Warrants, the holder of an October 2024 Series D Warrant, has the right to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of Common Stock that would be issuable upon a cash exercise of the October 2024 Series D Warrant and (y) 1.0. In addition, the October 2024 Series D Warrants will include a provision that resets their exercise price in the event of a reverse split of our Common Stock, to a price equal to the lesser of (i) the then exercise price and (ii) lowest volume weighted average price (VWAP) during the period commencing five trading days immediately preceding and the five trading days commencing on the date we effect a reverse stock split in the future with a proportionate adjustment to the number of shares underlying the October 2024 Series D Warrants, subject to a floor of $0.0634.

The October 2024 Private Placement Warrants and the shares of Common Stock issuable upon the exercise of the October 2024 Private Placement Warrants are not registered under the Securities Act. The October 2024 Private Placement Warrants were issued, and the shares of Common Stock issuable upon exercise thereof will be issued, in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder, for transactions not involving a public offering.

Pursuant to the October 2024 Purchase Agreement, within 20 calendar days from the date of the October 2024 Purchase Agreement, the Company agreed to file a registration statement on Form S-1 providing for the resale by the October 2024 Purchasers of the shares of Common Stock issuable upon exercise of the October 2024 Private Placement Warrants. The Company agreed to use commercially reasonable efforts to cause such registration statement to become effective within 50 calendar days following the closing date of the October 2024 Purchase Agreement (or 90 calendar days following the closing date of the October 2024 Purchase Agreement in the event that the SEC requires the Company to include its audited year-end financial statements for the fiscal year ended September 30, 2024 in such registration statement) and to keep such registration statement effective at all times until no Purchaser owns any Series Warrants or shares of Common Stock issuable upon exercise thereof. The Company filed the registration statement with the SEC on November 19, 2024.

In the event of any fundamental transaction, as described in the October 2024 Private Placement Warrants and generally including any merger with or into another entity, sale of all or substantially all of the Company’s assets, tender offer or exchange offer, reclassification of the shares of Common Stock, or the acquisition of greater than 50% of the Company’s then outstanding shares of Common Stock by a person or persons, subject to certain exceptions, then upon any subsequent exercise of an October 2024 Private Placement Warrant, the holder will have the right to receive as alternative consideration, for each share of Common Stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number of shares of Common Stock of the successor or acquiring corporation of the Company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of Common Stock for which the October 2024 Private Placement Warrant is exercisable immediately prior to such event. Notwithstanding the foregoing, in the event of a fundamental transaction, the holders of the October 2024 Private Placement Warrants have the right to require the Company or a successor entity to purchase the October 2024 Private Placement Warrants for cash in the amount of the Black Scholes Value (as defined in the October 2024 Series Warrants) of the unexercised portion of the October 2024 Private Placement Warrants concurrently with or within 30 days following the consummation of a fundamental transaction. However, in the event of a fundamental transaction which is not in the Company’s control or in which the consideration payable consists of equity securities of a successor entity that is quoted or listed on a nationally recognized securities exchange, the holders of the October 2024 Private Placement Warrants will only be entitled to receive from the Company or its successor entity, as of the date of consummation of such fundamental transaction the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the October 2024 Private Placement Warrants that is being offered and paid to the holders of Common Stock in connection with the fundamental transaction, whether that consideration is in the form of cash, stock or any combination of cash and stock, or whether the holders of Common Stock are given the choice to receive alternative forms of consideration in connection with the fundamental transaction.

Amendment to Series A Warrants

As previously disclosed on our current report on Form 8-K filed on May 29, 2024 we closed on such date the May 2024 Offering of Common Stock and warrants, including 9,230,769 May 2024 Series A Warrants and 9,230,769 May 2024 Series B Warrants, with Craig-Hallum and Laidlaw acting as placement agents. As part of the May 2024 Offering, the Company entered into the May 2024 Placement Agency Agreement, dated May 28, 2024, with Craig-Hallum and Laidlaw.

Subject to certain exceptions, the Price Reset Mechanism in the May 2024 Series A Warrants provide for an adjustment to the exercise price and number of shares underlying the May 2024 Series A Warrants upon the Company’s issuance of Common Stock or Common Stock equivalents at a price per share that is less than the exercise price of the May 2024 Series A Warrants.

On October 30, 2024, the Company and certain holders of the May 2024 Series A Warrants entered into the Warrant Amendment, pursuant to which the Price Reset Mechanism became subject to a floor equal to $0.20.

In connection with the October 2024 Offering, the Price Reset Mechanism in the May 2024 Series A Warrants was triggered, which resulted in the number of shares of Common Stock issuable upon exercise of the May 2024 Series A Warrants increasing from 9,230,769 to 91,890,698. The exercise price of the May 2024 Series A Warrants was adjusted from $1.99 per share to $0.20 per share with respect to the May 2024 Series A Warrants amended by the Warrant Amendment, and to $0.19 with respect to the May 2024 Series A Warrants not amended by the Warrant Amendment.

Waiver of Standstill in Placement Agency Agreement

As disclosed above, the Company closed the May 2024 Offering of Common Stock and warrants, including the May 2024 Series Warrants, with Craig-Hallum and Laidlaw as placement agents. As part of the May 2024 Offering, the Company entered into the May 2024 Placement Agency Agreement. The May 2024 Placement Agency Agreement contains a negative covenant which restricts the Company’s ability to enter into certain equity sales of its securities for a period of time after the closing of the May 2024 Offering without the prior consent of Craig-Hallum (the “Negative Covenant”).

On October 29, 2024, in connection with entering into the October 2024 Offering, the Company and Craig-Hallum entered into a waiver of the Negative Covenant, which permitted the Company to proceed with the October 2024 Offering.

Fiscal 2024

Registered Direct Offering

On February 2, 2024, the Company closed on a registered direct public offering (the “RDO”) of 161,403 shares of the Company’s Common Stock and pre-funded warrants (“RDO Pre-Funded Warrants”) to purchase up to 120,800 shares of Common Stock, and in a concurrent private placement, unregistered common warrants (“Private Common Warrants”) to purchase up to 564,407 shares of Common Stock. In connection with the RDO, the Company entered into securities purchase agreements (the “RDO Purchase Agreements”) with certain institutional investors (each, an “RDO Purchaser” and, collectively, the “RDO Purchasers”). The Company received net proceeds from the RDO, after deducting placement agent fees and other estimated offering expenses payable by the Company, of approximately $2.8 million.

The RDO Pre-Funded Warrants had an exercise price of $0.0001 per share and are immediately exercisable and can be exercised at any time after their original issuance until such RDO Pre-Funded Warrants are exercised in full. Each share was sold at an offering price of $12.18 and each RDO Pre-Funded Warrant was sold at an offering price of $12.18 (equal to the purchase price per share of Common Stock minus the exercise price of the RDO Pre-Funded Warrant). Pursuant to the RDO Purchase Agreements, the Company also agreed to issue to the RDO Purchasers, in a concurrent private placement, the Private Common Warrants. Each Private Common Warrant has an exercise price of $12.18 per share, and became exercisable following shareholder approval obtained on April 15, 2024 and will expire on April 15, 2029. During the three-month period ended June 30, 2024, all of the 120,800 RDO Pre-Funded Warrants were exercised.

The Private Common Warrants and the shares of Common Stock issuable upon the exercise of the Private Common Warrants are not registered under the Securities Act. The Private Common Warrants and the shares of Common Stock issuable upon exercise thereof were issued or will be issued, respectively, in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder, for transactions not involving a public offering. Pursuant to the RDO Purchase Agreements, within 45 calendar days from the date of the RDO Purchase Agreements, the Company agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) providing for the resale by the RDO Purchasers of the shares issuable upon exercise of the Private Common Warrants. The Company agreed to use commercially reasonable efforts to cause such registration statement to become effective within 90 days following the closing date of the RDO Purchase Agreements and to keep such registration statement effective at all times until no RDO Purchaser owns any Private Common Warrants or shares of Common Stock issuable upon exercise thereof. The Company filed the registration statement on March 12, 2024, and the registration statement was declared effective on March 20, 2024.

In connection with the RDO and the RDO Purchase Agreements, the Company agreed to reduce the exercise price of warrants previously issued to the RDO Purchasers with exercise prices ranging from $25.80 to $80.00 per warrant to $12.18 per warrant. The Company also agreed to extend the expiration dates for such warrants to August 2028. In addition, 2,904 outstanding common stock warrants held by other investors who did not participate in the RDO had their exercise price reduced to $12.18 per warrant share and had their warrant expiration dates extended to August 2028. The foregoing reductions of the exercise price and extension of expiration dates of such warrants were approved by shareholders on April 15, 2024. The incremental change in fair value as a result of the modification for the warrants that are recorded as a liability was $1,633,767 and is recorded as a unrealized loss on the change in fair value of warrants classified as a liability in the condensed consolidated statement of operations for the nine-month period ended June 30, 2024. The incremental change in fair value as a result of the modification for the warrants that are recorded to equity was $155,330 and is recorded as a deemed dividend in the condensed consolidated statement of operations for the nine-month period ended June 30, 2024.

April 2024 Special Meeting & Reverse Stock Split

On April 15, 2024, the Company held a special meeting of stockholders (the “April 2024 Special Meeting”) pursuant to which its stockholders approved the following: (i) in accordance with Nasdaq Listing Rule 5635(d), the issuance to certain holders of common stock purchase warrants in connection with a private placement; (ii) in accordance with Nasdaq Listing Rule 5635(d), the repricing of certain of our common stock purchase warrants; (iii) a grant of discretionary authority to the Board of Directors giving them the authority to amend the Company’s certificate of incorporation, as amended, to effect a reverse stock split of Common Stock, at a ratio in the range from one-for-five to one-for-fifty, with such specific ratio to be determined by the Company’s Board of Directors following the Special Meeting (the “Reverse Split Proposal”) in order to regain compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq, as set forth in the Nasdaq Listing Rule 5550(a)(2) ; and (iv) an amendment to the Company’s 2020 Equity Incentive Plan to increase the number of authorized shares of Common Stock reserved for issuance by 200,000 shares.

The reverse stock split was effected at 12:01 a.m. Eastern Time on Thursday, April 25, 2024 and combined each twenty shares of our outstanding Common Stock into one share of Common Stock, without any change in the par value per share. Moreover, the reverse stock split correspondingly adjusted, (i) the per share exercise price and the number of shares issuable upon the exercise of all outstanding options, and (ii) the number of shares underlying any of our outstanding warrants by adjusting the conversion ratio for each instrument and increasing the applicable exercise price or conversion price in accordance with the terms of each instrument and based on the reverse stock split ratio. No fractional shares were issued in connection with the reverse stock split. Any fractional shares resulting from the reverse stock split were rounded up to the nearest whole share.

Public Offering

On May 28, 2024, the Company entered into the May 2024 Placement Agency Agreement with Craig-Hallum and Laidlaw pursuant to which they agreed to serve as the co-placement agents, on a “reasonable best efforts” basis, in connection with the issuance and sale of 9,230,769 units (the “Units”), with each Unit consisting of either (A) one share of the Company’s Common Stock, and one May 2024 Series A Warrant to purchase one share of Common Stock and one May 2024 Series B Warrant to purchase on share of Common Stock, or (B) one pre-funded warrant (each, a “May 2024 Pre-Funded Warrant”) to purchase one share of Common Stock and one May 2024 Series A Warrant and one May 2024 Series B Warrant. In connection with the May 2024 Offering, the Company also issued placement agent warrants (“May 2024 Placement Agent Warrants”) to purchase up to 461,538 shares of Common Stock. The May 2024 Offering closed on May 29, 2024. The purchase price of each Unit was $1.30, except for Units which include May 2024 Pre-Funded Warrants, which had a purchase price of $1.2999. The Units had no stand-alone rights and will not be certificated or issued as stand-alone securities.

The Company received net proceeds from the May 2024 Offering, after deducting placement agent fees and other offering expenses payable by the Company, of approximately $10.5 million.

The exercisability of the May 2024 Series Warrants was available only upon receipt of such stockholder approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market (the “May 2024 Warrant Stockholder Approval”). Each May 2024 Series A Warrant would become exercisable beginning on the date of the May 2024 Warrant Stockholder Approval at an exercise price of $1.99 per share of Common Stock, and will expire five years from the date of the May 2024 Warrant Stockholder Approval. Each May 2024 Series B Warrant would become exercisable beginning on the date of the May 2024 Warrant Stockholder Approval at an exercise price of $1.99 per share of Common Stock, and will expire one year from the date of the May 2024 Warrant Stockholder Approval. The Company obtained May 2024 Warrant Stockholder Approval at its annual shareholder’s meeting which was held on September 30, 2024.

Under the alternate cashless exercise option of the May 2024 Series B Warrants, the holder of the May 2024 Series B Warrant has the right to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of Common Stock that would be issuable upon a cash exercise of the May 2024 Series B Warrant and (y) 3.0. In addition, the May 2024 Series A Warrants and May 2024 Series B Warrants include a provision that resets their respective exercise price in the event of a reverse split of the Company’s Common Stock, to a price equal to the lesser of (i) the then exercise price and (ii) lowest volume weighted average price (VWAP) during the period commencing five trading days immediately preceding and the five trading days commencing on the date the Company effects a reverse stock split in the future with a proportionate adjustment to the number of shares underlying the May 2024 Series A Warrants and May 2024 Series B Warrants.

Subject to certain exceptions, the Price Reset Mechanism in the May 2024 Series A Warrants provide for an adjustment to the exercise price and number of shares underlying the May 2024 Series A Warrants upon the Company’s issuance of Common Stock or Common Stock equivalents at a price per share that is less than the exercise price of the May 2024 Series A Warrants. In connection with the October 2024 Offering detailed above, the Price Reset Mechanism in the May 2024 Series A Warrants was triggered, which resulted in the number of shares of Common Stock issuable upon exercise of the May 2024 Series A Warrants increasing from 9,230,769 to 91,890,698. The exercise price of the May 2024 Series A Warrants was adjusted from $1.99 per share to $0.20 per share with respect to the May 2024 Series A Warrants amended by the Warrant Amendment, and to $0.19 with respect to the May 2024 Series A Warrants not amended by the Warrant Amendment.

The Common Stock and May 2024 Pre-Funded Warrants were only sold with the accompanying May 2024 Series A Warrants and May 2024 Series B Warrants that are part of a Unit, but the components of the Units were immediately separable and were issued separately in this Offering. During the three-month period ended June 30, 2024, all of the May 2024 Pre-Funded Warrants were exercised.

Product Research and Development

We anticipate spending approximately $2,000,000 for product research and development activities during the next twelve months. We plan to focus these activities on the further development and commercialization of our Therapeutic DNA Production services, including without limitation, research and development activities relating to our LineaDNA and Linea IVT platforms.

Off-Balance Sheet Arrangements

As a requirement of our lease agreement for our corporate headquarters entered into during January, 2023, in lieu of a security deposit, we provided a standby letter of credit of $750,000. The letter of credit is effective through January 2026.

Inflation

The effect of inflation on our revenue and operating results was not significant during the fiscal years ended September 30, 2024 and 2023.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Information requested by this Item is not applicable as we are electing scaled disclosure requirements available to Smaller Reporting Companies with respect to this Item.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See pages F-1 through F-32 following the Exhibit Index.

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

ITEM 9A.CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer, along with the Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) under the Exchange Act, as of September 30, 2024. Disclosure controls and procedures are those controls and procedures designed to provide reasonable assurance that the information required to be disclosed in our Exchange Act filings is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures were effective.

Management Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting was designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published consolidated financial statements. Internal control over financial reporting is promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting, no matter how well designed, has inherent limitations and may not prevent or detect misstatements. Therefore, even effective internal control over financial reporting can only provide reasonable assurance with respect to the financial statement preparation and presentation.

Our management has conducted, with the participation of our CEO and CFO, an assessment, including testing of the effectiveness, of our internal control over financial reporting as of September 30, 2024. Management’s assessment of internal control over financial reporting was based on assessment criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on such evaluation, management concluded that our internal control over financial reporting was effective as of September 30, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.OTHER INFORMATION.

None.

ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

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Part III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Board of Directors, Executive Officers and Key Employees

The Board of Directors (the “Board of Directors”) currently consists of six members. The term of each Director expires at our next annual meeting or until his or her successor is appointed. Our executive officers are elected by, and serve at the discretion of, the Board of Directors. There are no family relationships between any directors or executive officers.

The ages of the directors and executive officers are shown as of December 13, 2024.

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Set forth below is biographical information with respect to the aforementioned individuals.

James A. Hayward, Ph.D., Sc.D.

Dr. James A. Hayward has been our Chief Executive Officer since March 17, 2006, a director on the Board of Directors since September 28, 2005 and the Chairman of the Board of Directors since June 12, 2007. He was previously our acting Chief Executive Officer from October 5, 2005 until March 17, 2006 and our President from June 12, 2007 until December 13, 2024. He also served as Acting Chief Financial Officer from August 20, 2013 through October 13, 2013. Dr. Hayward received his Ph.D. in Molecular Biology from the State University of New York at Stony Brook (“Stony Brook”) in 1983 and an honorary Doctor of Science from the same institution in 2000. His experience with public companies began with the co-founding of one of England’s first biotechnology companies — Biocompatibles, Ltd. Following this, Dr. Hayward was at the Estee Lauder companies for five years, eventually becoming Head of Product Development. In 1990, he founded The Collaborative Group, a provider of products and services to the biotechnology, pharmaceutical and consumer-product industries based in Stony Brook, where he served as Chairman, President and Chief Executive Officer for 14 years. During this period, The Collaborative Group created several businesses, including The Collaborative BioAlliance, a contract developer and manufacturer of human protein products that was sold to Dow Chemical in 2002, and Collaborative Labs, a service provider and manufacturer of ingredients for skincare and dermatology that was sold to Engelhard (now BASF) in 2004. He is the winner of the first Helix Award from BIO and has been twice elected Entrepreneur of the Year by Inc. Magazine and the Long Island Technology Hall of Fame. He has served on the Boards of The Stony Brook Foundation, the NYS Research Foundation, and the NYS Regents Advisory Board. Dr. Hayward also serves on the advisory board of the Manufacturing and Technology Resource Consortium of Stony Brook University, and on the boards of Softheon Corporation, NeoMatrix Formulations, Inc. and the TNPO2 Foundation.

Dr. Hayward’s experience and senior leadership positions in companies in the biotechnology, pharmaceutical and consumer-product industries, and specifically his qualifications and skills in the areas of general operations, financial operations and administration, as

well as his role as the Company’s Chief Executive Officer, led the Board of Directors to conclude that Dr. Hayward should serve as a director of the Company.

Yacov A. Shamash

Dr. Yacov A. Shamash has been a member of the Board of Directors since March 17, 2006. Dr. Shamash is a Professor of Electrical and Computer Engineering at Stony Brook, a position he has held since 1992. From 1992 to 2015, he was the Dean of Engineering and Applied Sciences, and from 1995 to 2004, Dr. Shamash was also the Dean of the Harriman School for Management and Policy at Stony Brook. He served as Vice President for Economic Development at Stony Brook from 2001 to 2019. He was founder of the New York State Center for Excellence in Wireless and Information Technology, and the New York State Center for Excellence in Advanced Energy Research, at Stony Brook. Dr. Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash serves on the board of directors of public companies Comtech Telecommunications Corp. and Keytronic Corp. He is on the boards of several not for profit organizations: the Long Island First Robotics and Listnet. Dr. Shamash holds a Ph.D. degree in Electrical Engineering from the Imperial College of Science and Technology in London, England.

Dr. Shamash encounters leaders of businesses large and small, regional and global in their reach, on a daily basis and, as a member of our Board of Directors, Dr. Shamash has played an integral role in our business development by providing the highest-level introductions to customers, channels to market and to the media. Dr. Shamash also brings to our Board of Directors his valuable experience gained from serving as a director at other private and public companies. The Board of Directors believes that Dr. Shamash’s technical experience and other abilities make him a valuable member of the Board of Directors.

Sanford R. Simon

Dr. Sanford R. Simon has been a member of the Board of Directors since March 17, 2006. Dr. Simon was a Professor of Biochemistry, Cell Biology and Pathology at Stony Brook from 1969 to January 2022. He joined the faculty at Stony Brook as an Assistant Professor in 1969 and was promoted to Associate Professor with tenure in 1975. Dr. Simon was a member of the board of directors of The Collaborative Group from 1995 to 2004. From 1967 to 1969, Dr. Simon was a Guest Investigator at Rockefeller University. Dr. Simon received a B.A. in Zoology and Chemistry from Columbia University in 1963 and, a Ph.D. in Biochemistry from Rockefeller University in 1967, and he studied as a postdoctoral fellow with Nobel Prize winner Max Perutz in Cambridge, England. He has maintained an active research laboratory studying aspects of cell invasion in cancer and inflammation, the uses of small molecules in modulating diverse cell functions, and novel strategies of drug delivery; he also teaches undergraduate, graduate, medical and dental students.

Dr. Simon has worked in the use of large biomolecules in commercial media, and we have made use of his expertise in formulating DNA into commercial carriers for specific customers. As a member of our Board of Directors, Dr. Simon has advised us on patents, provided technical advice, and introduced us to corporate partners and customers. The Board of Directors believes that Dr. Simon’s advice makes him a valuable member of the Board of Directors.

Joseph D. Ceccoli

Joseph D. Ceccoli has been a member of the Board of Directors since December 3, 2014. Since 2010, Mr. Ceccoli has been the Founder, President and CEO of Biocogent, LLC (“Biocogent”), a bioscience company located at the Stony Brook Long Island High Technology Incubator. Biocogent is focused on the invention, development and commercialization of skin-active molecules and treatment products used in regulated (over-the-counter / med-care), personal care and consumer products. Prior to starting Biocogent, Mr. Ceccoli was Global Director of Operations for BASF Corporation, a global Fortune 100 company and the world’s largest global chemical company, where he was responsible for the integration, operations and growth of domestic and overseas business units from 2007 to 2008. Prior to BASF, Mr. Ceccoli was a General Manager for Engelhard Corporation, a U.S.-based Fortune 500 company and chief operating officer of Long Island-based The Collaborative Group from 2004 to 2007. Mr. Ceccoli holds a Bachelor of Science (“B.S.”) degree in Biotechnology from Rochester Institute of Technology and advanced professional training in various pharmaceutical sciences, emulsion chemistry, engineering and management disciplines. He is a member of numerous professional organizations such as the American Chemical Society and the Society of Cosmetic Chemists. Mr. Ceccoli has authored and co-authored 16 technical papers that have appeared in peer reviewed and industry specific journals and magazines and is inventor on 16 patents.

The Board of Directors believes that Mr. Ceccoli’s experience across the bioscience and chemical markets, including in global and U.S.-based operations and management, enriches our Board of Directors. Mr. Ceccoli’s experience as an executive officer and director of several bioscience and chemical companies and organizations led the Board of Directors to conclude that he should serve as a director of the Company.

Robert B. Catell

Robert B. Catell has been a member of the Board of Directors since October 7, 2016. Mr. Catell serves as Chairman of the Advanced Energy Research and Technology Center (AERTC) at Stony Brook and the National Offshore Wind Research and Development Consortium (NOWRDC). He also serves on the board of several business and not-for-profit organizations, including Long Island Association (LIA), A+ Technology & Security Solutions, Inc., ThermoLift Inc., and Utility Technology Solutions (UTS). Mr. Catell was formerly Chairman and CEO of KeySpan Corporation and KeySpan Delivery (formerly Brooklyn Union Gas), Chairman of National Grid, U.S. and Deputy Chairman of National Grid plc, upon National Grid’s acquisition of KeySpan, and has served on numerous boards including New York State Energy Research & Development Authority (NYSERDA.) Mr. Catell chaired the New York State Business Council from 2002 to 2003 and the Brooklyn Chamber of Commerce from 1994 to 1995.

Mr. Catell holds both a Master’s and a Bachelor’s degree in Mechanical Engineering from City College of New York and is a registered Professional Engineer. He has attended Columbia University’s Executive Development Program, and the Advanced Management Program at the Harvard Business School.

The Board of Directors believe that Mr. Catell’s extensive executive-level management experience, including as a director at other private and public companies and within regulated and technical industries, qualifies him to serve as one of our directors.

Elizabeth M. Schmalz Shaheen

Ms. Elizabeth M. Schmalz Shaheen has been a member of the Board of Directors since June 1, 2017. She has served as President of American Flavors & Fragrances LLC, a fragrance company, since 2003. Ms. Schmalz Shaheen also serves as President of her own consulting firm, Betsy Schmalz & Associates. She served as Senior Vice President of Corporate Product Development at Estée Lauder. Ms. Schmalz Shaheen’s responsibilities included overseeing product development for some of the company’s most prominent brands. Subsequently, she was Executive Vice President of Product Development at Bath and Body Works and Victoria’s Secret for The Limited. Ms. Schmalz Shaheen started her senior management career at Revlon with responsibility for new product development for brands including Borghese, Ultima II and Prestige fragrances. She is an active member of Cosmetic Executive Women. She earned a bachelor’s degree in psychology from Georgian Court University and serves on their Board of Trustees.

Ms. Schmalz Shaheen’s track record of accomplishments as a strategist and products leader within the cosmetics and personal care industries led the Board of Directors to conclude she should serve as a director of the Company.

Beth Jantzen

Beth Jantzen has been our Chief Financial Officer since February 15, 2015. Previously, Ms. Jantzen held the position of Controller from May 2013 to her appointment as Chief Financial Officer. Prior to joining the Company, Ms. Jantzen was a senior manager at Marcum LLP, our independent registered accounting firm, from January 2000 until May 2013, where she managed multiple engagements and specialized in SEC policies, practices and procedures, including Sarbanes-Oxley compliance. Ms. Jantzen holds a B.S. in Accounting from the State University of New York at Binghamton and is also a Certified Public Accountant (CPA).

Judith Murrah

Ms. Judith Murrah has been our President since December 13, 2024, our Chief Operating Officer since January 19, 2021, our Chief Information Officer since June 1, 2013, and our Secretary since December 22, 2017. Ms. Murrah is responsible for our operations functions including production, quality, information technology and security, marketing, development of key customer and partner relationships, and field operations. Ms. Murrah was previously the Senior Director of Information Technology at Motorola Solutions, which had acquired her former firm, Symbol Technologies. Her role at Motorola Solutions included overseeing the global IT program management office, financial and supplier operations and quality assurance. At Symbol Technologies, Ms. Murrah held leadership positions in product line management, global account sales, corporate and marketing communications and IT. Ms. Murrah holds an MBA from Harvard Business School, and a B.S. in Industrial Engineering from the University of Rhode Island. She is an inventor on

14 U.S. patents. Ms. Murrah is active in Long Island’s business and academic community. She has co-founded and volunteers with non-profits engaging students in science, technology, engineering, and math disciplines. She serves on the boards of the Middle Country (N.Y.) Library Foundation, the Tesla Science Center at Wardenclyffe, and Stony Brook University’s Center for Corporate Education. Ms. Murrah was named to the Top 50 Women of Long Island Hall of Fame in 2023 and received the inaugural 2001 Diamond Award for Long Island Women Leaders in Technology.

Clay Shorrock

Mr. Shorrock has been our Chief Legal Officer and Executive Director of Business Development since April 2021, and has served as the President of LRx since December 13, 2024. Mr. Shorrock leads Applied DNA’s legal, regulatory, risk mitigation, intellectual property, and business development functions. Mr. Shorrock previously served as general and intellectual property counsel to Applied DNA from November 2016 through April 2019. Prior to rejoining the Company in April 2021, Mr. Shorrock was a member of the intellectual property groups of Florida-based Lowndes, Drosdick, Doster, Kantor & Reed, P.A. and Allen, Dyer, Doppelt & Gilchrist, P.A. Earlier in his career Mr. Shorrock was an associate at several New Jersey-based law firms where he focused on intellectual property and complex commercial transactions. Mr. Shorrock holds a B.A. in Biology from Franklin and Marshall College and a J.D. with a concentration in intellectual property from Seton Hall University Law School.

No Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our officers and directors and persons who beneficially own more than 10% of any class of our equity securities registered pursuant to Section 12 of the Exchange Act to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than 10% beneficial owners (“10% stockholders”) also are required by SEC rules to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of the copies of such forms furnished to us during or with respect to the fiscal year ended September 30, 2024, as the case may be, and upon written representations from these reporting persons, we believe that all reports required by Section 16(a) applicable to our officers, directors and 10% stockholders were filed on a timely basis, as disclosed in the forms described above, during the fiscal year ended September 30, 2024.

Governance of the Company

Code of Ethics

Our Board of Directors has adopted a “code of ethics” as defined by regulations promulgated under the Securities Act of 1933, as amended, and the Exchange Act (our “Code of Business Conduct and Ethics”) that applies to all of our employees, officers and directors, including our Chief Executive Officer, our Chief Financial Officer and those officers and employees responsible for financial reporting. The Code of Business Conduct and Ethics is designed to codify the ethical standards that we believe are reasonably designed to deter wrong-doing and promote honest and ethical conduct.

We have established procedures to ensure that suspected violations of the Code of Business Conduct and Ethics may be reported anonymously. A current copy of our Code of Business Conduct and Ethics is available on our website at https://investors.adnas.com/corporate-governance/governance-documents. A copy may also be obtained, free of charge, from us upon a request directed to Applied DNA Sciences, Inc., 50 Health Sciences Drive, Stony Brook, New York 11790, c/o Investor Relations. We intend to disclose any amendments to or waivers of a provision of the Code of Business Conduct and Ethics granted to directors and officers by posting such information on our website available at www.adnas.com and/or in our public filings with the SEC.

Board Committees

The Board of Directors maintains three committees: the audit committee, compensation committee and the nominating committee.

Audit Committee

Messrs. Catell, Ceccoli, and Shamash (Chairperson) served on the audit committee during the fiscal year ended September 30, 2024 and continue to serve on the audit committee. The Board of Directors has determined that each member of the audit committee is independent within the meaning of the director independence standards of the Company and Nasdaq as well as the heightened director independence standards of the SEC for audit committee members, including Rule 10A-3(b)(1) under the Exchange Act. The Board of Directors has

also determined that each of the members of the audit committee is financially sophisticated and is able to read and understand consolidated financial statements and that Dr. Shamash is an “audit committee financial expert” as defined in the Exchange Act. During fiscal 2024, the audit committee held four formal meetings.

The composition and responsibilities of the audit committee and the attributes of its members, as reflected in the charter, are intended to be in accordance with applicable requirements for corporate audit committees. The audit committee charter will be reviewed, and amended if necessary, on an annual basis.

The audit committee assists the Board of Directors in fulfilling its oversight responsibility relating to our financial statements and the disclosure and financial reporting process, our system of internal controls, our internal audit function, the qualifications, independence and performance of our independent registered public accounting firm, compliance with our code of ethics and legal and regulatory requirements. The audit committee has the sole authority to appoint, retain, terminate, compensate and oversee the work of the independent registered public accounting firm, as well as to pre-approve all audit and non-audit services to be provided by the independent registered public accounting firm.

Compensation Committee

Messrs. Ceccoli and Shamash (Chairperson) and Ms. Schmalz Shaheen served on the compensation committee during the fiscal year ended September 30, 2024 and continue to serve on the compensation committee. The Board of Directors has determined that each member of the compensation committee is independent within the meaning of the director independence standards of the Company and Nasdaq as well as the director independence standards of the SEC for compensation committee members, including Rule 10C-1 under the Exchange Act. The compensation committee reviews and approves salaries and bonuses for all officers, reviews and approves non-employee directors’ compensation, administers options outstanding under our stock incentive plan, provides advice and carries out the responsibilities required by SEC rules. The compensation committee believes that its processes and oversight should be directed toward attracting, retaining and motivating employees and non-employee directors to promote and advance our interests and strategic goals. As requested by the compensation committee, the Chief Executive Officer will provide information and may participate in discussions regarding compensation for other executive officers. The compensation committee also considers other general industry information and trends if available. During fiscal 2024, the compensation committee held two formal meetings.

Nominating Committee

Messrs. Shamash (Chairperson) and Simon and Ms. Schmalz Shaheen served on the nominating committee during the fiscal year ended September 30, 2024 and continue to serve on the nominating committee. The Board of Directors has determined that each member of the nominating committee is independent within the meaning of the director independence standards of the Company, Nasdaq and the SEC.

The nominating committee is responsible for, among other things: reviewing the Board of Directors’ composition, procedures and committees, and making recommendations on these matters to the Board of Directors; and reviewing, soliciting and making recommendations to the Board of Directors and stockholders with respect to candidates for election to the Board of Directors. During fiscal 2024, the nominating committee held one formal meeting.

ITEM 11.EXECUTIVE COMPENSATION

Compensation Overview

The Compensation Committee has overall responsibility for approving and evaluating the compensation arrangements for our named executive officers. Our named executive officers for fiscal 2024 are our Chairman, Chief Executive Officer and President, Dr. James Hayward, our Chief Financial Officer, Beth Jantzen, our Chief Operating Officer and Chief Information Officer, Judith Murrah, and our Chief Legal Officer and Executive Director of Business Development, Clay Shorrock. Our Chairman, Chief Executive Officer and President, Dr. Hayward, provides recommendations to the Compensation Committee with respect to the compensation of the named executive officers other than for Dr. Hayward himself. However, the Compensation Committee is free to make decisions that are contrary to the Chief Executive Officer and President’s recommendations.

On December 13, 2024, Dr. Hayward stepped down as President of the Company and Judith Murrah was appointed President of the Company. Also on December 13, 2024, Clay Shorrock was named President of LRx.

Our Executive Compensation Philosophy and Objectives

General

The fundamental purpose of our executive compensation program is to assist us in achieving our financial and operating performance objectives. Specifically, we attempt to tailor an executive’s compensation to (1) retain and motivate the executive, (2) reward him or her upon the achievement of Company-wide and individual performance, and (3) align the executive’s interest with the creation of long- term stockholder value, without encouraging excessive risk taking. To that end, and within the context of the stage of our company, we have historically compensated our named executive officers through a mix of base salary, equity-based incentives and cash bonuses.

Our business model is based on our ability to establish long-term relationships with clients and to maintain our strong mission, client focus, entrepreneurial spirit and team orientation. We have sought to create an executive compensation package that balances short-term versus long-term components, in ways we believe are most appropriate to motivate senior management and reward them for achieving key business goals.

Base Salary

Except, as noted below, we did not change the annual base salary for any of our named executive officers in fiscal 2024, and their respective annual base salaries remained as follows: Dr. Hayward, $450,000, Ms. Jantzen, $300,000, Ms. Murrah, $325,000 and Mr. Shorrock, $300,000. Effective as of January 1, 2024, Dr. Hayward and Ms. Murrah voluntarily reduced their annual base salaries to $250,000 and $243,750, respectively, in response to the cash position of the Company. This voluntary reduction was effective until May 25, 2024. Effective November 25, 2024, the base salaries for Ms. Murrah and Mr. Shorrock were increased to $400,000 and $385,000 respectively. Also, Ms. Murrah was named the President of Applied DNA Sciences, Inc. and Mr. Shorrock was named the President of LineaRx, Inc, effective on December 13, 2024. Concurrently on December 13, 2024 Dr. Hayward stepped down as the President of APDN. Dr. Hayward remains as the CEO and Chairman of the Board. Effective December 7, 2024 Ms. Jantzen’s base salary was increased to $385,000.

Bonuses

As of the date of this report, the Compensation Committee and the Board of Directors have determined that no cash incentive bonuses will be granted to Dr. Hayward, Ms. Jantzen, Mr. Shorrock or Ms. Murrah in respect of fiscal 2024 performance.

Long-Term Stock-Based Compensation

Our long-term compensation program has historically consisted solely of stock options. Stock option grants made to executive officers are designed to provide them with an incentive to execute their responsibilities in such a way as to generate long-term benefit to us and our stockholders.

We believe that, by only rewarding the creation of stockholder value, stock options provide our executive officers with an effective risk and reward profile.

There was no stock-based compensation granted to Dr. Hayward, Ms. Jantzen, Ms. Murrah, or Mr. Shorrock during the fiscal year ended September 30, 2024.

Benefits

We provide the following benefits to our named executive officers on the same basis as the benefits provided to all employees:

We believe these benefits are generally consistent with those offered by other companies and specifically with those companies with which we compete for employees.

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee is or has been an officer or employee of our Company. None of our executive officers currently serves, or in the past year has served, as a member of the Compensation Committee or director (or other board committee performing equivalent functions or, in the absence of any such committee, the entire Board of Directors) of any entity that has one or more executive officers who currently serves, or will serve, on our Compensation Committee or our Board of Directors.

Summary Compensation Table

The following table sets forth the compensation of our named executive officers for the fiscal years ended September 30, 2024 and 2023.

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Outstanding Equity Awards at Fiscal Year-End

The following table shows information concerning outstanding equity awards held by our named executive officers as of September 30, 2024, the last day of fiscal 2024.

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Employment Agreement with Dr. James A. Hayward

The following is a discussion of our employment agreement with Dr. Hayward as of December 13, 2024 and, where indicated, compensation actions prior to such date.

The Chairman and Chief Executive Officer is the only named executive officer with an employment agreement. Effective as of January 1, 2024, Dr. Hayward voluntarily reduced his salary to $250,000 in response to the then current cash position of the Company. This voluntary reduction was effective until May 25, 2024.

The initial term of Dr. Hayward’s employment agreement was from July 1, 2016 to July 1, 2017, and the term of the employment agreement renews automatically on an annual basis thereafter, unless either party provides the other with 90 days’ advance written notice of non-renewal. The employment agreement provides for an annual base salary, which is described above in the section entitled “Base Salary,” and the Board of Directors, acting in its discretion, may also grant annual bonuses and annual equity awards to Dr. Hayward, provided that Dr. Hayward may not be treated less favorably with respect to annual bonuses or annual equity awards than other executives of the Company. Dr. Hayward will be eligible to participate in retirement, welfare and incentive plans available to the Company’s other employees. The employment agreement also provides for the following limited perquisites: an automobile allowance of up to $1,500 per month, a gas allowance, the use of an outside driver for up to 20 hours per week, a gym membership and an airline club membership.

The employment agreement with Dr. Hayward also provides that if he is terminated by the company without “cause” (as defined in the employment agreement and summarized below) or if Dr. Hayward terminates his employment for “good reason” (as defined in the employment agreement and summarized below), then, in addition to payment or provision of any earned and unpaid base salary, bonus and benefits, and subject to his delivery of an executed general release and continuing compliance with restrictive covenants, Dr. Hayward will be entitled to receive: (i) a pro rata portion (based on the number of days elapsed from the beginning of the Company’s fiscal year to the date of his termination of employment) of the greater of (A) the annual bonus he would have received if his employment had continued through the end of the fiscal year of termination and (B) the prior year’s annual bonus; (ii) installment payments for two years following termination in an aggregate amount equal to the greater of (A) 2.99 times Dr. Hayward’s base salary and (B) two times the sum of (I) Dr. Hayward’s base salary and Dr. Hayward’s prior year’s annual bonus (or, if greater, Dr. Hayward’s target bonus (if any) for the fiscal year of termination); (iii) Company-paid COBRA continuation coverage for 18 months post-termination; (iv) continuing life insurance benefits (if any) for two years post-termination; and (v) extended exercisability of any outstanding vested stock options and stock appreciation rights (until three years from the termination date or, if earlier, until the expiration of the fixed stock option or stock appreciation right term).

If termination of Dr. Hayward’s employment is triggered by the Company without cause or by

Dr. Hayward for good reason, in each case, within six months before or two years after a “change in control of the Company” (as defined in the employment agreement), then, the severance payments that would otherwise have been paid in installments will be paid in a lump sum. Further, unless assumed or continued by the acquiror, all of Dr. Hayward’s outstanding stock options and other equity incentive awards will become fully vested upon the occurrence of a change in control of the Company (whether or not his employment is terminated in connection with such change in control). The exercisability period of outstanding stock options and stock appreciation rights would be extended until three years following the change in control (or, if later, until three years following a qualifying termination after a change in control), or, if earlier, until the earlier expiration of the fixed stock option or stock appreciation right term. In addition, the employment agreement provides that if the payments and benefits due to Dr. Hayward in connection with a change in control would be subject to an excise tax under Section 280G of the Code, they will be reduced to the maximum amount that would not trigger the excise tax, unless Dr. Hayward would be better off (on an after- tax basis) receiving all of the payments and benefits and paying all necessary applicable taxes. Additionally, if, following a change in control, the Company fails to comply with any of its obligations under the employment agreement or the Company takes any action to declare the employment agreement void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from Dr. Hayward (or his beneficiary) the payments and benefits intended to be provided, then Dr. Hayward (or his beneficiary, as the case may be) shall be entitled to select and retain counsel at the expense of the Company to represent him (or his beneficiary) in connection with the good faith initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, stockholder or other person affiliated with the Company or any successor thereto in any jurisdiction.

Upon a termination of his employment due to death or “disability” (as defined in the employment agreement), Dr. Hayward 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, other than the installment payments and the continuing life insurance benefits, and additionally, the extended exercisability provisions would apply to any outstanding stock options only.

For purposes of the employment agreement, “cause” means Dr. Hayward: (i) is convicted of or pleads nolo contendere to a felony, (ii) commits fraud or a material act or omission involving dishonesty affecting the assets, business or reputation of the Company or any of its subsidiaries or affiliates, (iii) willfully fails or refuses to carry out the material responsibilities of his employment, as reasonably determined by the Board of Directors, (iv) engages in gross negligence, willful misconduct or a pattern of behavior that has had or is reasonably likely to have a significant adverse effect on the Company or his ability to perform the duties and responsibilities of his employment, or (v) willfully engages in any act or omission that is in material violation of Company policy, including, without limitation, Company policy on business ethics and conduct, and Company policy on the use of inside information and insider trading; provided, however, that, if the conduct giving rise to termination for Cause is curable without material harm to the business or assets of the Company, Dr. Hayward will be afforded an opportunity to effect such a cure within 30 days after notice of termination and thereby avoid a termination for Cause based upon such conduct.

For purposes of the employment agreement, “good reason” is defined as any of the following: (i) a material adverse change by the Company of Dr. Hayward’s status or position as the Chief Executive Officer, including, without limitation, a material diminution of his position, duties, responsibilities or authority or the assignment to him of duties or responsibilities that are materially inconsistent with his status or position; (ii) a non-voluntary reduction by the Company of his annual base salary or failure to pay same; (iii) a breach by the Company of any of its material obligations under the employment agreement; (iv) relocation of Dr. Hayward without his consent beyond a 75-mile radius of his then principal place of employment in violation of the employment agreement; or (v) in connection with a change in control, the failure or refusal by the successor or acquiring company to expressly assume the obligations of the Company under the employment agreement. As a condition to terminating his employment for Good Reason, Dr. Hayward must, within 60 days after the occurrence of the event or condition giving rise to such termination, provide written notice to the Company (or the successor or acquiring company) of his desire to terminate for Good Reason, specifying the nature of the act or omission that he deems to constitute Good Reason. The Company shall have 30 days after receipt of such notice to review and, if required, correct the situation (and thus prevent his termination for Good Reason).

Dr. Hayward is subject to standard restrictive covenants, including a two-year post-employment non- compete and a two-year post-employment non-solicit of employees or customers. In his capacity as a Chief Executive Officer, Dr. Hayward’s position at the Company is a policy-making position in which he has the authority to make policy decisions that control significant aspects of the Company.

Director Compensation: Fiscal 2024

Due to the financial state of the Company, the Board waived their compensation for fiscal 2024.

None of the members of our Board of Directors received any other compensation in respect of fiscal 2024.

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ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The following table provides information as of September 30, 2024 with respect to shares of our common stock that may be issued under our existing equity compensation plans.

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