Applied DNA Sciences Inc (APDN)

[APDN 4 LIFE]

Here is how I see the revenue structure right now.

It is a $35k fee to the supplier, manufacturer etc. to create the distinct DNA mark which will serve as the companies identifier. Only that company will use that strand of DNA to mark its products so they can prove the authenticity of the source (just like human DNA in crimes). If APDN signs 100 contracts they will receive $3.5M in revenu right off the bat. I'm not sure if the $35k includes the equipment needed to mark and scan the items which could be another great source of revenue.

"Almost 10,000 suppliers to the US government were reported for suspected involvement in fake parts and other activities last year....In total close to 80,000 high-risk suppliers to the US government were reported over the 10-year period (2002-2012)." Source Here

Obviously they are targeting the more dangerous risks first through the DLA such as micro-chips used in fighter jets and missiles. With that said there is a huge opportunity for growth here considering how many high-risk suppliers there are.

If Signature DNA is required in all steps of the manufacturing and supply process (which makes sense to keep the integrity of the program) then we will be growing exponentially. They are expecting prime contractors to "flow down" requirements. That means whatever companies sign a contract with APDN will require their manufacturers and suppliers to also use Signature DNA to ensure they are not unknowingly selling counterfeit or salvaged parts. so 1 contract can turn into 3,4 or 10...

As for recurring revenue this is what you can expect. (Source Here

1 - 250 components = $0.60/component
251 - 500 @ .50
501 – 1,000 @ .40
1,001 – 5,000 @ .25
5,001 and over @ .20

These are costs per component so if they are sending out a shipment for 1M units which all need to be marked then it will be another $200k in revenues. The gold comes when those 1M units already have 3 parts integrated in them that were marked with Signature DNA. So that $200k will grow to $800k and with "flow down" requirements the growth really is exponential.

Counterfeiting is a growing problem across all major industries especially in big pharma and electronics costing 200b and 169b respectively (Source Here. These are our cash cows and Signature DNA has already proven they can mitigate these losses! The counterfeit market is estimated to hit $1.7 trillion by 2015. This is costing BIG companies BIG money. They will protect the value of their brand we just need to show them this is the way.

IMHO this is the best way for a company to protect their brand against counterfeit products. This company is based on a futuristic technology that is just coming to light now. this is disrupting the entire supply chain of an industry and that is not an easy feat. With that said we have our foot in the door and the opportunities are endless.

That is why I invested in APDN and will continue to do so, don't forget why you invested!