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 December 31, 2003

                        Commission file number: 2 90 519

                           APPLIED DNA SCIENCES, INC.
        (Exact name of small business issuer as specified in its charter)

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


          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                      20,635,344
      (Class)                             (Outstanding as of February 17, 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>

                              APPLIED DNA SCIENCES, INC.
                            (A DEVELOPMENT STAGE COMPANY)
                    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                        ASSETS

                                                                            December 31, 2003
                                                                              -----------
Current assets:
<S>                                                                              <C>
Cash and Equivalents .........................................................   $624,352
                                                                              -----------
Total Current Assets .........................................................    624,352

Property, Plant and Equipment - net ..........................................     29,156
Patents - net ................................................................     18,390
Deferred Financing Costs .....................................................    200,000
Deposits and Prepaid Expenses ................................................     23,559
                                                                              ------------

Total Assets .................................................................   $895,457
                                                                              ============

                 LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts Payable and Accrued Liabilities .....................................   $392,763
Accrued Liabilities Due Related Parties ......................................    170,498
Convertible Loans ............................................................    133,273
Due to Related Parties .......................................................    109,944
                                                                              ============
Total Current Liabilities ....................................................    806,478

Note Payable .................................................................     88,530

Commitments and Contingencies ................................................       --


Deficiency in Stockholders' Equity:
Preferred Stock, par value $.0001 per share; 10,000,000 shares authorized;           -0-
issued - Common Stock, par value $0.50 per share;    100,000,000 shares
authorized; 20,450,421 shares issued and oustanding                            10,225,211
Common Stock Subscription                                                         104,000
Additional Paid-In-Capital                                                        670,504
Deficit Accumulated During the Development Stage                              (10,999,266)
                                                                              ------------
                                                                                      449
Total Liabilities and Deficiency in Stockholders' Equity .....................   $895,457
                                                                              ============
</TABLE>
                 (See accompanying notes to unaudited condensed
                       consolidated financial statements)

                                       3
<PAGE>

                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   CONDENSED CONSOLIDATED STATEMENTS OF LOSSES
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                      For the Period,
                                                                     September 16, 2002,
                                      For The Three Months Ended     (Inception Date)
                                     December 31,     December 31,       through
                                         2003            2002         December 31,2003
                                    --------------    ------------    ------------

<S>                                   <C>            <C>             <C>
Revenues ..........................   $      --      $       --      $       --

Operating expenses:
Selling, general and administrative     7,407,750         147,191      10,887,725
Depreciation and amortization .....           351            --               351
                                      ------------    ------------    ------------
Total operating expenses ..........     7,408,101         147,191      10,888,076

Operating loss ....................    (7,408,101)       (147,191)    (10,888,076)

Other income (expense) ............           685            --            25,685
Interest expense ..................      (135,074)           --          (136,875)
                                      ------------    ------------    ------------

Net loss ..........................   $(7,542,490)   $   (147,191)   $(10,999,266)
                                      ============    ============    ============

Loss per common share
(basic and assuming dilution) .....   $     (0.41)   $      (0.01)
                                      ============    ============

Weighted average shares outstanding    18,503,162      10,397,385
                                      ============    ============
</TABLE>

                 (See accompanying notes to unaudited condensed
                       consolidated financial statements)

                                       4
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        CONDENSED STATEMENT OF DEFICIENCY
                     IN STOCKHOLDERS' EQUITY For the period
                   September 16, 2002 (Date of Incorporation)
                            through December 31, 2003
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                      Accumulated
                                                                         Additional       Stock         During
                                                 Common Stock             Paid-In       Subscription  Development
                                               Shares       Amount        Capital          Due          Stage       Total
                                             ------------    ------------ ----------- ------------ ------------- ------------
<S>                                          <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

Sale of Common Stock issued 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

Sale of Common Stock issued 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

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

                                        5
<PAGE>
Common Stock issued in exchange for
 consulting services at $2.50 per
 share, June 12, 2003.                         10,000              1        24,999           -             -       25,000

Sale of Common Stock issued at $1
 per share on June 17 2003.                    50,000              5        49,995           -             -       50,000

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

Common stock issued 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 for cash at $2.50
  per share in September 2003.                      -              -             -     300,000             -      300,000

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)  $ (577,427)

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 for subscription
 payable at $2.50 per share
 October 2003.                                120,000             12       299,988    (300,000)            -            -

                                       6
<PAGE>
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

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


Sale of Common stock subscribed for cash
 at $2.50 per share pursuant to private
 placement, Decemeber, 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 subscibed for cash at $2.50
 per share in December 2003.                        -              -             -     104,000             -      104,000


Common Stock subscibed for cash 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)          -             -            -

Net Loss.                                           -              -             -           -    (7,542,490)  (7,542,490)
                                          ------------  ------------    -----------  ---------- ------------- ------------
Balance at December 31, 2003.              20,450,421   $ 10,225,211     $ 670,504   $ 104,000  $(10,999,266)$        499
                                          ============  ============    ===========  ========== ============= ============
</TABLE>

                                       7
<PAGE>
                     APPLIED DNA SCIENCES, INC.
                   (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED STATEMENT OF CASH FLOWS
                            (Unaudited)
<TABLE>
<CAPTION>
                                                                                               For the period
                                                                                             September 16, 2002
                                                                                              (Inception Date)
                                                               For The Three Months Ended         through
                                                                December 31,      December 31,  December 31,
                                                                  2003               2002          2003
                                                               --------------   -------------   -------------
Cash flows from operating activities:
<S>                                                             <C>             <C>             <C>
Net loss from operating activities ..........................   $ (7,542,490)   $   (147,191)   $(10,999,266)
Adjustments to reconcile net loss to net
 cash provided by (used in) operating activities:
Depreciation ................................................            351            --               351
Amortization of beneficial conversion feature ...............        133,273                         133,273
Common stock retired ........................................           --              --            88,500
Common stock issued in exchange for services rendered .......      6,625,368          39,130       9,037,523
Common stock canceled-previously issued for services rendered       (282,000)           --          (282,000)
Changes in Assets and Liabilities: ..........................           --              --              --
Prepaid Expenses and Deposits ...............................        (23,559)                        (23,559)
Increase (decrease) in: .....................................           --
Accounts payable and accrued liabilities ....................        (61,589)        101,144         392,411
Cash disbursed in excess of available funds .................           --              --              --
                                                               --------------   -------------   -------------
Net cash provided by (used in) operating activities .........     (1,150,646)         (6,917)     (1,652,767)

Cash flows from investing activities:
Capital expenditures ........................................        (29,507)           --           (29,507)
                                                               --------------   -------------   -------------
Net cash provided by (used in) investing activities .........        (29,507)           --           (29,507)

Cash flows from financing activities:
Proceeds from sale of common stock, net of cost .............        266,000            --           698,000
Proceeds from ssubscription of common stock .................        104,000            --           104,000
Proceeds from sale of options ...............................         32,000            --           186,000
Advances from shareholders ..................................         34,004           7,000         143,596
Proceeds from loans .........................................      1,175,030            --         1,175,030
                                                               --------------   -------------   -------------
Net cash provided by (used in) financing activities .........      1,611,034           7,000       2,306,626

Net increase (decrease) in cash and cash equivalents ........        430,881              83         624,352
Cash and cash equivalents at beginning of period ............        193,471            --              --
                                                               --------------   -------------   -------------
Cash and cash equivalents at end of period ..................   $    624,352    $         83    $    624,352
                                                               ==============   =============   =============
Supplemental Disclosures of Cash Flow Information:
Cash paid during period for interest ........................   $       --      $       --              --
                                                               ==============   =============   =============
Cash paid during period for taxes ...........................   $       --      $       --              --
                                                               ==============   =============   =============
Non-cash transaction
Common stock issued for services ............................   $  6,625,368    $     39,130    $  9,037,523
                                                               ==============   =============   =============
Common stock canceled-previously issued for services rendered   $   (282,000)   $       --      $   (282,000)
                                                               ==============   =============   =============
Common stock retired ........................................   $       --      $       --      $     88,500
                                                               ==============   =============   =============
Acquisition
Common stock retained .......................................   $       --      $      1,015    $      1,015
                                                               ==============   =============   =============
Assets acquired .............................................   $       --      $        135    $        135
                                                               ==============   =============   =============
Acquisition cost ............................................   $       --      $        880    $        880
                                                               ==============   =============   =============
Deferred financing costs ....................................   $    200,000    $       --      $    200,000
                                                               ==============   =============   =============
Beneficial conversion feature relating to notes payable .....   $  1,168,474    $       --      $  1,168,474
                                                               ==============   =============   =============
Beneficial conversion feature relating to warrants ..........   $    206,526    $       --      $    206,526
                                                               ==============   =============   =============
</TABLE>
                 (See accompanying notes to unaudited condensed
                       consolidated financial statements)

                                       8
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002


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  period  ended  December 31, 2003 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  December 31,  2003,  the Company has  accumulated  losses of
$10,999,266.

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):

                                       9
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002


NOTE A - SUMMARY OF ACCOUNTING POLICIES (Continued)

Stock Based Compensation (Continued)
<TABLE>
<CAPTION>
                                                                                                    For the Period
                                                                                                    September 16,
                                                                                                    2002 (Date of
                                                                 For The Three     For The Three      Inception)
                                                                  Months ended     Months ended        through
                                                                  December 31,     December 31,      December 31,
                                                                      2003             2002              2003
<S>                                                                <C>  <C>            <C>            <C>
Net loss - as reported                                             $(7, 542,490)       $(147,191)     $(10,999,266)

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                                               $(7, 542,490)       $(147,191)     $(10,999,266)
                                                                   =============       ==========    ==============
Net loss attributable to common stockholders - Pro forma
                                                                   $(7, 542,490)       $(147,191)    $(10, 999,266)
                                                                   =============       ==========    ==============
Basic (and assuming dilution) loss per share - as reported             $  (0.40)        $  (0.01)         $  (0.63)
                                                                       =========       ==========         =========
Basic (and assuming dilution) loss per share - Pro forma               $  (0.40)        $  (0.01)         $  (0.63)
                                                                       =========       ==========         =========
</TABLE>

NOTE B - MERGER

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.

                                       10
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002


NOTE C - RELATED PARTY TRANSACTIONS

Included in current liabilities is $109,944 and $17,612 at December 31, 2003 and
2002,  respectively,  which  represents  advances from the  stockholders  of the
Company. No formal agreements or repayment terms exist.

Also,  the Company owed  $170,498  and  $18,045,  at December 31, 2003 and 2002,
respectively  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
December 31, 2003, 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  $10,225,211  and
decreased Additional Paid In Capital from $9,518,670 to $670,504. As of December
31, 2003,  the Company has issued and  outstanding  20,450,421  shares of common
stock.

In October 2003,  the Company  issued 255,439 shares of common stock in exchange
for consulting  services.  The Company valued the shares issued at approximately
$3.09 per share for a total of $788,418,  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  32,000  shares  of  common  stock  for
non-compensatory warrants exercised at $1.00 per share.

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

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.

                                       11
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE D - CAPITAL STOCK (Continued)

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 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

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 Outstanding           Exercisable
                                         Remaining          Weighted          Weighted          Weighted
                         Number         Contractual         Average           Average           Average
 Exercise Prices      Outstanding       Life (Years)     Exercise Price     Exercisable      Exercise Price
 ---------------      -----------                        --------------     -----------      --------------
<S>       <C>            <C>                     <C>             <C>           <C>                   <C>
          $1.00          306,000                 5               $1.00         306,000               $1.00
          $0.10          275,000                 5               $0.10         183,333               $0.10
          $3.20        1,375,000                 5               $3.20       1,375,000               $3.20
          $3.50           33,250                 2               $3.50          33,250               $3.50
          $3.50           45,500                 2               $3.50          45,500               $3.50
                      -----------                                           -----------
                       2,034,750                                             2,034,750
                      ===========                                           ===========
Transactions involving warrants are summarized as follows:
                                                       Number of Shares          Weighted Average
                                                                                  Price Per Share
       Outstanding at September 30, 2003                        383,500                 $   1.00
          Granted                                             1,683,250                     2.72
          Exercised                                             (32,000)                    1.00
          Canceled or expired                                         -                        -
                                                     -------------------
       Outstanding at December 31, 2003                       2,034,750                 $   2.42
                                                     ===================
</TABLE>
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 December 31, 2003 and 2002.

                                       12
<PAGE>
                           APPLIED DNA SCIENCES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE F - CONVERTIBLE PROMISSORY NOTES PAYABLE

A summary of convertible promissory notes payable at December 31, 2003
(Unaudited) and September 30, 2003 is as follows:

                                                               December 31, 2003
                                                                     (Unaudited)
                                                               -----------------
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.       $ 1,375,000

Debt Discount - beneficial conversion feature, net of
accumulated amortization of $129,831 as of December 31, 2003         (1,149,000)

Debt Discount - value attributable to warrants attached to
notes, net of accumulated amortization of $3,442 as of
December 31, 2003                                                      (203,084)
                                                               -----------------
                                                                $       133,273
                                                               =================
Convertible Debentures

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)  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.

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  $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  maturity
period of 5 years as interest expense.

In  connection  with the  placement of the Bridge  Offering  notes,  the Company
issued for each Unit  non-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)  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").  In
accordance with EMERGING ISSUES TASK FORCE ISSUE 00-27, APPLICATION OF ISSUE NO.
98-5 TO CERTAIN CONVERTIBLE  INSTRUMENTS ("EITF - 0027"), the Company recognized
the value  attributable  to the warrants in the amount of $206,526 to additional
paid in capital and a discount against the Bridge  Offering.  The Company valued
the warrants in accordance with EITF 00-27 using the Black-Scholes pricing model
and the following assumptions:

                                       13
<PAGE>
contractual  terms of 5 years,  an average risk free interest  rate of 1.00%,  a
dividend yield of 0.00%, and volatility of 22.9%.  The debt discount  attributed
to the value of the  warrants  issued is amortized  over the Bridge  Offering 's
maturity period 5 years as interest expense.

ITEM 2. MANAGEMENTS  DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FOR THE THREE
MONTHS ENDED DECEMBER 31, 2003

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
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.

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. The Company intends to pursue the building of a re-seller
network outside the United States, and if successful,  the re-seller  agreements
would constitute an additional  source of liquidity and capital over time...  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 and and
execution of re-seller agreements outside the Unites States.

During the three months ended  December 31, 2003 and 2002 and from September 16,
2002  (inception)  through  December 31 2003, the Company's  priorities  were to
recruit and build its team,  organize  its new  infrastructure  and to develop a
successful strategy how best to exploit its exclusive Biowell license agreement.
No revenues were  generated.  Expenses of $7,407,750,  $147,191 and  $10,887,775
were incurred  stemming  from general,  selling,  and  administrative  expenses.
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 December  31,  2003,  we had a working  capital  deficit of $71,770.  As a
result of our operating losses from our inception  through December 31, 2003, we
generated a cash flow deficit of $1,652,767  from operating  activities.  We met
our cash  requirements  during this period  from  advances of $143,596  from the
Company's officer and principal shareholders, cash proceeds received of $802,000
for  shares  sold,  and  $1,175,030  received  for  a  10%  Secured  Convertible
Promissory  Note to be issued  pursuant  to a  private  placement  offering  and
$186,000  received  as a result of  registered  options  exercised  at $1.00 per
shares.

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.

By adjusting its operations and  development  to the level of  capitalization  ,
management  believes it has sufficient  capital resources to meet projected cash
flow deficits through the next twelve months. However, if thereafter, 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.

                                       14
<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 their report
included in the Company's  September 30, 2003 Form 10-KSB,  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  December  2003,  we sold 27.5  units (the  "Units")  to
accredited investors at a price of $50,000 per Unit (the "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)  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.

Notes

The  aggregate  principal  amount of Notes  sold was  $1,375,000.  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,

                                       15
<PAGE>
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
(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.

Bridge Offering Warrants

Each  Unit,  or $50,000  principal  amount of the Note,  entitles  the holder to
50,000  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,  2003). per share.
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

                                       16
<PAGE>
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.

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

We do not  anticipate  the sale of any  material  property , plant or  equipment
during the next 12 months.  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

From our  inception  through the period  ended June 30, 2003 , we have relied on
the services of outside consultants for services and have no employees. 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.

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

                                       17
<PAGE>
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
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.

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
non-disclosure and 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 and trade secret
protection and  confidentiality  and/or  license  agreements  with  consultants,
employees, customers, partners and others 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,  If a third party claimed an intellectual property right
to  technology  the Company  uses,  the  Company  might 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 re-sellers 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 re-sellers 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.

                                       18
<PAGE>
ITEM 3. CONTROLS AND PROCEDURES

The Company's  management  including the Chief Executive Officer,  President and
Chief Financial Officer,  have evaluated,  within 90 days prior to the filing of
this  quarterly  report,  the  effectiveness  of  the  design,  maintenance  and
operation  of the  Company's  disclosure  controls  and  procedures.  Management
determined that the Company's  disclosure controls and procedures were effective
in ensuring that the information  required to be disclosed by the Company in the
reports  that it files  under the  Exchange  Act is  accurate  and is  recorded,
processed ,  summarized  and reported  within the time periods  specified in the
Commission's rules and regulations.

Disclosure controls and procedures, no matter how well designed and implemented,
can provide  only  reasonable  assurance  of  achieving  an entity's  disclosure
objectives.   The  likelihood  of  achieving  such  objectives  is  affected  by
limitations  inherent in disclosure  controls and procedures.  These include the
fact that  human  judgment  in  decision  making  can be fully  faulty  and that
breakdowns  in internal  control  can occur  because of human  failures  such as
errors or mistakes or intentional circumvention of the established process.

There have been no significant  changes in internal controls or in other factors
that could  significantly  affect these  controls  subsequent to the date of the
evaluation thereof,  including any corrective actions with regard to significant
deficiencies and material weaknesses.

PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         NONE


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

From October 7 through to October 30, 2003, we issued a total of 255,439  shares
of our Common Stock to eight consultants for their marketing, investor relations
and advisory  services.  These issuances are considered exempt from registration
by reason of the Section 4(2) of the Securities Act of 1933.

On October 9, 2003, we issued  120,000 shares to an investor in our 2003 Private
Placement of Units for total  proceeds of $300,000.  This issuance is considered
exempt from registration by reason of Section 4(2) of the Securities Act of 1933
as well as Regulation D of the Act, and Rule 506 promulgated thereunder.

In October  2003,  the Company  issued 32,000 shares of common stock in exchange
for previously issued  non-compensatory  warrants  exercised at $1.00 per share.
This issuance is considered  exempt from  registration by reason of Section 4(2)
of the Securities Act of 1933.

                                       19
<PAGE>
On November 3, 2003, we issued  100,000 shares to an employee as a signing bonus
and for sales  and  marketing  services  in lieu of  salary.  This  issuance  is
considered  exempt from registration by reason of Section 4(2) of the Securities
Act of 1933.

From  November 18, 2003 through  December 5, 2003,  we issued a total of 106,400
shares of our Common Stock to two  investors  in our 2003  Private  Placement of
Units for total proceeds of $266,000. These issuances are considered exempt from
registration  by reason of Section 4(2) of the Securities Act of 1933 as well as
Regulation D of the Act, and Rule 506 promulgated thereunder.

From  December 5 2003 through  December  24, 2004,  we issued a total of 275,500
shares of our Common  Stock to  consultants  and  employees  for their  investor
relations,   sales,  marketing  and  advisory  services.   These  issuances  are
considered  exempt  from  registration  by  reason  of the  Section  4(2) of the
Securities Act of 1933.

On December 17, 2003, we issued a total of 1,850,000  shares to ten  consultants
in connection with our agreement with the company's investment bankers, Vertical
Capital Partners,  Inc.. These issuances are considered exempt from registration
by reason of the Section 4(2) of the Securities Act of 1933.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         NONE

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

         NONE

ITEM 5.  OTHER INFORMATION

         NONE


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits


31.1     Principal Executive Officer certification pursuant to Rule 13a-14 and
         15d-14 under the Securities Exchange Act of 1934, as amended, as
         adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
         Filed herein.

31.2     Principal Financial Officer certification pursuant to Rule 13a-14 and
         15d-14 under the Securities Exchange Act of 1934, as amended, as
         adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
         Filed herein.

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

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

(b)      Reports on Form 8-K filed during the three months ended
         December 31, 2003.

                                       20
<PAGE>

     On December 3, 2003,  the Company filed a Current  Report on Form 8-K dated
November 26, 2003, reporting under Item 5, the NASD erroneously appended and "E"
to the Company's common stock symbol.


                                   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:   February 18, 2004                            Applied DNA Sciences, Inc.

                                                     /s/ Lawrence Lee
                                                     -----------------
                                                     Lawrence Lee
                                                     Chief Executive Officer

                                                     /s/Gerhard Wehr
                                                     ----------------
                                                     Gerhard Wehr
                                                     Chief Financial Officer

                                       21