UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

 Quarterly Report Pursuant to Section 13 Or 15(D) Of The Securities Act Of 1934

                  For the quarterly period ended June 30, 2004

                       Commission file number: 002 90 539

                           APPLIED DNA SCIENCES, INC.

        (Exact name of small business issuer as specified in its charter)



           NEVADA                                         59-2262718
(State or other jurisdiction of                         (IRS Employee
 incorporation or organization)                        Identification No.)


          9229 West Sunset Boulevard, Suite 830, Los Angeles, CA 90069
                    (Address of principal executive offices)

                                 (310) 860-1362
                           (Issuer's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

Yes X No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

Common Stock, $0.50 par value 22,088,554
(Class) (Outstanding as of June 30, 2004)

<PAGE>
                                Table of Contents

PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements (Unaudited)

         Item 2.  Management's Discussion and Analysis or Plan of Operation

         Item 3.  Controls and Procedures

PART II.  OTHER INFORMATION

         Item 1.  Legal Proceedings

         Item 2.  Changes in Securities

         Item 3.  Defaults Upon Senior Securities

         Item 4.  Submission of Matters to a Vote of Security Holders

         Item 5.  Other Information

         Item 6.  Exhibits and Reports on Form 8-K

         Signatures

                                       2
<PAGE>
ITEM 1.  Financial Statements

                             APPLIED DNA SCIENCES, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   JUNE 30, 2004
                                     (Unaudited)
<TABLE>
<CAPTION>
                                       ASSETS
 Current assets:
<S>                                                                             <C>
 Cash and Equivalents                                                           $          -
                                                                                -------------
    Total Current Assets                                                                   -

    Property, Plant and Equipment -
    net of accumulated depreciation of $1,054                                         28,453

 Other Assets:
    Deposits and Other Assets                                                         23,559
    Patent Filing                                                                     32,647
                                                                                -------------
                                                                                      56,206
                                                                                -------------
    Total Assets                                                                  $   84,659
                                                                                =============

                 LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY

 Current Liabilities:
    Cash Disbursed in Excess of Available Funds                                 $     17,870
    Accounts Payable and Accrued Liabilities                                         567,477
    Accrued Liabilities Due Related Parties (Note C)                                 117,333
    Convertible Notes Payable(Note F)                                              1,219,444
    Due to Related Parties (Note C)                                                  109,943
                                                                                -------------
    Total Current Liabilities                                                      2,032,067

 Note Payable                                                                         88,500

 Commitments and Contingencies

 Deficiency in Stockholders' Equity:
    Preferred Stock, par value $.0001 per share; 10,000,000 shares authorized;
    none issued.
    Common Stock, par value $.50 per share; 100,000,000 shares authorized;
    22,088,544 shares issued and outstanding                                      11,044,277
    respectively.
    Common Stock Subscription                                                         (1,000)
    Additional Paid-In-Capital                                                     2,587,853
    Deficit accumulated during development stage                                 (15,667,038)
                                                                                -------------
                                                                                  (2,035,908)
                                                                                -------------
       Total Liabilities and Deficiency in Stockholders' Equity                 $     84,659
                                                                                =============

 (See accompanying notes to unaudited condensed consolidated financial statements)

</TABLE>
                                       3
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   CONDENSED CONSOLIDATED STATEMENTS OF LOSSES
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                       For the Period,
                                         For The Three Months Ended      For The Nine Months Ended    September 16, 2002,
                                                 June 30,                          June 30,         (Inception Date) through
                                          2004              2003            2004             2003        June 30, 2004
                                     -------------    -------------    --------------   --------------   --------------
Revenues:
<S>                                  <C>              <C>              <C>              <C>              <C>
Sales                                $          -     $          -     $           -    $           -    $           -

COGS                                            -                -                 -                -                -

Operating expenses:
Selling, general and administrative     1,672,449          325,881        10,989,349          922,897       14,469,324
Depreciation and amortization                 351                -             1,053                -            1,053
                                     -------------    -------------    --------------   --------------   --------------
Total operating expenses                1,672,800          325,881        10,990,402          922,897       14,470,377

Operating loss                         (1,672,800)        (325,881)      (10,990,402)        (922,897)     (14,470,377)

Other Income (expense)                          -                -             1,385                -           26,385
Interest (expense)                       (558,333)               -        (1,221,245)               -       (1,223,046)
Income (taxes) benefit                          -                -                 -                -                -
                                     -------------    -------------    --------------   --------------   --------------

Net loss                             $ (2,231,132)    $   (325,881)    $ (12,210,262)   $    (922,897)   $ (15,667,038)
                                     =============    =============    ==============   ==============   ==============

Loss per common share
(basic and assuming dilution)        $      (0.10)    $      (0.02)    $       (0.61)   $       (0.05)
                                     =============    =============    ==============   ==============

Weighted average shares outstanding    21,350,449       16,796,442        20,164,783       16,796,442
                                     =============    =============    ==============   ==============

 (See accompanying notes to unaudited condensed consolidated financial statements)
</TABLE>

                                       4
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
     CONDENSED CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS` EQUITY
 For the period September 16,2002 (Date of incorporation) through June 30, 2004
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                            Deficit
                                                                                                           Accumulated
                                                                     Additional   Stock         Stock        During
                                           Common     Common Stock   Paid-In    Subscription  Subscription  Development
                                           Shares       Amount       Capital      Payable      Receivable     Stage       Total
                                           ------     ------------   -------    ------------  -------------   -----       -----
<S>                                         <C>            <C>         <C>          <C>               <C>    <C>            <C>
Issuance of common stock to
Founders in exchange for
services on September 16,
2002 at $0.01 per share                   $ 100,000        $ 10        $ 990         $ -          $ -            $ -      $ 1,000

Net Loss                                          -           -            -           -            -        (11,612)     (11,612)
                                        --------------------------------------------------------------------------------------------
Balance at September 30, 2002               100,000          10          990           -            -        (11,612)     (10,612)

Issuance of common stock in
connection with merger with
ProHealth Medical Technologies,
Inc., on October 1, 2002.                10,178,352       1,000            -           -            -             -        1,000

Cancellation of Common Stock
in connection with merger with
ProHealth Medical Technologies,
Inc., on October 21, 2002.                 (100,000)          -       (1,000)          -            -             -       (1,000)

Issuance of Common Stock in
exchange for services in October
2002 at $0.065 per share.                   602,000          60       39,070           -            -             -       39,130

Issuance of Common Stock in exchange
for subscription in November and
December 2002 at $0.065 per share.          876,000          88       56,852           -      (56,940)            -            -

Cancellation of Common Stock in
January 2003 previously issued in
exchange for consulting services.          (836,000)        (76)     (54,264)          -       54,340             -            -

Issuance of Common Stock in exchange
for licensing services valued at
$0.065 per share in January 2003.         1,500,000         150       97,350           -            -             -       97,500

Issuance of Common Stock in exchange
for consulting services valued at
$0.13 per share in January 2003.            586,250          58       76,155           -            -             -       76,213

Issuance of Common Stock in exchange
for consulting services at $0.065
per share in February 2003.                   9,000           1          584           -            -             -          585

Issuance of Common Stock to
Founders in exchange for services
valued at $0.0001 per share
in March 2003.                           10,140,000       1,014            -           -            -             -        1,014

Issuance of Common Stock in
exchange for consulting services
valued at $2.50 per
share in March 2003.                         91,060           9      230,625           -            -             -      230,634

Issuance of Common Stock in
exchange for consulting services
valued at $0.065 per share in
March 2003.                                   6,000           1          389           -            -             -          390

Common Stock issued in exchange for
cash at $1 per share in March 2003.               -           -       18,000           -            -             -       18,000

Common Stock issued in exchange for
consulting services at $0.065 per
share, April 1, 2003.                       860,000          86       55,814                        -             -       55,900

Common Stock issued in exchange for
cash at $1.00 per share, April 9, 2003.      18,000           2            -           -            -             -            2

Common Stock issued in exchange for
consulting services at $0.065 per
share, April 9, 2003.                         9,000           1          584           -            -             -          585


                                       5
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
     CONDENSED CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS` EQUITY
 For the period September 16,2002 (Date of incorporation) through June 30, 2004
                                   (Unaudited)

Common Stock issued in exchange for
consulting services at $2.50 per share,
April 23, 2003.                               5,000           1       12,499           -            -             -       12,500

Common Stock issued in exchange for
consulting services at $2.50 per
share, June 12, 2003.                        10,000           1       24,999           -            -             -       25,000

Common Stock issued in exchange for
cash at $1 per share on June 17 2003.        50,000           5       49,995           -            -             -       50,000

Common stock issued in exchange for
cash at $2.50 per share pursuant to
private placement on June 27, 2003.               -           -            -      24,000            -             -       24,000

Common stock retired in exchange for
note payable at $0.0118 per share,
June 30, 2003.                           (7,500,000)       (750)         750           -            -             -            -

Common stock issued in exchange for
consulting services at $0.065 per
share, June 30, 2003.                       270,000          27       17,523           -            -             -       17,550

Common stock subscribed in exchange
for cash at $1.00 per share pursuant
to private placement, June 30, 2003.              -           -            -      10,000            -             -       10,000

Common stock subscribed in exchange
for cash at $2.50 per share pursuant
to private placement, June 30, 2003.              -           -            -      24,000            -             -       24,000

Common stock issued in exchange for
consulting services at approximately
$2.01 per share, July 2003.                 213,060          21      428,797           -            -             -      428,818

Common stock canceled in July 2003,
previously issued for services
rendered  at $2.50 per share.               (24,000)         (2)     (59,998)          -            -             -      (60,000)

Common stock issued for options
exercised at $1.00 in July 2003.             20,000           2       19,998           -            -             -       20,000

Common stock issued for options
exercised at $1.00-subscription
payable-in July 2003.                        10,000           1        9,999     (10,000)           -             -            -

Common stock issued in exchange
for consulting services at
approximately $2.38 per share,
August 2003.                                172,500          17      410,913           -            -             -      410,931

Common stock issued for options
exercised at $1.00 in August 2003.           29,000           3       28,997           -            -             -       29,000

Common stock issued in exchange for
consulting services at approximately
$2.41 per share, September 2003.            395,260          40      952,957           -            -             -      952,997

Common stock issued in exchange
for cash at $2.50 per share-subscription
payable-September 2003.                      19,200           2       47,998     (48,000)           -             -            -

Common stock issued in exchange for
cash at $2.50 per share pursuant to
private placement September 2003.             6,400           1       15,999           -            -             -       16,000

Common stock issued for options
exercised at $1.00 in September 2003.        95,000          10       94,991           -            -             -       95,000

Common stock subscription receivable
reclassed -September 2003.                        -           -            -           -        2,600             -        2,600

Common Stock subscibed to at $2.50 per
share in September 2003.                          -           -            -     300,000            -             -      300,000

                                       6
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
     CONDENSED CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS` EQUITY
 For the period September 16,2002 (Date of incorporation) through June 30, 2004
                                   (Unaudited)


Net Loss                                          -           -            -           -            -    (3,445,164)  (3,445,164)
                                        --------------------------------------------------------------------------------------------
Balance at September 30, 2003.           17,811,082       1,781    2,577,566     300,000            -    (3,456,776)    (577,429)

Common stock issued in exchange for
consulting services at approximately
$2.85 per share, October 2003.              287,439          29      820,389           -            -             -     820,418

Common stock issued in exchange for cash
at $2.50 per share-subscription
payable-October 2003.                       120,000          12      299,988    (300,000)           -             -            -


Common stock canceled in October 2003,
previously issued for services rendered
at $2.50 per share.                        (100,000)        (10)    (249,990)          -            -             -     (250,000)

Common stock issued in exchange for
consulting services at approximately
$2.85 per share, November 2003.             100,000          10      299,990           -            -             -      300,000

Common stock subscribed in exchange for
cash at $2.50 per share pursuant to
private placement, November, 2003.          100,000          10      249,990           -            -             -      250,000

Common stock subscribed in exchange for
cash at $2.50 per share pursuant to
private placement, December, 2003.            6,400           1       15,999           -            -             -       16,000

Common stock issued in exchange for
consulting services at approximately
$2.59 per share, December 2003.           2,125,500         213    5,504,737           -            -             -    5,504,950

Common Stock subscribed to at $2.50 per
share in December 2003.                           -           -            -     104,000            -             -      104,000

Beneficial conversion feature relating
to notes payable.                                 -           -    1,168,474           -            -             -    1,168,474

Beneficial conversion feature relating
to warrants.                                      -           -      206,526           -            -             -      206,526

Adjust common stock par value from
$0.0001 to $0.50 per share,
per amendment of
articles dated Dec 2003.                          -  10,223,166  (10,223,166)          -            -             -            -

Common Stock issued pursuant to
subscription at $2.50 share in
Jan 2004.                                    41,600      20,800       83,200    (104,000)           -             -            -

Common stock issued in exchange for
consulting services at $2.95
per share, Jan 2004.                         13,040       6,520       31,948           -            -             -       38,468

Common stock issued in exchange for
consulting services at $2.60 per
share, Jan 2004.                            123,000      61,500      258,300           -            -             -      319,800

Common stock issued in exchange
for consulting services at
$3.05 per share, Jan 2004.                    1,000         500        2,550           -            -             -        3,050

Common stock issued in exchange
for employee services at $3.07
per share, Feb 2004.                          6,283       3,142       16,147           -            -             -       19,288

Common stock issued in exchange
for consulting services at $3.04
per share, Mar 2004.                         44,740      22,370      113,640           -            -             -      136,010

Common Stock issued for options
exercised at $1.00 per share in
Mar 2004.                                    55,000      27,500       27,500           -            -             -       55,000

Common stock issued in exchange
for employee services at $3.00
per share, Mar 2004.                          5,443       2,722       13,623           -            -             -       16,344


                                       7
<PAGE>

                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
     CONDENSED CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS` EQUITY
 For the period September 16,2002 (Date of incorporation) through June 30, 2004
                                   (Unaudited)

Common stock issued in exchange
for employee services at $3.15
per share, Mar 2004.                          5,769       2,885       15,293           -            -             -       18,177

Common stock issued in exchange
for consulting services at $3.00
per share, Mar 2004.                        125,000      62,500      312,500           -            -             -      375,000

Common stock issued in exchange
for employee  services at
$3.03 per share, Mar 2004.                    8,806       4,403       22,236           -            -             -       26,639

Common Stock issued pursuant
to subscription
at $2.50 per share in Mar 2004.              22,500      11,250       (9,000)          -            -             -        2,250

Beneficial Conversion Feature realting
to Notes Payable.                                 -           -      122,362           -            -             -      122,362


Benefical Conversion Feature relating
to Warrants.                                      -           -      177,638           -            -             -      177,638

Common stock issued in exchange for
consulting services at $2.58 per share,
Apr 2004.                                     9,860       4,930       20,511           -            -             -       25,441

Common stock issued in exchange for
consulting services at $2.35 per share,
Apr 2004.                                    11,712       5,856       21,667           -            -             -       27,523

Common stock issued in exchange for
consulting services at $1.50 per share,
Apr 2004.                                   367,500     183,750      367,500           -            -             -      551,250

Common stock returned to treasury at
$0.065 per share, Apr 2004.                 (50,000)    (25,000)      21,750           -            -             -       (3,250)

Common stock issued in exchange for
consulting services at $1.01 per
share in May 2004.                          100,000      50,000       51,250           -            -             -      101,250

Common stock issued per subscription
May 2004.                                    10,000       5,000       (4,000)          -       (1,000)            -            -

Common stock issued in exchange for
consulting services at $0.86 per
share in May 2004.                          137,000      68,500       50,733           -            -             -      119,233

Common stock issued in exchange for
consulting services at $1.15 per
share in May 2004.                           26,380      13,190       17,147           -            -             -       30,337

Common stock returned to treasury at
$0.065 per share, Jun 2004.                  (5,000)     (2,500)       2,175           -            -             -         (325)

Common stock issued in exchange for
consulting services at $0.67 per
share in June 2004.                         270,500     135,250       45,310           -            -             -      180,560

Common stock issued in exchange for
consulting services at $0.89 per
share in June 2004.                           8,000       4,000        3,120           -            -             -        7,120

Common stock issued in exchange for
consulting services at $0.65 per
share in June 2004.                          50,000      25,000        7,250           -            -             -       32,250

Common stock issued pursuant to
private placement at $1.00 per
share in June 2004.                         250,000     125,000      125,000           -            -             -      250,000

Net Loss                                          -           -            -           -            -   (12,210,262) (12,210,262)
                                       ---------------------------------------------------------------------------------------------
Balance at June 30, 2004                 22,088,554 $11,044,277   $2,587,853         $ -      $(1,000) $(15,667,038)  (2,035,908)
                                       =============================================================================================

(See accompanying notes to unaudited condensed consolidated financial statements)
</TABLE>

                                       8
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                               For the period
                                                                                                             September 16, 2002
                                                                                                           (inception date) through
                                                                      For The Nine Months Ended June 30           June 30,
                                                                          2004             2003                     2004
                                                                     ---------------  ---------------        ---------------
<S>                                                                         <C>           <C>                        <C>
Cash flows from operating activities:
Net loss from operating activities                                   $  (12,210,262)  $     (922,897)        $  (15,667,038)
Adjustments to reconcile net loss to net cash provided by
 (used in) operating activities:
   Depreciation                                                               1,054                -                  1,054
   Common stock retired                                                           -           88,500                 88,500
   Amortization of beneficial conversion feature                          1,219,444                -              1,219,444
   Common stock issued in exchange for consultant services rendered       8,918,032          557,003             11,496,957
   Common stock canceled-previously issued for services rendered           (285,575)               -               (285,575)
Increase in Assets and Liabilities:
   Prepaid Expenses and Deposits                                                  -          (15,275)                     -
   Other Assets                                                                   -           (4,220)                     -
   Accounts payable and accrued liabilities                                 113,477          155,551                567,595
   Cash disbursed in excess of available funds                               17,870                -                 17,870
                                                                     ---------------  ---------------        ---------------
     Net cash used in operating activities                               (2,225,960)        (141,338)            (2,561,193)

Cash flows from investing activities:
   Payments for Patent Filing                                               (18,758)               -                (32,648)
   Payments for security deposits                                           (23,559)               -                (23,559)
   Capital expenditures                                                     (29,507)               -                (29,507)
                                                                     ---------------  ---------------        ---------------
     Net cash used in investing activities                                  (71,824)               -                (85,714)

Cash flows from financing activities:
   Proceeds from sale of common stock, net of cost                                -                -                      -
   Proceeds from subscription of common stock                               354,000          116,000                536,000
   Proceeds from sale of options                                             87,000           10,000                241,000
   Advances from shareholders                                                34,004           93,980                109,943
   Proceeds from loans                                                    1,675,000                -              1,675,000
   Repayment of related parties advances                                    (33,653)               -                (22,317)
   Proceeds from related parties advances                                         -                -                107,282

     Net cash provided by financing activities                            2,104,313          219,980              2,646,908

     Net increase (decrease) in cash and cash equivalents                  (193,471)          78,642                      -

     Cash and cash equivalents at beginning of period                       193,471                -                      -
                                                                    ----------------  ---------------        ---------------
     Cash and cash equivalents at end of period                     $             -   $       78,642        $             -
                                                                    ================  ===============       ================

Supplemental Disclosures of Cash Flow Information:
   Cash paid during period for interest                             $             -   $            -                      -
                                                                    ================  ===============       ================
   Cash paid during period for taxes                                $             -   $            -                      -
                                                                    ================  ===============       ================
   Common stock issued for services                                 $     8,918,022   $      557,003        $    11,496,957
                                                                    ================  ===============       ================
   Common stock canceled-previously issued for services rendered    $      (285,575)                        $      (285,575)
                                                                    ================                        ================
   Common stock retired                                                               $       88,500        $        88,500
                                                                                      ===============       ================

   Amortization of benefical conversion feature                     $     1,219,444                         $    1,219,3444
                                                                    ================                        ================
   Common stock retained by ProHealth shareholders                  $         1,015                         $         1,015

   Asset acquired                                                              (135)                        $          (135)
                                                                    ---------------                         ----------------
   Organization Cost                                                $           880                         $           880
                                                                    ================                        ================


(See accompanying notes to unaudited condensed consolidated financial statements)
</TABLE>

                                       9
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003

NOTE A - SUMMARY OF ACCOUNTING POLICIES

General

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB,  and therefore,  do
not include all the information  necessary for a fair  presentation of financial
position,  results of  operations  and cash flows in conformity  with  generally
accepted accounting principles.

In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating results for the three-month and nine-month periods ended June 30, 2004
is not  necessarily  indicative of the results that may be expected for the year
ended  September  30,  2004.  The  unaudited  condensed  consolidated  financial
statements  should be read in  conjunction  with  September  30, 2003  financial
statements.

Business and Basis of Presentation

On  September  16,  2002,  Applied  DNA  Sciences,   Inc.  (the  "Company")  was
incorporated  under  the laws of the  State of  Nevada.  The  Company  is in the
development stage, as defined by Statement of Financial Accounting Standards No.
7 ("SFAS No. 7") and its efforts have been principally devoted to developing DNA
embedded  biotechnology  security  solutions in the United States.  To date, the
Company has generated  nominal  sales  revenues,  has incurred  expenses and has
sustained  losses.  Consequently,  its  operations  are subject to all the risks
inherent in the establishment of a new business enterprise.  For the period from
inception  through  June  30,  2004,  the  Company  has  accumulated  losses  of
$15,667,037.

The consolidated  financial  statements include the accounts of the Company, and
its wholly-owned  subsidiary  ProHealth Medical  Technologies,  Inc. Significant
inter-company transactions have been eliminated in consolidation.

Reclassification

Certain prior period amounts have been reclassified for comparative purposes.

Stock Based Compensation

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends SFAS No.  123,  "Accounting  for  Stock-Based  Compensation,"  to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee  compensation.  In addition,  this
statement  amends  the  disclosure  requirements  of  SFAS  No.  123 to  require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported  results.  The Company has chosen to continue to account
for stock-based  compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related  interpretations.  Accordingly,  compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the  Company's  stock at the date of the grant  over the  exercise  price of the
related option. The Company has adopted the annual disclosure provisions of SFAS
No. 148 in its financial  reports for the year ended  September 30, 2003 and for
the subsequent periods.

Had compensation  costs for the Company's stock options been determined based on
the fair value at the grant dates for the  awards,  the  Company's  net loss and
losses  per share  would  have been as  follows  (transactions  involving  stock
options issued to employees and Black-Scholes model assumptions are presented in
Note E / F):
<TABLE>
<CAPTION>
                                                                                                            From September
                                                                            For the nine months ended        16, 2002 (Date
                                                                                     June 30,               of Inception) to
                                                                              2004              2003         June 30, 2004
<S>                                                                       <C>               <C>              <C>
       Net loss - as reported                                             $(12,210,262)     $ (922,897)      $(15,667,037)

       Add: Total stock based employee  compensation  expense as
       reported under intrinsic value method (APB. No. 25)                           -               -                  -

       Deduct:  Total stock based employee  compensation expense as
       reported under fair value based method (SFAS No. 123)                         -               -                  -
                                                                          -------------     -----------      -------------
       Net loss - Pro Forma                                               $(12,210,262)     $ (922,897)      $(15,667,037)
                                                                          =============     ===========      =============
                                       10

<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003



       Net loss attributable to common stockholders - Pro forma           $(12,210,262)     $ (922,897)      $(15,667,037)
                                                                          =============     ===========      =============
       Basic (and assuming dilution) loss per share - as reported         $      (0.61)     $    (0.05)
                                                                          =============     ===========
       Basic (and assuming dilution) loss per share - Pro forma           $      (0.61)     $    (0.05)
                                                                          =============     ===========
</TABLE>

                                       11

<PAGE>

                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003

NOTE B - ACQUISITION  AND CAPITAL RESTRUCTURE

Acquisition

On  October  21,  2002,   the  Company   completed  a  Plan  and   Agreement  of
Reorganization   ("Merger")   with   ProHealth   Medical   Technologies,    Inc.
("ProHealth")  an  inactive  publicly   registered  shell  corporation  with  no
significant assets or operations.  For accounting purposes, the Company shall be
the surviving entity. The transaction is accounted for using the purchase method
of  accounting.  The total  purchase  price  and  carrying  value of net  assets
acquired  of was $ 880.  From  November  1988  until  the  date  of the  merger,
ProHealth was an inactive entity with no significant assets and liabilities

Effective with the Merger, all previously  outstanding  common stock,  preferred
stock,  options and warrants owned by the Company's  shareholders were exchanged
for an aggregate of 10,178,352  shares of ProHealth  common stock.  The value of
the  stock  that was  issued  was the  historical  cost of the  ProHealth's  net
tangible  assets,  which did not differ  materially  from their fair  value.  In
accordance with SFAS No. 141, the Company is the acquiring entity.

Effective with the Merger,  ProHealth  changed its name to Applied DNA Sciences,
Inc.  The total  purchase  price and  carrying  value of net assets  acquired of
ProHealth was $1. The net assets acquired were as follows:

       Common stock retained by  ProHealth shareholders         $ 1,015
       Assets acquired                                             (135)
                                                                --------
                Total consideration paid                        $   880
                                                                ========
In accordance with SOP 98-5, the Company expensed $880 as organization costs.

NOTE C - RELATED PARTY TRANSACTIONS

Included in current  liabilities  at June 30, 2004, is $109,943 of advances from
the stockholders of the Company. No formal agreements or repayment terms exist.

In addition,  the Company owes $117,333 at June 30, 2004 to the stockholders and
other related parties towards accrued expenses.

The  Company  leases  office  space under a sub lease  agreement  with an entity
controlled by a significant former shareholder of the Company.

The Company has entered into long term employment and consulting agreements with
Company's  President and Chief Executive  Officer and an entity  controlled by a
former significant Company shareholder, respectively.

NOTE D - CAPITAL STOCK

The Company is authorized to issue  10,000,000  shares of preferred stock. As of
June 30, 2004, there are no preferred shares issued and outstanding.

The Company is authorized to issue  100,000,000  shares of common stock, with an
original par value of $0.0001 par value per share. In December 2003, the Company
amended its Articles of  Incorporation  changing the par value of the  Company's
common to $ 0.50 per  share.  In  connection  with the  amendment,  the  Company
increased  the book value of its common  stock from  $2,044 to  $10,451,482  and
decreased  Additional Paid-In Capital from $9,518,670 to $1,558,259.  As of June
30, 2004,  the Company has issued and  outstanding  22,088,544  shares of common
stock.


In October 2003,  the Company  issued 287,439 shares of common stock in exchange
for consulting  services.  The Company valued the shares issued at approximately
$2.85 per share for a total of $820,418,  which represents the fair value of the
services  received which did not differ  materially  from the value of the stock
issued.

In October 2003,  the Company  issued  120,000 shares of common stock for shares
previously subscribed at $2.50 per share in September 2003.

In October 2003, the Company  canceled 100,000 shares of common stock previously
issued in exchange for services at $2.50 per share.

                                       12

<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003

NOTE D - CAPITAL STOCK (Continued)

In November  2003, the Company issued 100,000 shares of common stock in exchange
for consulting  services.  The Company valued the shares issued at approximately
$3.00 per share,  which represents the fair value of the services received which
did not differ materially from the value of the stock issued.

In November 2003, the Company sold 100,000 shares of common stock subscribed for
cash at $2.50 per share pursuant to private placement.

In December 2003,  the Company sold 6,400 shares of common stock  subscribed for
cash at $2.50 per share pursuant to private placement.

In  December  2003,  the  Company  issued  2,125,500  shares of common  stock in
exchange for  consulting  services.  . The Company  valued the shares  issued at
approximately  $2.59 per share,  which represents the fair value of the services
received which did not differ materially from the value of the stock issued.

In December 2003, the Company  received  $104,000 in exchange for a common stock
subscription at $2.50 per share pursuant to private placement.

In January 2004, the Company issued 41,600 shares of common stock at $2.50 share
pursuant to a subscription made on December 2003.

In January 2004,  the Company  issued 13,040 shares of common stock at $2.95 per
share in exchange for consulting services valued at $38,468.

In January 2004,  the Company issued 123,000 shares of common stock at $2.60 per
share in exchange for consulting services valued at $319,800.

In January  2004,  the Company  issued 1,000 shares of common stock at $3.05 per
share in exchange for consulting services valued at $3,050.

In February  2004,  the Company issued 6,283 shares of common stock at $3.07 per
share in exchange for employee services valued at $19,288.

In March 2004,  the Company  issued  44,740  shares of common stock at $3.04 per
share in exchange for consulting services valued at $136,010.

In March 2004, the Company  issued 55,000 of common stock for options  exercised
at $1.00 per share.

In March 2004,  the Company  issued  5,443  shares of common  stock at $3.00 per
share in exchange for employee services valued at $16,344.

In March 2004,  the Company  issued  5,769  shares of common  stock at $3.15 per
share in exchange for employee services valued at $18,177.

In March 2004,  the Company  issued  125,000 shares of common stock at $3.00 per
share in exchange for employee services valued at $375,000.

In March 2004,  the Company  issued  8,806  shares of common  stock at $3.03 per
share in exchange for employee services valued at $26,639.

In April 2004,  the Company  issued  22,500  shares of common stock at $0.10 for
subscription of warrants to be exercised.

In April 2004,  the Company  issued  9,860  shares of common  stock at $2.58 per
share in exchange for employee services valued at $25,441.

                                       13

<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003

NOTE D - CAPITAL STOCK (Continued)

In April 2004,  the Company  issued  11,712  shares of common stock at $2.35 per
share in exchange for consulting services valued at $27,523.

In April 2004,  the Company  issued  367,500 shares of common stock at $1.50 per
share in exchange for consulting services valued at $551,250.

In April 2004,  the Company  retired  50,000  shares of common stock  previously
issued for consulting services at $0.065 per share or $3,250.

In May 2004,  the Company  issued  100,000  shares of common  stock at $1.01 per
share in exchange for consulting services valued at $101,250.

In May 2004, the Company issued 10,000 shares of common stock at $0.10 per share
in a stock subscription for $1,000.

In May 2004,  the Company  issued  137,000  shares of common  stock at $0.86 per
share in exchange for consulting services valued at $119,233.

In May 2004, the Company issued 26,380 shares of common stock at $1.15 per share
in exchange for consulting services valued at $30,337.

In June 2004, the Company retired 5,000 shares of common stock previously issued
for consulting services at $0.065 per share or $325.

In June 2004,  the Company  issued  270,500  shares of common stock at $0.67 per
share in exchange for consulting services valued at $180,560.

In June 2004, the Company issued 8,000 shares of common stock at $0.89 per share
in exchange for consulting services valued at $7,120.

In June 2004,  the Company  issued  50,000  shares of common stock at $0.645 per
share in exchange for consulting services valued at $32,250.

In June 2004, the Company sold 250,000 shares of common stock at $1.00 per share
for total proceeds of $250,000 pursuant to private placement.

In accordance with EITF 96-18 the  measurement  date to determine fair value was
the date at which a commitment for  performance by the counter party to earn the
equity  instrument  was  reached.  The  Company  valued  the  shares  issued for
consulting  services at the rate which represents the fair value of the services
received which did not differ materially from the value of the stock issued.

NOTE E - WARRANTS

The  following  table  summarizes  the changes in warrants  outstanding  and the
related  prices  for  the  shares  of  the  Company's  common  stock  issued  to
non-employees  of the  Company.  These  warrants  were  granted  in lieu of cash
compensation for services performed or financing expenses in connection with the
sale of the Company's common stock.
<TABLE>
<CAPTION>
                                                                       Warrants                                  Warrants
                                                  Remaining           Outstanding                               Exercisable
                          Weighted Number     Contractual Life     Weighted Exercise     Weighted Number     Weighted Exercise
    Exercise price          Outstanding            (Years)               Price             Exercisable             Price
<S>     <C>                         <C>               <C>                <C>                 <C>                   <C>
        $1.00                       338,000           4                  $1.00               306,000               $1.00
        $0.10                       312,500           5                  $0.10               312,500               $0.10
        $3.20                     1,675,000           5                  $3.20             1,675,000               $3.20
        $3.50                        45,500           1                  $3.50                45,500               $3.50
                                  ----------                                               ----------
                                  2,371,000                                                2,339,000
                                  ==========                                               ==========
</TABLE>

                                       14

<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003

NOTE E - WARRANTS (Continued)

Transactions involving warrants are summarized as follows:
                                                                     Weighted
                                                                   Average Price
                                               Number of Shares     Per Share

     Outstanding at September 30, 2003            383,500        $     1.51
     Granted                                    2,010,000              2.69
     Exercised                                    (22,500)             0.10
     Cancelled or expired
                                               -----------       -----------
     Outstanding at June 30, 2004               2,371,000        $     2.42
                                               ===========       ===========
The estimated value of the  compensatory  warrants  granted to  non-employees in
exchange  for  services  and  financing   expenses  was  determined   using  the
Black-Scholes pricing model and the following assumptions: contractual term of 2
to 5 years,  a risk free  interest  rate of 1.00%,  a  dividend  yield of 0% and
volatility  of 22.9%.  The  amount of the  expense  charged  to  operations  for
compensatory  warrants  granted in exchange  for services was $-0- for the three
months ended June 30, 2004 and 2003.

NOTE F - CONVERTIBLE PROMISSORY NOTES PAYABLE

A  summary  of  convertible  promissory  notes  payable  at June 30,  2004 is as
follows:
<TABLE>
<CAPTION>
<S>                                                                            <C>
   Convertible  notes  payable  ("Bridge  Unit  Offering"),  in quarterly
   installments of interest only at 10% per annum,  secured by all assets
   of the Company and due on the earlier of the 9-month  anniversary date
   of the  initial  closing of the  Offering,  or the  completion  of any
   equity financing of $3M or more; The Company,  in its sole discretion,
   may  prepay  principal  at any time  without  penalty.  The  Notes are
   convertible  into shares of common  stock of the Company at a price of
   $2.50 per share.                                                            $ 1,675,000

   Debt  Discount - beneficial  conversion  feature,  net of  accumulated
   amortization of $969,993                                                       (320,843)

   Debt Discount, net of accumulated amortization of $249,450                     (134,713)
                                                                               ------------
                                                                               $ 1,219,444
                                                                               ============
</TABLE>
During the three  months ended  December  31, 2003,  the Company sold 27.5 units
(the  "Units")  to  accredited  investors  at a price of  $50,000  per Unit (the
"Bridge  Offering")  for a total of  $1,375,000.  Each  Unit  consists  of (i) a
$50,000  Principal  Amount 10% Secured  Convertible  Promissory  Note ("Note" or
"Notes"),  (ii)  detachable  warrants  to purchase  50,000  shares of our common
stock,  exercisable  for a period  of five  years at a price of $3.20  per share
("$3.20 Warrant") and (iii) detachable warrants to purchase 10,000 shares of our
common  stock,  exercisable  for a period of five  years at a price of $0.10 per
share ("$0.10 Warrant" and together with the $3.20 Warrant, the "Warrants"). The
Notes are  convertible  into shares of our common  stock at a price of $2.50 per
share.

The Company  accounted for the warrants and notes payable in accordance with APB
No. 14,  "Accounting  for  Convertible  Debt and Debt Issued with Stock Purchase
Warrants"  ("APB  14").  APB 14  requires  a portion  of the  proceeds  from the
issuance of debt securities  with detachable  stock warrants be allocated to the
warrants and treated as paid-in  capital.  Any resulting  discount or premium on
the notes payable  should be recorded and amortized  over the life of the notes.
The Company used the Black-Scholes  model to determine the value of the warrants
issued to the  noteholders.  Under  the  Black-Scholes  model,  the value of the
warrants are  determined by taking the  difference  between  acquiring the stock
outright and the present  value of paying the exercise  price on the  expiration
day. As a result,  the Company valued the warrants at $206,526.  This amount was
recorded as paid-in capital and the resulting  discount on the notes payable was
recorded and is being  amortized  using the interest method over the life of the
notes.  The debt  discount  attributed is amortized  over the Bridge  Offering's
earliest maturity period of 9 months from the date of issue as interest expense.

In  accordance  with  EMERGING  ISSUES  TASK FORCE ISSUE  98-5,  ACCOUNTING  FOR
CONVERTIBLE  SECURITIES  WITH A BENEFICIAL  CONVERSION  FEATURES OR CONTINGENTLY
ADJUSTABLE  CONVERSION RATIOS ("EITF 98-5"),  the Company recognized an imbedded
beneficial  conversion  feature present in the Bridge Offering note. The Company
allocated a portion of the proceeds equal to the intrinsic value of that feature
to

                                       15

<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 AND 2003

NOTE F - CONVERTIBLE PROMISSORY NOTES PAYABLE (Continued)

additional paid in capital.  The Company recognized and measured an aggregate of
$1,168,474  of the  proceeds,  which  is  equal  to the  intrinsic  value of the
imbedded  beneficial  conversion  feature,  to additional  paid in capital and a
discount  against  the Bridge  Offering.  The debt  discount  attributed  to the
beneficial  conversion feature is amortized over the Bridge Offering's  earliest
maturity period of 9 months from the date of issue as interest expense.

The  Company  valued the  beneficial  conversion  of the notes and  warrants  in
accordance  with  EITF  00-27  using  the  Black-Scholes  pricing  model and the
following assumptions:

          o    contractual terms of 5 years
          o    an average risk free interest rate of 1.00%
          o    a dividend yield of 0.00%
          o    volatility of 22.9%.

During the three  months  ended March 31,  2004,  the Company  sold 6 units (the
"Units") to  accredited  investors  at a price of $50,000 per Unit (the  "Bridge
Offering")  for a  total  of  $300,000.  Each  Unit  consists  of (i) a  $50,000
Principal  Amount 10% Secured  Convertible  Promissory Note ("Note" or "Notes"),
(ii) warrants to purchase  50,000 shares of our common stock,  exercisable for a
period of five years at a price of $3.20 per share  ("$3.20  Warrant") and (iii)
warrants to purchase 10,000 shares of our common stock, exercisable for a period
of five years at a price of $0.10 per share  ("$0.10  Warrant" and together with
the $3.20 Warrant, the "Warrants"). The Notes are convertible into shares of our
common stock at a price of $2.50 per share.

The Company  accounted for the warrants and notes payable in accordance with APB
No. 14,  "Accounting  for  Convertible  Debt and Debt Issued with Stock Purchase
Warrants"  ("APB  14").  APB 14  requires  a portion  of the  proceeds  from the
issuance of debt securities  with detachable  stock warrants be allocated to the
warrants and treated as paid-in  capital.  Any resulting  discount or premium on
the notes payable  should be recorded and amortized  over the life of the notes.
The Company used the Black-Scholes  model to determine the value of the warrants
issued to the  noteholders.  Under  the  Black-Scholes  model,  the value of the
warrants are  determined by taking the  difference  between  acquiring the stock
outright and the present  value of paying the exercise  price on the  expiration
day. As a result,  the Company valued the warrants at $177,638.  This amount was
recorded as paid-in capital and the resulting  discount on the notes payable was
recorded and is being  amortized  using the interest method over the life of the
notes.  The debt  discount  attributed is amortized  over the Bridge  Offering's
earliest maturity period of 9 months from the date of issue as interest expense.

In  accordance  with  EMERGING  ISSUES  TASK FORCE ISSUE  98-5,  ACCOUNTING  FOR
CONVERTIBLE  SECURITIES  WITH A BENEFICIAL  CONVERSION  FEATURES OR CONTINGENTLY
ADJUSTABLE  CONVERSION RATIOS ("EITF 98-5"),  the Company recognized an imbedded
beneficial  conversion  feature present in the Bridge Offering note. The Company
allocated a portion of the proceeds equal to the intrinsic value of that feature
to additional paid in capital.  The Company recognized and measured an aggregate
of  $122,362  of the  proceeds,  which is equal  to the  intrinsic  value of the
imbedded  beneficial  conversion  feature,  to additional  paid in capital and a
discount  against  the Bridge  Offering.  The debt  discount  attributed  to the
beneficial  conversion feature is amortized over the Bridge Offering's  earliest
maturity period of 9 months from the date of issue as interest expense.

The  Company  valued the  beneficial  conversion  of the notes and  warrants  in
accordance  with  EITF  00-27  using  the  Black-Scholes  pricing  model and the
following assumptions:

          o    contractual terms of 5 years
          o    an average risk free interest rate of 4.25%
          o    a dividend yield of 0.00%
          o    volatility of 42.0%.

ITEM 2.  MANAGEMENTS  DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FOR THE NINE
MONTHS ENDED JUNE 30, 2004

The  following  discussion  should  be read in  conjunction  with the  Company's
Consolidated  Financial Statements and Notes thereto,  included elsewhere within
this report. The quarterly report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended,  including  statements using
terminology such as "can", "may", "believe",  "designated to", "will", "expect",
"plan",  "anticipate",  "estimate",  "potential" or "continue",  or the negative
thereof or other comparable terminology regarding beliefs,  plans,  expectations
or intentions regarding the future. Forward looking statements involve risks and
uncertainties and actual results could differ materially from those discussed in

                                       16

<PAGE>
forward-looking  statements.  All forward  looking  statements  and risk factors
included in this document are made as of the date hereof,  based on  information
available  to the Company as of the date  thereof,  and the  Company  assumes no
obligations to update any forward-looking  statement or risk factor,  unless the
Company is required to do so by law.

Overview

Applied DNA Sciences, Inc. is a provider of DNA-embedded security solutions that
protect corporate and government  intellectual  property from counterfeiting and
fraud. Using a proprietary line of botanical DNA-embedded biotechnology products
accompanied by monitoring and enforcement  support, the company produces biotech
solutions  customized  to its  customer's  needs.  Applied  DNA  Sciences,  Inc.
(Applied DNA  Sciences)  provides the most  effective  methods for  identifying,
deterring, and apprehending global counterfeiting  organizations.  The company's
solutions  also  provide  additional  safeguards  to  meet  heightened  security
requirements  and avert  potentially  dangerous  acts  against  governments  and
private  sectors.  Applied  DNA  Sciences  is one of a very  limited  number  of
companies worldwide to pioneer DNA biotechnology applied to anti-counterfeit and
fraud prevention solutions.

Applied DNA Sciences has an exclusive  licensing and partnership  agreement with
Biowell  Technology  Inc.  (Biowell)  of  Taiwan,  with  exclusive   territories
including  North America and Europe.  The company is positioned to be the market
leader in sales, marketing, and sub-licensing of the DNA biotechnology products,
developed by Biowell, in the world's largest markets.

Applied DNA  Sciences'  DNA-embedded  products are available to a broad range of
industries  including  corporations,  federal government  agencies,  information
technology,  security and surveillance,  textiles,  food products,  agriculture,
entertainment   media,   the  arts,   cosmetics,   pharmaceutical,   biometrics,
automotive,  and numerous vertical retail markets. The applications also enhance
capabilities  for personnel  identification  verification  and validation of the
source of components used for critical manufacturing,  defense, and other highly
secure products.

Plan of Operation

The Company  presently  does not have any available  credit,  bank  financing or
other  external  sources of liquidity.  Due to its brief history and  historical
operating losses, the Company's  operations have not been a source of liquidity.
The Company will need to obtain additional capital in order to expand operations
and become profitable.  In order to obtain capital, the Company may need to sell
additional  shares of its common  stock or borrow  funds from  private  lenders.
There can be no  assurance  that the Company  will be  successful  in  obtaining
additional funding.

During the three months ended June 30, 2004,  the Company's  priorities  were to
recruit  and build its team,  organize  its  infrastructure  and to develop  and
implement a  successful  strategy on how best to exploit its  exclusive  Biowell
license agreement, therefore no revenues were anticipated,  planned or received,
expenses of  $1,672,449  were  incurred  stemming  from  general,  selling,  and
administrative  expenses.  An  additional  $558,333  was  incurred to  financing
activities.

Although  the  management  of the Company is of the opinion that  continuing  to
develop  and  finance  the   Company's   present   business  of  providing   DNA
anti-counterfeit   technology   may   ultimately   be   successful,   management
nevertheless  expects that the Company will need substantial  additional capital
before the Company's operations can be fully implemented.

Liquidity and Capital Resources

As of June 30, 2004, we had a working capital deficit of $2,032,067. As a result
of our operating losses from our inception through June 30, 2004, we generated a
cash flow  deficit of  $2,561,193  from  operating  activities.  We met our cash
requirements  during this period from  advances of $109,943  from the  Company's
officers and principal shareholders,  advances of $107,282 from related parties,
cash proceeds of $241,000  received as a result of registered  options exercised
at $1.00 per share,  cash  proceeds  received of $536,000 for shares  sold,  and
$1,675,000 received for a 10% Secured  Convertible  Promissory Note to be issued
pursuant to a private placement offering.

While we have raised capital to meet our working  capital and financing needs in
the past,  additional  financing  is  required  in order to meet our current and
projected  cash flow deficits from  operations and  development.  We are seeking
financing in the form of equity through a Private Placement  Memorandum in order
to provide the necessary  working capital.  We currently have no commitments for
financing. There is no guarantee that we will be successful in raising the funds
required.

If we are not successful in generating  sufficient  liquidity from operations or
in raising sufficient  capital resources,  on terms acceptable to us, this could
have a material adverse effect on our business, results of operations, liquidity
and financial condition.

                                       17

<PAGE>
The effect of inflation on the Company's  operating results was not significant.
The Company's  operations are located in North America and there are no seasonal
aspects that would have a material effect on the Company's  financial  condition
or results of operations.

The Company's  independent  certified public accountant has stated in his report
included  in the  Company's  annual  report on Form  10-KSB,  for the year ended
September  30,  2003,  that the Company has incurred  operating  losses from its
inception  , and that the  Company is  dependent  upon  management's  ability to
develop profitable operations.  These factors among others may raise substantial
doubt about the Company's ability to continue as a going concern.

Bridge Unit Offering

From  November  through  March 17,  2004,  we sold 33.5 units (the  "Units")  to
accredited investors at a price of $50,000 per Unit (the "Offering") for a total
of $1,675,000.  Each Unit consists of (i) a $50,000 Principal Amount 10% Secured
Convertible  Promissory  Note  ("Note" or  "Notes"),  (ii)  warrants to purchase
50,000 shares of our common stock,  exercisable  for a period of five years at a
price of $3.20 per share ("$3.20 Warrant") and (iii) warrants to purchase 10,000
shares of our common stock, exercisable for a period of five years at a price of
$0.10 per share  ("$0.10  Warrant"  and  together  with the $3.20  Warrant,  the
"Warrants").  The Notes are  convertible  into  shares of our common  stock at a
price of $2.50 per share.  The  Company  was  obligated  to file a  registration
statement  registering  the shares  underlying the Notes and Warrants  within 45
days of the close of the Bridge  Unit  Offering.  The  Company is  presently  in
default for failure to file the registration statement on or before May 1, 2004.

The  aggregate  principal  amount of Notes  sold was  $1,675,000.  The Notes are
secured and bear  interest at 10% per annum,  computed on the basis of a 365-day
year,  accruing from the date an investor's  subscription was closed upon by the
Company.  Principal  and all  accrued  interest  will be  payable in full on the
earlier  of (i) the  9-month  anniversary  date of the  initial  closing  of the
Offering,  or (ii) the completion of any equity financing of $3,000,000 or more.
The Company,  in its sole  discretion,  may prepay principal at any time without
penalty. The Notes are convertible into shares of common stock of the Company at
a price of $2.50 per share.

The Notes are  secured  by a  security  agreement  giving  the Holder a security
interest  in all the  patents,  licenses,  equipment,  fixtures,  inventory  and
accounts receivable of the Company, and/or any of its subsidiaries.

The following events constitute events of default under the Notes:

(i) Default in the payment of the  principal or accrued  interest on any Note or
upon any other indebtedness of the Company that is greater than $100,000, as and
when the same shall become due,  whether by default or otherwise,  which Default
shall have continued for a period of five (5) business days; or
(ii) Any  representation  or warranty  made by the Company or any officer of the
Company in the Notes, or in any agreement, report, certificate or other document
delivered to the Holder  pursuant to the Notes shall have been  incorrect in any
material  respect  when made which  shall not have been  remedied  ten (10) days
after written notice thereof shall have been given by the Holder; or
(iii) The  Company  shall fail to perform or observe  any  affirmative  covenant
contained  in  Section 4 of the  Notes and such  Default,  if  capable  of being
remedied,  shall  not have been  remedied  ten (10) days  after  written  notice
thereof shall have been given by the Holder; or
(iv) The  Company  or any  subsidiary  (A) shall  institute  any  proceeding  or
voluntary  case  seeking to  adjudicate  it  bankrupt or  insolvent,  or seeking
dissolution,  liquidation, winding up, reorganization,  arrangement, adjustment,
protection,  relief or  composition of it or its debts under any law relating to
bankruptcy,  insolvency or reorganization  or relief of debtors,  or seeking the
entry of any  order  for  relief  or the  appointment  of a  receiver,  trustee,
custodian or other  similar  official for such Company or any  subsidiary or for
any  substantial  part of its  property,  or shall  consent to the  commencement
against  it of such a  proceeding  or case,  or shall file an answer in any such
case or proceeding  commenced  against it consenting  to or  acquiescing  in the
commencement of such case or proceeding, or shall consent to or acquiesce in the
appointment  of such a receiver,  trustee,  custodian or similar  official;  (B)
shall be unable to pay its debts as such debts  become  due,  or shall  admit in
writing its  inability  to apply its debts  generally;  (C) shall make a general
assignment  for the  benefit  of  creditors;  or (D)  shall  take any  action to
authorize or effect any of the actions set forth above ; or
(v) Any proceeding shall be instituted against the Company seeking to adjudicate
it bankrupt  or  insolvent,  or seeking  dissolution,  liquidation,  winding up,
reorganization,  arrangement,  adjustment,  protection,  relief of  debtors,  or
seeking  the entry of an order  for  relief or the  appointment  of a  receiver,
trustee,  custodian  or  other  similar  official  for  the  Company  or for any
substantial part of its property, and either such proceeding shall not have been
dismissed  or shall not have been  stayed for a period of sixty (60) days or any
of the actions sought in such proceeding  (including,  without  limitation,  the
entry of any order for  relief  against  it or the  appointment  of a  receiver,
trustee,  custodian or other similar official for it or for any substantial part
of its property) shall occur; or

                                       18

<PAGE>
(vi) One or more final judgments,  arbitration  awards or orders for the payment
of money in excess of $100,000 in the  aggregate  shall be rendered  against the
Company,  which judgment remains unsatisfied for thirty (30) days after the date
of such entry; or  (vii)Delisting  of the Common Stock from the principal market
or exchange on which the Common Stock is listed for trading;  Company's  failure
to comply with the conditions for listing;  or notification  that the Company is
not in compliance with the conditions for such continued listing; or
(viii)The  issuance of an SEC stop trade order or an order suspending trading of
the Common Stock from the principal market or exchange on which the Common Stock
is listed for trading for longer than five (5) trading days; or
(ix) The  failure by the Company to issue  shares of Common  Stock to the Holder
upon exercise by the Holder of the conversion rights of the Holder in accordance
with the terms of the Notes,  or the failure to  transfer or cause its  transfer
agent to transfer  (electronically  or in certificated form) any certificate for
shares of Common  Stock  issued to the Holder upon  conversion  of or  otherwise
pursuant  to the Notes as and when  required  by the  Notes,  or the  failure to
remove any restrictive legend (or to withdraw any stop transfer  instructions in
respect thereof) on any certificate for any shares of Common Stock issued to the
Holder  upon  conversion  of or  otherwise  pursuant  to the  Notes  as and when
required by the Notes,  and any such failure shall continue uncured for ten (10)
days  after the  Company  shall  have been  notified  thereof  in writing by the
Holder; or
(x) The  failure  by the  Company  to file  the  Registration  Statement  within
forty-five (45) days following the Closing Date (as defined in the  Subscription
Agreement) or obtain  effectiveness with the Securities and Exchange  Commission
of the  Registration  Statement  within  one  hundred  thirty  five  (135)  days
following  the Closing Date (as defined in the  Subscription  Agreement) or such
Registration  Statement  lapses in effect  (or sales  cannot  otherwise  be made
thereunder  effective,  whether by reason of the  Company's  failure to amend or
supplement  the  prospectus   included   therein)  for  more  than  twenty  (20)
consecutive  days or forty  (40)  days in any  twelve  month  period  after  the
Registration Statement becomes effective; or
(xi) The Company shall  encumber or hypothecate  the  collateral  subject to the
Security Agreement to any party; or
(xii) A default  by the  Company  of a  material  term,  covenant,  warranty  or
undertaking of any other  agreement to which the Company and Holder are parties,
or the occurrence of an event of default under any such other agreement.

Holders shall, at any time prior to the Maturity Date, have the right to convert
the Note into Shares of the  Company at $2.50 per such Share,  which right shall
be exercised in the Holder's sole and absolute  discretion.  Holders shall, with
respect  to any  Shares  acquired  thereby,  be  granted  the  same  demand  and
piggy-back  registration  rights as if such Shares were purchased as part of the
Units.

In the event of and  immediately  upon the  occurrence of an "Event of Default,"
the Notes shall  become  immediately  due and payable  without any action by the
Holder and the Notes shall bear interest until paid at the rate of 12% per annum
or such amount as shall be allowed by law.

In the event that the sum due under the Note is not repaid on the Maturity Date,
the Holder will have the option to either  have the Note accrue  interest at 12%
or such amount as legally  allowed until paid, or to convert the entirety of the
debt  then  outstanding  under the Note into the  number  of shares  derived  by
dividing  the sum of such debt by the dollar  value  equal to 80% of the closing
ask price of the  shares  on the last  trading  day  immediately  preceding  the
Maturity  Date as  reported  on the market  upon which the shares  shall then be
trading,  provided,  however, that the conversion price shall never be less than
$1.00 per share.  Any shares  acquired  thereby shall carry with them the demand
and piggy back registration  rights granted to the Holder under the terms of the
Note.
The Company was obligated to file a registration statement on or before April
30, 2004, covering the shares of common stock underlying the convertible notes
and the warrants. The Company failed to file the registration statement on or
before April 30, 2004 and as of the date of this filing, the Company has not yet
filed the registration statement. In addition, on July 24, 2004, the Notes
became due and payable. As of the date of this filing, the Company has not
repaid any of the Note holders, and the Notes are incurring interest at 12%, the
default interest rate as set in the Notes. As a result of these defaults, the
Note holders are entitled to enforce the provisions of the security agreement,
in addition to the rights granted under the Notes, although no actions have been
taken by the Note holders as of the date of this filing. The Company intends to
make an offer to the Note holders to extend the repayment date of the Notes,
however, no assurances can be given that the Note holders will agree with the
Company's offer or that any of the Note holders will seek enforcement of their
various rights.

Bridge Offering Warrants

Each Unit, or $50,000 principal amount of the Note, entitles the holder warrants
exercisable  on a one for one basis into  shares of Common  Stock at an exercise
price of $3.20 during a five-year  period  commencing on the initial  closing of
the Offering (which was December 15, 2003). In addition, each Unit also entitles
the holder to 10,000 warrants  exercisable on a one for one basis into shares of
Common Stock at an exercise  price of $0.10 per share during a five-year  period
commencing on the initial closing of the Offering (which was December 15, 2003).
In the event a holder of Warrants  fails to exercise the Warrants prior to their
expiration,  the  Warrants  will  expire,  and the holder  thereof  will have no
further rights with respect to the Warrants.

The Warrants expire at 5:00 p.m., New York time, on the fifth  anniversary after
the initial closing of the Offering.  In the event a holder of Warrants fails to
exercise the Warrants  prior to their  expiration,  the Warrants will expire and
the holder thereof will have no further rights with respect to the Warrants.

                                       19

<PAGE>
Product Research and Development

Without substantial  financial resources we do not anticipate incurring material
research and development costs during the next twelve months.

Acquisition of Plant and Equipment and Other Assets

Without substantial  financial resources we do not anticipate the acquisition of
any material property, plant or equipment during the next 12 months.

Number of Employees

As of June 30, 2004,  we have eight full time  employees and we continue to rely
on the  services of outside  consultants.  In order for us to attract and retain
quality personnel,  we anticipate we will have to offer competitive  salaries to
future  employees.  We anticipate that it may become desirable to add additional
full and or part time employees to discharge  certain critical  functions during
the next 12 months.  This projected  increase in personnel is dependent upon our
ability to  generate  revenues  and obtain  sources  of  financing.  There is no
guarantee that we will be successful in raising the funds required or generating
revenues  sufficient to fund the projected  increase in the number of employees.
As we continue to expand, we will incur additional cost for personnel.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most  significant  risks to
our business,  but we cannot  predict  whether,  or to what extent,  any of such
risks may be realized nor can we guarantee that we have  identified all possible
risks that might arise.  Investors  should  carefully  consider all of such risk
factors  before  making an  investment  decision  with respect to the  Company's
Common Stock.


                                       20

<PAGE>
Risks

Applied  DNA  Sciences,  Inc.  is a  small  company  entering  a  technical  and
specialized  scientific  industry.  The  Company's  growth  will depend upon the
working capital and financial  support,  which we are in the process of seeking.
The Company will need  substantial  additional  capital to expand and to exploit
its potential.  While the management  team has strong contacts in the geographic
and product territories,  the Company is small with limited assets and a limited
operating history and may, as a result, have difficulties  securing large enough
and increasing financial commitments from potential investors.  Thus the Company
may be subject to the high risks  associated  with start-up  companies and small
business.

The Company relies on a small number of key  individuals to implement  plans and
operations.  Although the Company may obtain key person life insurance  coverage
on the Company's  key  individuals,  once  substantial  financial  resources are
obtained, the Company has not done so at this time. Should for some reason their
services  become  unavailable,  the Company  will be  required  to retain  other
qualified personnel.

Reductions  or delays in research  and  development  budgets  and in  government
funding may negatively  impact the Company's  sales.  Future clients may include
researchers  at  pharmaceutical  and  biotechnology  companies  as well as other
industrial   sectors,   academic   institutions   and   government  and  private
laboratories.  Fluctuations  in the  research and  development  budgets of these
researchers and their  organizations  could have a significant  effect on demand
for the Company's  products.  Research and development  budgets fluctuate due to
numerous  factors that are outside the  Company's  control and are  difficult to
predict,  including  changes in available  resources,  spending  priorities  and
institutional  budgetary  policies.  The Company's  business  could be seriously
damaged by any decrease in life science research and development expenditures by
pharmaceutical, biotechnological and other industrial sector companies, academic
institutions  or  government  and private  laboratories.  Although  the level of
research  funding has increased  during the past several years, we cannot assure
that this trend will continue. Government funding of research and development is
subject to the political  process,  which is inherently fluid and unpredictable.
Also  government  proposals  to  reduce or  eliminate  budgetary  deficits  have
sometimes  included reduced  allocations to the US National  Institute of Health
and other  government  agencies that fund research and  development  activities.
Also, our potential  customers  receive funds from approved grants at particular
times of the year, as determined by the federal government.  Grants have, in the
past, been frozen for extended periods or have otherwise  become  unavailable to
various  institutions  without  advance  notice.  The timing of receipt of grant
funds  affects  the timing of  purchase  decisions  by our  customers  and, as a
result, can cause fluctuations in our sales and operating results.

                                       21

<PAGE>
The Company regards trademarks, trade secrets and other intellectual property as
a component of its success. The Company relies on trademark law and trade secret
protection and  confidentiality  and /or license  agreements  with  consultants,
customers,  partners and others to protect our intellectual property.  Effective
trademark and trade secret  protection  may not be available in every country in
which the Company's  products are available.  The Company cannot be certain that
the  Company has taken  adequate  steps to protect  its  intellectual  property,
especially in countries  where the laws may not protect the Company's  rights as
fully  as  in  the  United  States.  In  addition,  the  Company's  third  party
confidentiality  agreements  can be breached and, if they are,  there may not be
adequate remedy available to the Company.  If the Company's trade secrets become
known, the Company may lose its competitive edge.

The  Company may be unable to protect its  trademarks,  trade  secrets and other
intellectual  property  rights that are important to its  business.  The Company
regards  its  trademarks,  trade  secrets and other  intellectual  property as a
component of its success.  The Company  relies on trademark law as well as trade
secret  protection and  confidentiality  license  agreements  with  consultants,
employees,   customers,  partners  and  partners  to  protect  our  intellectual
property.

Litigation as regards the Company intellectual property or other subject matters
could  harm the  Company's  business.  Litigation  regarding  patents  and other
intellectual  property rights is extensive in the  biotechnology  industry.  The
Company is aware that patents have been applied for, and in some cases issued to
others,  claiming technologies that are closely related to Applied DNA Sciences,
Inc. As a result,  and in part due to the  ambiguities  and  evolving  nature of
intellectual   property  law,  the  Company  periodically  receives  notices  of
potential  infringements of patents held by others. Although to date the Company
has successfully  resolved these types of claims, the Company may not be able to
do so in the  future.  In the event of an  intellectual  property  dispute,  the
Company may be forced to litigate.  This  litigation  could involve  proceedings
declared 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 the Company not prevail, could seriously harm
the  Company's  business.  In the  case a third  party  claims  an  intellectual
property  right  to  technology  the  Company  uses,  the  Company  may  need to
discontinue  an  important  product  or product  line,  alter its  products  and
processes, pay license fees or cease its affected business activities,  Although
the Company might under these circumstances  attempt to obtain a license to this
intellectual  property,  it may not be able to do so on favorable  terms,  or at
all.

In addition to  intellectual  property  rights  litigation,  other  substantial,
complex  or  extended  litigation  could  result in large  expenditures  for the
Company and distraction of its management.  For example, law suits by employees,
shareholders,  collaborators,  distributors or sublicensees could be very costly
and  substantially  disrupt the Company's  business.  Disputes from time to time
with companies or  individuals  are not uncommon in the industry and the Company
cannot assure that it will always be able to resolve them out of court.

The  Company's  growth  depends upon the ability to  undertake  sales in current
markets and to expand sales  nationally  to  additional  market  segments and to
Europe,  South America,  Australia and parts of the Middle East. There can be no
certainty  that the  Company's  efforts  to  increase  and  expand  sales can be
accomplished on a profitable  basis. The expansion to other delivery methods and
to other venues will depend on a number of factors,  most notably the timely and
successful  promotion  and sale of the Company's  products and related  services
directly or via  sublicensing  agreements.  The  Company's  inability  to expand
sales, in a timely manner, would have a material adverse effect on its business,
operating results and its financial condition.

ITEM 3. CONTROLS AND PROCEDURES

Evaluation  of  Disclosure  Controls and  Procedures.  As of June 30, 2004,  the
Company's  management  carried out an evaluation,  under the  supervision of the
Company's  Chief  Executive  Officer  and the  Chief  Financial  Officer  of the
effectiveness  of the design and operation of the Company's system of disclosure
controls  and  procedures  pursuant to the  Securities  and Exchange  Act,  Rule
13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure  controls  and  procedures  were  effective,  as of the date of their
evaluation,  for the purposes of recording,  processing,  summarizing and timely
reporting material  information required to be disclosed in reports filed by the
Company under the Securities Exchange Act of 1934.

Changes in internal  controls.  There were no changes in internal  controls over
financial  reporting,  known to the Chief  Executive  Officer or Chief Financial
Officer  that  occurred  during  the  period  covered  by this  report  that has
materially  affected,  or is likely to materially effect, the Company's internal
control over financial reporting.


                                       22

<PAGE>

                           PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

In April 2004,  the Company  issued  22,500  shares of common stock at $0.10 for
subscription of warrants to be exercised.

In April 2004,  the Company  issued  9,860  shares of common  stock at $2.58 per
share in exchange for employee services valued at $25,441.

In April 2004,  the Company  issued  11,712  shares of common stock at $2.35 per
share in exchange for consulting services valued at $27,523.

In April 2004,  the Company  issued  367,500 shares of common stock at $1.50 per
share in exchange for consulting services valued at $551,250.

In April 2004,  the Company  retired  50,000  shares of common stock  previously
issued for consulting services at $0.065 per share or $3,250.

In May 2004,  the Company  issued  100,000  shares of common  stock at $1.01 per
share in exchange for consulting services valued at $101,250.

In May 2004, the Company issued 10,000 shares of common stock at $0.10 per share
in a stock subscription for $1,000.

In May 2004,  the Company  issued  137,000  shares of common  stock at $0.86 per
share in exchange for consulting services valued at $119,413.

In May 2004, the Company issued 26,380 shares of common stock at $1.15 per share
in exchange for consulting services valued at $30,337.

In June 2004, the Company retired 5,000 shares of common stock previously issued
for consulting services at $0.065 per share or $325.

In June 2004,  the Company  issued  270,500  shares of common stock at $0.67 per
share in exchange for consulting services valued at $180,560.

In June 2004, the Company issued 8,000 shares of common stock at $0.89 per share
in exchange for consulting services valued at $7,120.

In June 2004,  the Company issued 50,000 shares of common stock at $0.64 1/2 per
share in exchange for consulting services valued at $32,250.

                                       23

<PAGE>
In June 2004, the Company sold 250,000 shares of common stock at $1.00 per share
for total proceeds of $250,000 pursuant to private placement.

The securities issued the above  transactions  were issued without  registration
under the Securities Act of 1933, as amended (the "Securities Act"), in reliance
on the exemption  provided in Section 4(2) of the Securities Act. The recipients
of securities in each  transaction  acquired the securities for investment  only
and not with a view to or for sale in connection with any  distribution  thereof
and appropriate  legends were affixed to the share  certificates  issued in such
transactions.   None  of  the  transactions  involved  general  solicitation  or
advertising.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NONE

ITEM 5. OTHER INFORMATION

On June 2, 2004, the Company  announced the  appointment of Peter  Brockelsby as
President  of Applied  DNA  Sciences,  Inc.  reporting  directly to the Board of
Directors.  Mr.  Brocklesby,  54,  has  over  20  years  of  experience  in  the
development,  commercialization  and marketing of new  technologies and has many
contacts  worldwide.  Before  joining  Applied  DNA,  he served as  Director of
B.I.D.C NV from 2000 to 2003 where he developed  and  commercialized  electronic
products and communications. Also during that time, Mr. Brockelsby served on the
Board of Directors of International  Power & Energy Group.  From 1998 to 2000 he
was  Executive  Vice  President  of  Strategic  Business  Development  acquiring
interest in the energy industry.

     In 1977,  after seven years service as a commissioned  officer in the Royal
Air Force,  Brocklesby  left to become  Director of Logistics  for Air Asia (Air
America),  a US defense  contractor  providing  support for the US military  and
other  governments  in  Asia.  Air  Asia  was  acquired  by  E-Systems  Inc.,  a
multi-billion  dollar defense contractor and appointed Brocklesby Vice President
of Marketing.  E-Systems  specializes  in the  development  and  integration  of
advanced airborne and land-based military and government communications systems,
electronic warfare equipment,  electronic surveillance and airborne intelligence
gathering systems, and is now part of Raytheon.

     As  an  independent   businessman,   Brocklesby   developed   sophisticated
electronics  systems for commercial  aircraft in a joint-venture with Plessey, a
multi-billion dollar defense contractor and avionics manufacturer.

     Since May of 2004, our Chief Financial  Officer and Director,  Gerhard Wehr
has  been  incapacitated  after  suffering  from  a  sudden  illness.  Based  on
information  provided by Mr. Wehr's family, the Company does not expect Mr. Wehr
to fully  recover and believes that his  resumption  of duties is doubtful.  Rob
Hutchison,  our Chief  Executive  Officer,  has been  filling  the role of Chief
Financial Officer on an interim basis until a suitable replacement is identified
and hired. Mr. Wehr's outstanding options will continue to vest in his absence.

NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     31.1 -    Certification of Chief Executive  Officer pursuant to Rule 13a-14
               and Rule 15d-14(a), promulgated under the Securities and Exchange
               Act of 1934, as amended

     31.2 -    Certification of Chief Financial  Officer pursuant to Rule 13a-14
               and Rule 15d 14(a), promulgated under the Securities and Exchange
               Act of 1934, as amended

     32.1 -    Certification  pursuant  to 18 U.S.C.  Section  1350,  as adopted
               pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 (Chief
               Executive Officer)

     32.2 -    Certification  pursuant  to 18 U.S.C.  Section  1350,  as adopted
               pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 (Chief
               Financial Officer)


                                       24
<PAGE>
                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


Date:  August 17, 2004                        Applied DNA Sciences, Inc.

                                              /S/ Rob Hutchison
                                              -----------------
                                              Rob Hutchison
                                              Chief Executive Officer


                                              /S/ Rob Hutchison
                                              -------------------
                                              Rob Hutchison
                                              Acting Pricipal Financial Officer

                                       25