Small Cap Network Blog

Thanks for all your comments and questions regarding this morning’s announcement that Applied DNA (APDN) was entering the anti-counterfeit wine arena. We agree - it’s a big deal, and could really boost the top and bottom line. It did raise a good question though…one we think is worth answering publicly. Richard writes…

You are missing one very important point in your evaluation of this company and product or service. When they find counterfeit product for their client will it be admissible in a court of law? What good does it do if a customer buys Applied DNA’s service and can’t protect a found counterfeit in court? Tell me law enforcement will accept the scientific findings of APDN and I will tell you that APDN is a rocket ship. Otherwise finding fraud with an methodology not accepted by a court means nothing.

Hi Richard. You are correct - all their ability is irrelevant without proper forensic-level testing. However, Applied DNA’s technology is indeed forensic-caliber, and therefore admissible in a court case.

We’ve touched on that a couple of times, though not recently….

http://www.smallcapnetwork.com/Applied-DNA-APDN-Enters-Into-Tentative-Agreement-with-Smiths-Detection-Biomatrix-BMSN-Submits-Documentation-for-Approval/af/archive/20080505-1/

http://www.smallcapnetwork.com/Hot-Penny-Stock-Applied-DNA-APDN-on-the-Verge-of-a-Breakout-Spicy-Pickle-SPKL-Announces-10-Stores-in-Houston/af/archive/20080204-1/

However, there’s also some discussion of this on their web site….
http://www.adnas.com/signature/dna_authentication

Also, the full details of their forensic capabilities can be studied in this recent SEC filing…
http://sec.edgar-online.com/2008/07/22/0001188112-08-002206/Section18.asp

In short, everything that has to do with SignatureDNA is court-admissible. Also, the testing of the wines’ grapes origins is forensic-friendly. It’s not based on SignatureDNA, but it can identify particular strands of DNA at a level detailed enough to achieve the same specificity as SignatureDNA, identifying a plant’s geographical origin.

In other words, everything we’ve looked at so far from Applied DNA will hold up in a court case.

One point to clarify though…the forensics test that a court case would require isn’t the field test, which only requires a hand-held scanner. If the quick, hand-held scan turns up something its user thinks is worth testing forensically, the label is then taken to a lab where proper forensic testing is done.

Hope that helps.

Are you a subscriber to the Small Cap Network newsletter? If not, you’re missing out on some great trading ideas and exclusive market commentary. To sign up, just go to the top right corner of any page of our website. You’ll be joining thousands of other subscribers who have already benefited from our news and views.