Dow Jones 12853.09 +117.78 2:02 pm PST, January 10, 2008 NASDAQ 2488.52 +13.97 For info, visit access.smallcapnetwork.com S & P 500 1420.33 +11.20 Change your subscription status here Russell 2000 720.21 +8.09 VOLUME 08 : ISSUE 4 Applied DNA - Five Down, One To Go As easy as it could have been to lose Applied DNA's (OTCBB: APDN) announcement today in all the market's noise (and there's been plenty of it lately), I really think the recent chapters in the company's history are pointing to a happy ending. Applied DNA just announced they've received two more milestone payments from Supima - an alliance made up of American Pima cotton growers.  If I was a new-comer to APDN and didn't know when or why the first three payments were made, I probably wouldn't bother trying to find out the rest of the story. That would be a mistake on my part though, as a little homework reveals there's an interesting trail of success here. Don't worry if you missed those prior homework assignments on Applied DNA - we've got the CliffsNotes to get you caught up.   What's The Big Deal? Pima is a superior type of cotton compared to other types of cotton (such as upland). Though you or I probably couldn't tell the difference unless we knew specifically to look for it, it's a huge deal to Supima. After all, the quality of cloth made from real pima cotton is their bread and butter. If anybody can call their cotton 'pima cotton', the quality of the resulting fabric - not to mention the price premium they deserve - comes into question.  Long story made short, Supima needs a way to protect itself and its good name. The problem is, how do you actually track down where cotton came from or what species of plant it came from? The inability to do so has cost true pima growers countless dollars for decades.  As it turns out, it looks like it is entirely possible to figure out whether cotton is pima cotton or not. Through the miracle of modern science - and Applied DNA's brilliant efforts - a way to make such a distinction is nearing the end of its development.    Back At The Ranch... So what's this got to do with today's news? A lot, actually. Back in July of 2007, a presumably fed-up Supima organization approached Applied DNA in search of a way to effectively put an end to what is essentially product piracy. Applied DNA certainly had the technical know-how to come up with a solution, but it wasn't quite what they were working on at the time; up until then, Applied DNA had been focused on tweaking its own proprietary DNA marker call Signature DNA (tm). Realizing the potential win-win, Supima agreed to fund the research and development process for a pima cotton authentication tool, and Applied DNA agreed to work on its development. The general terms of the deal were for Supima to provide funding out of their own pocket as long as Applied DNA reached specific milestones in the development of the anti-counterfeit technique. Here's the interesting part though (and this is where investors are probably going to have an 'aha' moment) ...Supima could have pulled the plug at any time if any milestone was not met satisfactorily.  Like the news release says (below), they just booked their fourth and fifth milestone payments. All well and good, but I don't know how many investors realize the deal only calls for six milestone payments. In other words, they're 83% down the road to the end-goal. Applied DNA thinks the successful creation of this fiber authentication tool could mean up to $1 million in annual sales to the Supima organization. That in itself is pretty exciting for this young company. However, I'm just as excited about something else....the expertise and knowledge they gained that somebody else paid for. Even if the pima R&D doesn't get commercialized (though I'm pretty sure it will), the company has opened up another potential revenue door with fiber authentication.    Your Dollars At Work And what does all this mean to current or potential owners?  My three opinions on a stock's valuation never change for any company...  Eventually, a stock will be priced at what it's worth relative to the company's performance  Stocks trade based on their perceived potential, not their history  Short-term volatility creates mispricing/opportunity  So the question is, is APDN worth 10 cents as the nearby chart indicates? Only time will really tell, but personally, I think the market may be underestimating the company's long-term potential.  To take you back to something I said when we first issued our coverage of Applied DNA, product piracy and counterfeiting costs the world's legitimate companies an estimated $600 billion per year. Conservatively assuming they'd be willing to spend just 1% of that total to substantially cut some of that $600 billion figure, the industry's players could still be jockeying for $6 billion worth of business.  Now, assuming Applied DNA only captures 1% of that estimated $6 billion, we're still talking about a possible $60 million worth of sales. I don't want to call that a specific projection, but I believe the size and scope of the potential is on target...meaning I think Applied DNA is looking at multi-million dollar opportunities.  Will they be doing that kind of business tomorrow? No. It may take a few months or even years to really get a grip on what kind of dollars APDN could draw. But, considering the company's market cap is only about $16.0 million right now, I have to admit I'm getting real interested again. I'll be watching these guys real closely over the next few weeks, seeing how well they can build on this news. I think a good news-based shove could spark some new life for the stock. To that end, I'll be watching the stock real closely over the next few days. We've started to see more up than down in just the last couple few trading sessions, so maybe some potential APDN buyers are testing the water.  Here's the press release.   Applied DNA Sciences Receives Milestone Payments from Supima Company to Exhibit at Supima Trade Show January 22-24, 2008  STONY BROOK, N.Y.--(BUSINESS WIRE)--Applied DNA Sciences, Inc. (OTC Bulletin Board: APDN), a provider of DNA-based security solutions, today announced that it has received the fourth and fifth milestone payments from Supima, the promotional organization of the American Pima cotton growers. These payments are the result of Applied DNA Sciences successively achieving the goals set out in the fiber authentication program begun in July 2007.  "Applied DNA Sciences has been able to accomplish what we believe no other group has been able to do, successfully amplify DNA from mature cotton cultivars. Our scientists have developed new extraction protocols which improved DNA isolation more than one thousand times over the traditional forensic methods. We analyzed the cotton nuclear and chloroplast genomes to develop an assay which identifies the difference between Pima and upland cotton," stated Dr. James Hayward, President and CEO of Applied DNA Sciences. "Remarkably, the cell walls of cotton are so protective, that the DNA markers may still be detected in finished textiles that have been extensively laundered. We believe that the findings to-date may also have utility for other textile industries throughout the world and could assist governments looking for a quantifiable means of regulating the importation of foreign textiles into their countries. APDN has already begun to explore the use of these findings in various different venues. We expect significant growth for APDN within the textile industry vertical."  The feasibility study should yield authentication methods to identify and confirm the Supima cotton content of branded apparel and home fashion products. There is only one milestone payment remaining and APDN and Supima are working together to complete the study and publicize and commercialize the results of this groundbreaking work. To that end, APDN will attend the Supima Premium Fabric Show in New York City on January 22, 2008 where we will present the results of our feasibility study to date and the authentication program that would follow the expected successful completion of the feasibility study. This Supima authentication program would allow APDN to distinguish between American Pima cotton cultivars and other types of cotton and could represent annual revenues of up to $1 million to APDN.  Cotton classification and the authentication of cotton geographic origin are issues of global significance, important to brand owners and to governments that must regulate international cotton trade. The development of genetic methods to identify the cotton fiber content of finished textiles is a significant opportunity for license holders to control their brand and for governments to improve their ability to enforce compliance with trade agreements between nations. About Applied DNA Sciences, Inc.  Applied DNA Sciences markets and sells DNA encrypted and embedded solutions that are forensically authenticated by machine readable devices. These solutions can be easily integrated with a range of inks, threads, varnishes, adhesives as well as thermal ribbon, inkjet and laser ink. Applied DNA Sciences' products can help protect the brands and intellectual property that can easily be eroded by counterfeiting, product diversion and fraud. APDN's common stock is listed on the Over-The-Counter Bulletin Board under the symbol "APDN".  The statements made by APDN may be forward-looking in nature and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe APDN's future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of APDN. Actual results could differ materially from those projected due to our short operating history, limited financial resources, limited market acceptance, market competition and various other factors detailed from time to time in APDN's SEC reports and filings, including our Annual Report on Form 10-KSB, filed on January 16, 2007 and our subsequent quarterly reports on Form 10-QSB. APDN undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date hereof to reflect the occurrence of unanticipated events.  Contact:  Applied DNA Sciences, Inc.  Debbie Bailey, 631-444-8090  fax: 631-444-8848  info@adnas.com  http://www.ADNAS.com Source: Applied DNA Sciences, Inc.    We Value Your Feedback   Got comments, questions or suggestions? Send 'em on over: Email the Editor If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130 BioCurex Signs Another RECAF Licensee Color me clairvoyant, but I suspected this - or something like it - was around the corner for small cap biotech company BioCurex (OTCBB: BOCX). Like I said in my Top Ten Predictions for 2008 edition, the company's deafening silence was the tip-off that something big was brewing...they have a real hot and cold streak going with their publicity effort. Yesterday morning we learned that the rumor of a new RECAF licensee wasn't just a rumor.  Inverness Medical Innovations (NYSE: IMA) is RECAF's newest front man. They'll be joining Abbott Labs (NYSE: ABT) as a licensee, and in some ways competing with them. The Inverness deal will let them market all uses of the RECAF technology...the ones very close to being ready, and the ones not even close to being ready. (As a reminder, the 'quick-test' cancer screener has already been proto-typed, and is undergoing some final tweaking.)  More importantly, the agreement will not only mean royalty payments once sales start, but some up-front fees and R&D milestone payments are part of the deal too. No word on how much, but any revenue at all would be big for BioCurex - which doesn't have a revenue-bearing product just yet.  Though I don't see this as an immediate game-changer, the rest of the market seems to. The stock is up 20% in just the last couple of days. I also have to think the 45%+ improvement on December's lows of 53 cents is also related to the news.  In the long run - and assuming RECAF does actually make it to commercialization in some form - this is huge for BioCurex and its shareholders.  Here's the press release, and here's the chart. Subscribe Information is power and timely information is profitable. 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