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<SEC-DOCUMENT>0001013762-05-000747.txt : 20080908
<SEC-HEADER>0001013762-05-000747.hdr.sgml : 20080908
<ACCEPTANCE-DATETIME>20050616171903
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ACCESSION NUMBER:		0001013762-05-000747
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20050616

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			APPLIED DNA SCIENCES INC
		CENTRAL INDEX KEY:			0000744452
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				592262718
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		25 HEALTH SCIENCES DRIVE
		STREET 2:		SUITE 113
		CITY:			STONY BROOK
		STATE:			NY
		ZIP:			11790
		BUSINESS PHONE:		631 444 6861

	MAIL ADDRESS:	
		STREET 1:		25 HEALTH SCIENCES DRIVE
		STREET 2:		SUITE 113
		CITY:			STONY BROOK
		STATE:			NY
		ZIP:			11790

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PROHEALTH MEDICAL TECHNOLOGIES INC
		DATE OF NAME CHANGE:	20010504

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DCC ACQUISITION CORP
		DATE OF NAME CHANGE:	19990211

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DATALINK CAPITAL CORP/TX/
		DATE OF NAME CHANGE:	19980306
</SEC-HEADER>
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<FILENAME>filename1.txt
<TEXT>

                           Applied DNA Sciences, Inc.
                       9229 W. Sunset Boulevard, Suite 830
                          Los Angeles, California 90069

================================================================================

June 16, 2005

VIA EDGAR AND FEDERAL EXPRESS

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC  20549

         Attn:    Jeffrey Riedler, Assistant Director
                  Division of Corporation Finance

                  Albert Lee, Esq.

         Re:      Applied DNA Sciences, Inc.
                  Amendment No. 1 to Registration Statement on Form SB-2
                  File No. 333-122848
                  Amended Registration Statement filed April 29, 2005

Ladies and Gentlemen:

     The following  responses address the comments of the reviewing Staff of the
Commission  as set forth in a comment  letter  dated May 23, 2005 (the  "Comment
Letter") relating to Amendment No. 1 to the Registration  Statement on Form SB-2
(the  "Registration  Statement") of Applied DNA Sciences,  Inc. (the "Company").
The answers set forth herein refer to each of the Staffs' comments by number.

     We are  filing  herewith  Amendment  No.  2 to the  Company's  Registration
Statement.

FORM SB-2
- ---------

General
- -------

1.        Please  revise to include a table of contents  pursuant to Item 502 of
          Regulation S-B.

          Response
          --------
          We have revised our prospectus to include a table of contents pursuant
          to Item 502 of Regulation S-B.

<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 2 of 11


2.        Supplementally, please confirm if Rick Langley of RHL Management, Inc.
          is Richard Langley Jr.

          Response
          --------
          We hereby confirm that, to the best of our knowledge,  Rick Langley of
          RHL Management, Inc. is Richard Langley Jr.

3.        Prior to requesting  acceleration for  effectiveness,  please consider
          Item  310(g) of  Regulation  S-B and,  as  necessary,  file an amended
          registration  statement  on Form  SB-2 to  include  your  most  recent
          interim financial  statements as of and for the period ended March 31,
          2005. In doing so,  please also file as an exhibit an updated,  signed
          consent report from your independent accountants.

          Response
          --------
          We have revised our prospectus to include the financial statements for
          the quarter ended March 31, 2005 as well as obtained a revised consent
          from our independent registered public accounting firm.

Risk Factors
- ------------

The Biomedical  Research Products Industry is Very Competitive, and We.. page 11
- --------------------------------------------------------------------------------

4.        We note your  response to comment 19 and reissue the  comment.  To the
          extent that market data information is available, please disclose your
          competitors' respective shares of your target market.

          Response
          --------
          We have revised our  disclosure to indicate that although we still are
          not aware of the total  market  size,  we have  disclosed  some of our
          competitors' revenues that we have been able to determine.

Managements  Discussion  and  Analysis  of  Financial  Condition  and Results of
Operations and Plan of Operation
- --------------------------------------------------------------------------------

Intellectual Property Development Product Operations & Partnerships, page 19
- --------------------------------------------------------------------------------

5.        We note your  response  to comment 33 and reissue the comment in part.
          Notwithstanding your amended disclosure,  please revise the discussion
          to state that management  believes  Applied DNA uses highly  reputable
          outside labs. In this regard, please tell us supplementally the extent
          to which you have  utilized  the  services  of labs  other  than Idaho
          National Laboratory. We may have additional comments.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 3 of 11

          Response
          --------
          We have  revised our  disclosure  to state that we believe that we use
          highly reputable outside labs. We utilize Idaho national  laboratories
          approximately 75% of the time, Biowell laboratories  approximately 20%
          of the time,  and Charles River  laboratories,  a contract  laboratory
          located in Horsham, Pennsylvania, approximately 5% of the time.

Liquidity and Capital Resources, page 21
- ----------------------------------------

6.        We  acknowledge  your  response  to  comments 37 and 38 per our letter
          dated March 15, 2005.  However,  we believe that Instruction 1 to Item
          303 of  Regulation  S-B requires  disclosure  regarding  the impact of
          material  items that affect or will affect your results of operations.
          Please also refer to  Interpretation;  Commission  Guidance  Regarding
          Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations Release Nos. 33-8350;  34-48960;  FR-72.  Please
          then expand your  disclosure  to address the increase in your accounts
          payable and accrued  liabilities for the year ended September 30, 2004
          and the three months ended  December  31, 2004.  Additionally,  please
          include a discussion  of your  arrangement  with  Biowell  Technology,
          specifically  addressing the impact that the minimum  purchase  orders
          will have on your  results  of  operations  and cash flows in the near
          term.

          Response
          --------
          The  Registrant  has reviewed  Instruction 1 to Item 303 of Regulation
          S-B and believes the instruction  applies to issuers who have reported
          revenues from operations in each of the last two (2) years.

          The  Instruction  requires  Registrants  to provide a "discussion  and
          analysis"  focusing  specifically on material events and uncertainties
          known to management  that would cause reported  financial  information
          not to be necessarily indicative of future operating results or future
          financial condition

          The  Registrant  does not provide a  "discussion  and analysis" of its
          results of operations and financial  condition.  As previously stated,
          the  Registrant is a small  business  issuer that has not had revenues
          from operations in each of the last two fiscal years. As a result, the
          Registrant continues to believe it has met the disclosure requirements
          of Item 303 (a) and (c) and is not required to provide the information
          requested by Instruction 1.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 4 of 11

          The  Registrant  acknowledges  that once revenues from  operations are
          generated, the Company shall comply with the reporting requirements of
          Item 303 (b) of Regulation S-B and provide the information required by
          Instruction 1.

Business
- --------
Overview, page 26
- -----------------

7.        We note your  statement,  "[w]e have a very  seasoned and  experienced
          management team." Please revise this and similar disclosure throughout
          the  prospectus  to indicate it is your belief and revise so as not to
          present  the  statements  as fact.  For example we note on page 33 you
          state  that  management  and the board have a "unique  combination  of
          skills for providing integrated DNA  anti-counterfeit..." In addition,
          you reference  experience totaling more than 100 years in the areas of
          anti-counterfeiting  technology,  microchip technology,  security...."
          Please provide a breakdown of management's  experience in the areas of
          anti-counterfeiting  technology  and security,  respectively,  as this
          experience is not apparent from the background  information  provided.
          We may have additional comments.

          Response
          --------
          We have revised our  disclosure  throughout the prospectus to indicate
          that it is our belief  that we have an  experienced  management  team.
          Furthermore,  we have provided a breakdown of the combined  experience
          of our officers and directors to provide  back-up to our claim that we
          have an experienced management team.

8.        We note your response to comment 41. Please revise your  disclosure to
          describe  the  effects of not closing on the  acquisition  of Biowell.
          Additionally,  please include a stand alone risk factor addressing the
          unlikely  acquisition  of Biowell  and the  consequences  should  this
          occur. We may have further comments.

          Response
          --------
          We have revised our  disclosure to discuss the pending  acquisition of
          Biowell's  technologies,  including  the effects of not closing on the
          acquisition.  In  addition,  we have added a stand  alone risk  factor
          discussing  the risks to us in the  event  that we do not close on the
          acquisition.

9.        We note your  response to comment 49. Please file the  Memorandums  of
          Understanding you refer to in your revised disclosure.

          Response
          --------
          Upon  reviewing  our  files,  we  determined  that  we  only  had  two
          memorandums  of  understanding  and  that  both  have  since  expired.
          Therefore  we have  removed all  references  to these  memorandums  of
          understanding or agreements between us.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 5 of 11

10.       We note the Biowell license agreement has been suspended.  Please file
          this  modification  agreement  and other  revisions  to this  material
          agreement as exhibits.

          Response
          --------
          We have filed the letter  agreement  between  the  Company and Biowell
          Technology  Inc.  agreeing  to  suspend  payments  under  the  license
          agreement.

11.       Please  expand  the  discussion  to provide  additional  clarification
          concerning  how you  derive  income  from the  Biowell  agreement.  It
          appears  that in order to  maintain  the  license you have to submit a
          certain amount of purchase orders to Biowell. Does Biowell fulfill the
          orders?  How are you compensated  and on what basis? In addition,  the
          minimum  orders  necessary  to  maintain  the  license is less than $2
          million  in.  the  aggregate  for the  first  five  years.  Is this an
          indication  of the  anticipated  market for the  product?  If so, your
          business and MD&A sections  should be expanded to explain this and how
          you anticipate generating profits.

          Response
          --------
          We have revised our  disclosure  to indicate  that we place the orders
          with  Biowell  who  fulfills  the order.  We charge  our  clients at a
          premium to our cost from Biowell,  which is how we derive our revenue.
          We further  revised our  disclosure to indicate that the $2 million in
          aggregate  purchase  orders for the first five years of the license is
          not an indication of the market for the products,  but a consideration
          of what is involved in the establishment of a new business product.

12.       We  note  the  Biowell  agreement  can  be  terminated  under  certain
          conditions several of which appear to be applicable, including failure
          to make minimum payment guarantees and insolvency. Please describe the
          steps  you have  taken to cure any  breach  of the  agreement  and the
          manner in which the  original  agreement  may have been  modified.  In
          addition,  in view of the  large  number of  shares  issued  since you
          originally   entered   into  the   Biowell   agreement,   please  tell
          supplementally  why there has not been a change of control which would
          also result in a breach of the agreement.

          Response
          --------
          We have revised our disclosure to indicate that all payments due or to
          become  due  under  the  license  agreement  have  been  suspended  in
          contemplation of the proposed  acquisition.  With regards to potential
          breaches  for  insolvency  or change of  control,  although  our debts
          exceed our  assets,  we have not  ceased  paying our debts and we have
          been able to meet our debts as they become due.  When we executed  the
          license  agreement,  our  liabilities  exceeded  our assets and it was
          understood  between  the  parties  that such would not  change.  Also,
          although  we have  issued  more  than 50% of our  stock in a number of
          unrelated  transactions,  which could conceivably  trigger a change of
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 6 of 11

          control,   most  of  those  shares  were  issued  in  connection  with
          conditions we  negotiated  with Biowell for the  acquisition  of their
          technology.  For example,  conditions  precedent to the acquisition of
          the Biowell technology was the raising of over $5 million in a private
          placement and the elimination of all our debt, which were done through
          the issuance of a significant number of shares.

13.       We note your  response to comment 48 and  reissue  the comment  Please
          expand the discussion in the business  section to address the projects
          referred to in "Product  research and  development" on page 20. We may
          have additional comments.

          Response
          --------
          We have expanded our  disclosure  to provide full and fair  disclosure
          regarding our research and development projects.

Giuliani Partners, page 36
- --------------------------

14.       Supplementally,  please  tell  us why  your  agreement  with  Giuliani
          Partners was terminated on April 11, 2005.

          Response
          --------
          As stated in our  disclosure  and in the  termination  agreement,  the
          decision to terminate the agreement with Giuliani Partners was mutual.
          We felt that the agreement was no longer in our best  interests and we
          discussed  the matter with Giuliani  Partners,  who agreed that it was
          best for both parties to mutually terminate the agreement.

15.       Please file the  settlement  agreement  with  Giuliani  Partners as an
          exhibit.

          Response
          --------
          We have incorporated the filed settlement agreement as an exhibit.

Management, page 38
- -------------------

16.       We note your  response  to comment 54 and reissue the comment in part.
          Please  note  that  Item  401  of  Regulation  S-B  requires  a  brief
          description of the business  experience of your officers and directors
          during each of the last five years.  Currently,  you have gaps of time
          for one or more executive officers,  please account for all periods of
          time within the last five years. Additionally, your disclosure in this
          section is difficult and cumbersome to read,  please revise to clearly
          describe their chronological employment histories.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 7 of 11

          Response
          --------
          We have revised our disclosure to provide a brief business description
          for all of our  officers  and  directors  during the last 5 years,  in
          accordance  with  Item 401 of  Regulation  S-B.  We have  made sure to
          account  for all  periods  of time  within  the five year time  frame.
          Additionally,  we have  changed  around the format to provide the same
          format for each person, which includes their current position with the
          Company,  and the information for the last five years in chronological
          format, from earliest to latest.

Financial Statements
- --------------------

Consolidated Statements of Losses, pages F-3 and F-36
- -----------------------------------------------------

17.       We acknowledge  your response to comment 64 per our letter dated March
          15, 2005. We note your  reference to Regulation  S-X. We  respectfully
          refer you to Article  5-03  (b)(2) and  (b)(3) of  Regulation  S-X and
          request  that  you  revise  your  statements  of  operations  for  the
          applicable periods presented to separately classify amounts related to
          consulting services.  Additionally, we believe the license fee paid to
          Biowell  Technologies  represents a research and development  cost and
          should be disclosed separately on your statements of operations. Refer
          to paragraphs 11 (c) and 13 of SFAS No. 2 and industry practice.

          Response
          --------
          We filed our  Annual  Report on SEC Form  10-KSB  in  accordance  with
          Regulation  S-B. As a small  business  issuer,  we are not required to
          prepare  financial   statements  in  accordance  with  the  disclosure
          requirements   of  Regulation  S-X  (Item  310  of  Regulation   S-B).
          Accordingly,  separately  classifying  amounts  related to  consulting
          services and separately  disclosing fees paid to Biowell Technologies,
          Inc. is not required.

Note A- Summary of Accounting Policies, page F-16
- -------------------------------------------------

18.       We acknowledge  your response to comment 65 per our letter dated March
          15, 2005. Per your revised disclosure presented on page 23, it appears
          that you have incurred research and development expense for the period
          ended December 31, 2004. Please revise your disclosure to clarify your
          accounting  policy with respect to research and  development  expense.
          Additionally,  please  revise your  statement  of  operations  for the
          period ended  December 31, 2004 to  separately  classify  research and
          development expense.  Refer to paragraph 13 of SFAS No. 2 and industry
          practice.

          Response
          --------
          The revised  disclosure on page 23 focuses on  prospective  research &
          development  activities,  subject to obtaining  financing.  We did not
          incur any material  research and development  expenditures  during the
          quarter ended December 31, 2004.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 8 of 11

          Our  policy  for  accounting  for  research &  development  costs,  as
          disclosed in our  September  30, 2004 Annual Report of SEC Form 10-KSB
          is as follows:

          The Company accounts for research and development  costs in accordance
          with the Financial Accounting Standards Board's Statement of Financial
          Accounting  Standards No. 2 ("SFAS 2"),  "Accounting  for Research and
          Development  Costs.  Under SFAS 2, all research and development  costs
          must be charged to expense as incurred. Accordingly, internal research
          and development costs are expensed as incurred.  Third-party  research
          and developments  costs are expensed when the contracted work has been
          performed    or   as   milestone    results   have   been    achieved.
          Company-sponsored  research  and  development  costs  related  to both
          present and future products are expensed in the period  incurred.  The
          Company  did not incur any  research  and  development  expenses  from
          September 16, 2002 (date of inception) through September 30, 2004.

          We anticipate  expending  material amounts on research and development
          activities and agree to separately  classify and disclose research and
          development expenses in future filings.

          We believe  our policy  accounting  for and  disclosing  research  and
          development  costs is reasonable and complies with current  accounting
          principles generally accepted in the US.

Note D- Capital Stock, page F-22
- --------------------------------

19.       We acknowledge  your response to comment 66 per our letter dated March
          15,  2005.  Please  clarify  in the  filing:  the  period in which the
          services were  rendered;  the period in which you recorded the related
          expense in the financial statements; and your basis for recording each
          amount in the applicable period.

          Response
          --------
          We have  amended  our  disclosure,  under  the  "Costs  and  Expenses"
          disclosure  in the  Management's  Discussion  and Analysis and Plan of
          Operations, to include the following sentence:

          We record  the  equity-based  compensation  expense  in the period the
          services  are  rendered  based upon the value of the fair value of our
          shares issued.

20.       We acknowledge  your response to comment 69 per our letter dated March
          15, 2005. Please clarify for us, supplementally,  the measurement date
          used to determine  the fair value of the 1.5 million  shares of common
          stock  issued to Biowell  Technologies  in January  2003.  As you have
          stated that the fair value of the  license  did not differ  materially
          from the value of the stock issued, please compare the fair value used
          in the issuance of stock for the license to the fair value used in the
          same  period for other  transactions  and tell us why you  believe the
          value assigned is appropriate.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 9 of 11

          Response
          --------
          We were  formed in  September  2002 and were  capitalized  solely with
          nominal  advances from our founders.  We had no book value, nor market
          value.  One of our founders had developed a relationship  with Biowell
          and  negotiated  the outline of a license  agreement at our inception.
          The Agreement was formalized in January 2003. We used the January 2003
          period to value the  1,5000,000  shares of our common  stock issued to
          Biowell in exchange for the license agreement.  The shares were valued
          at $.065 per share.

          During the  quarter  ended  December  31,  2004,  we issued  shares to
          non-employees  for services at an amount equal to $.065 per share.  In
          addition,  we  received a  subscription  for our  common  shares at an
          amount equal to $.065 per share during the same period.

          Accordingly,   the  value  we  assigned   the  license   agreement  is
          reasonable,   appropriate   and  complies   with  current   accounting
          principles generally accepted in the US.

Condensed Consolidated Financial Statements (Unaudited)
- -------------------------------------------------------

Condensed Consolidated Statement of Cash Flows, page F-48
- ---------------------------------------------------------

21.       We acknowledge  your response to comment 71 per our letter dated March
          15, 2005.  Please  clarify for us,  supplementally,  why you appear to
          have  recorded  $642,098  of expense in a period  prior to the related
          non-employee's performance of services.  Additionally,  please clarify
          whether you  retained all or a portion of the shares under the service
          contract with this non-employee.

          Response
          --------
          We recorded the issuance of the shares and the related  expense in the
          period  because we believed  the  services  were either  performed  or
          substantially performed.  Upon further inquiry,  management determined
          the  non-employee  had not fulfilled the agreed upon scope of the work
          and we canceled the previously issued shares.

          We  acknowledge  we  canceled  all of the  shares  under  the  service
          contract with the non-employee.

<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 10 of 11

Notes to Unaudited Condensed Consolidated Financial Statements
- --------------------------------------------------------------

Note F- Convertible Promissory Notes Payable, page F-63
- -------------------------------------------------------

22.       Please clarify for us, supplementary, your use of volatility of 15% in
          calculating  the  relative  fair values of the  convertible  notes and
          warrants  for  the  December   2004   financing  of  $1,465   million.
          Specifically  address  your use of an average  six-day  period for the
          December 2004 transaction,  as compared to a 90-day average period for
          the February 2005 transaction.  Additionally, please clarify, for both
          transactions,  your use of an average/weighted average share price, as
          EITF 98-5 prescribes usage of the share price at the commitment date.

          Response
          --------
          We chose the  six-day  average  period  for  purposes  of  calculating
          volatility for the December 2004 transaction  based on our estimate of
          the  anticipated  future  volatility  of our common  stock  during the
          respective projected term of the convertible debenture

          Subsequently,  in calculating volatility for the February transaction,
          we noted our share's volatility increased and as a result, we selected
          a 90-day average period for purposes of calculating volatility.

          We acknowledge we consulted the provisions of EITF 98-5, comparing the
          commitment  dates and our weighted  average share price in calculating
          the beneficial  conversion feature.  Given the number of transactions,
          we determined the share price at the various  commitment  dates(1) did
          not differ  materially from the weighted average share price utilized.
          The beneficial  conversion  feature (or intrinsic  value) exceeded the
          proceeds from the issuance of the convertible  debt and was charged to
          operations as interest  expense  during the periods ended December 31,
          2004 and March 31, 2005, respectively.

Note I- Commitments and Contingencies, page F-66
- ------------------------------------------------

23.       Refer to the additional disclosure added in response to comment 72 per
          our letter dated March 15,  2005.  Please then clarify that you record
          consulting expenses as the related services are rendered.

          Response
          --------
          We follow  the policy of  charging  the costs of  consulting  services
          expenses  rendered.  We believe our policy  accounting  for consulting
          service   transactions   is  reasonable   and  complies  with  current
          accounting principles generally accepted in the US.
<PAGE>
Securities and Exchange Commission
June 16, 2005
Page 11 of 11

     We trust that the  foregoing  appropriately  addresses the issues raised by
your recent  Letter of Comment.  Thank you in advance for your prompt review and
assistance.

                                           Very truly yours,

                                           /s/ ROB HUTCHISON
                                           -----------------
                                           Rob Hutchison
                                           Chief Executive Officer




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