Filed Pursuant to Rule 424(b)(5)
Registration No. 333-170140
PROSPECTUS SUPPLEMENT NO. 3
(To Prospectus dated October 26, 2010)
SENESCO TECHNOLOGIES, INC.
3,846,154 Shares of Common Stock
Warrants to Purchase 1,923,077 Shares of Common Stock
And 1,923,077 Shares of Common Stock Underlying
the Warrants
In this prospectus supplement and any amendment
or supplement hereto, unless otherwise indicated, the terms “Senesco”, the “Company”, “we”,
“us” or “our” refer and relate to Senesco Technologies, Inc. We are offering for sale 3,846,154 shares
of our common stock, par value $0.01 per share, and warrants to purchase 1,923,077 shares of our common stock, pursuant to this
prospectus supplement. For each share of common stock, a warrant to purchase one-half of a share of common stock will also be issued.
The warrants will be exercisable on or after the date that is six months following the issuance date and will be exercisable on
or before the fifth anniversary of the issuance date at an exercise price of $0.286 per share of common stock. Each share of common
stock, together with the warrant, will be sold at a negotiated price of $0.26 per unit.
Our common stock is listed on the NYSE Amex LLC,
or NYSE Amex, under the symbol “SNT.” The last reported sale price of our common stock on the NYSE Amex on February
29, 2012 was $0.26 per share. The aggregate market value of our outstanding common stock was approximately $22,886,787, based on
88,026,028 shares of outstanding common stock, of which 13,236,912 shares are held by affiliates, at a price of $0.26 per share,
which was the last reported sale price of our common stock on the NYSE Amex on February 29, 2012. We have sold $3,167,305
securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on,
and includes, the date of this prospectus supplement.
We intend to use all of the net proceeds of this
offering, together with cash on hand, for general corporate purposes which may include research and development, sales and marketing,
general administrative expenses, working capital, capital expenditures, future acquisitions and repayment of debt. We may invest
the net proceeds temporarily until we use them for their stated purpose. One should read this prospectus supplement and any amendment
or supplement hereto together with the additional information about us described in the accompanying prospectus under the heading
“Where You Can Find Additional Information.”
Investing in our securities involves a high
degree of risk. Before deciding whether to invest in our securities, you should carefully consider the risks that we have described
in this prospectus supplement under the caption “Risk Factors” beginning on page S-5 of this prospectus supplement
and under the caption “Risk Factors” in the accompanying prospectus and in our most recently filed Quarterly Report
on Form 10-Q and Annual Report on Form 10-K, as amended, both as filed with the Securities and Exchange Commission, or SEC, which
are incorporated herein by reference in their entirety.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is March
2, 2012.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
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ABOUT THIS PROSPECTUS SUPPLEMENT
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S-1
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
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S-2
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PROSPECTUS SUPPLEMENT SUMMARY
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S-3
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THE OFFERING
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S-4
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RISK FACTORS
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S-5
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USE OF PROCEEDS
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S-19
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PRICE RANGE OF OUR COMMON STOCK
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S-19
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DIVIDEND POLICY
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S-19
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DILUTION
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S-19
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DESCRIPTION OF SECURITIES
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S-20
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PLAN OF DISTRIBUTION
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S-23
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LEGAL MATTERS
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S-24
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EXPERTS
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S-24
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
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S-24
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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S-24
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PROSPECTUS
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ABOUT THIS PROSPECTUS
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1
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ABOUT SENESCO TECHNOLOGIES, INC
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1
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
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13
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RISK FACTORS
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15
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DESCRIPTION OF THE SECURITIES WE MAY OFFER
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25
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WARRANTS
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25
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PREFERRED STOCK
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27
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COMMON STOCK
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BOOK-ENTRY PROCEDURES AND SETTLEMENT
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30
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USE OF PROCEEDS
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32
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PLAN OF DISTRIBUTION
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WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION OF DOCUMENTS BY REFERENCE
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35
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LEGAL MATTERS
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36
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EXPERTS
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You should rely on the information contained
in the prospectus supplement, the accompanying prospectus and the documents incorporated or deemed incorporated by reference herein
or therein. We have not authorized anyone to provide you with information different from and in addition to that contained in this
prospectus supplement, the accompanying prospectus or the documents incorporated or deemed incorporated by reference herein or
therein. We are not making an offer to sell or seeking an offer to buy these securities in any jurisdiction where the offer or
sale is not permitted.
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying
prospectus are part of a “shelf” registration statement on Form S-3 (File No. 333-170140) that we filed with the Securities
and Exchange Commission, or the SEC, and that was declared effective on November 9, 2010. This prospectus supplement describes
the specific details regarding this offering, including calculation of the price, the amount of common stock and warrants being
offered and the risks of investing in our securities. The accompanying prospectus provides general information about us, some of
which, such as the section entitled “Plan of Distribution,” may not apply to this offering. If information in this
prospectus supplement or any of the documents incorporated by reference into this prospectus supplement, as the case may be, is
inconsistent with the accompanying prospectus or any of the documents incorporated by reference into the accompanying prospectus,
you should rely on this prospectus supplement or any of the documents incorporated by reference into this prospectus supplement,
as the case may be. You should read both this prospectus supplement and the accompanying prospectus together with the additional
information about us described in the accompanying prospectus in the section entitled “Where You Can Find Additional Information.”
The information incorporated by reference is considered part of this prospectus supplement, and information we file later with
the SEC may automatically update and supersede this information. In this prospectus supplement and any amendment or supplement
hereto, unless otherwise indicated, the terms “Senesco”, the “Company”, “we”, “us”
or “our” refer and relate to Senesco Technologies, Inc.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus
supplement and in the documents incorporated by reference herein constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact may be
deemed to be forward-looking statements. Forward-looking statements frequently, but not always, use the words “may”,
“intends”, “plans”, “believes”, “anticipates” or “expects” or similar
words and may include statements concerning our strategies, goals and plans. All forward-looking statements are management’s
present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to
differ materially from those described in the forward-looking statements. In particular, our statements regarding the
ability of the Company to consummate additional financings, the development of the Company’s gene technology, the approval
of the Company’s patent applications, the successful implementation of the Company’s research and development programs
and collaborations, the success of the Company's license agreements, the acceptance by the market of the Company’s products,
the timing and success of the Company’s preliminary studies, preclinical research and clinical trials, competition and the
timing of projects and trends in future operating performance and the Company’s ability to comply with the continued listing
standards of the NYSE Amex are examples of such forward-looking statements. The forward-looking statements include risks
and uncertainties, including, but not limited to, our limited operating history, our need for additional capital to
fund our operations until we are able to generate a profit, the current economic environment, our dependence on a single principal
technology, our outsourcing of our research and development activities, our significant future capital needs, our dependence on
our patents and proprietary rights and the enforcement of these rights, the potential for our competitors or third parties to allege
that we are infringing upon their intellectual property rights, the potential that our security measures may not adequately protect
our unpatented technology, potential difficulty in managing our growth and expanding our operations, our lack of marketing or sales
history and dependence on third-party marketing partners, our potential future dependence on joint ventures and strategic alliances
to develop and market our technology, the intense competition in the human health and agricultural biotechnology industries, the
various government regulations that our business is subject to, the potential that our preclinical studies and clinical trials
of our human health applications may be unsuccessful, any inability to license from third parties their proprietary technologies
or processes which we use in connection with the development of our technology, the length, expense and uncertainty associated
with clinical trials for our human health technology, the potential that, even if we receive regulatory approval, consumers
may not accept products containing our technology, our dependence on key personnel, the potential that certain provisions of our
charter, by-laws and Delaware law could make a takeover difficult, increasing political and social turmoil, the potential that
our management and other affiliates, due to their significant control of our common stock have the ability to significantly influence
our actions, the potential that a significant portion of our total outstanding shares of common stock may be sold in the market
in the near future, the limited trading market of our common stock, the potential that our common stock may be delisted from the
NYSE Amex, fluctuations in the market price of our common stock, our dividend policy and potential for our stockholders to be diluted.
The following documents, among others, describe
these assumptions, risks, uncertainties, and other factors. You should read and interpret any forward-looking statements together
with these documents:
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the risk factors contained in any prospectus supplement under the caption “Risk Factors”;
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our most recent annual report on Form 10-K, as amended, including the sections entitled “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
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our quarterly reports on Form 10-Q; and
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our other SEC filings.
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In light of these assumptions, risks and uncertainties,
the results and events discussed in the forward-looking statements contained in this prospectus, any prospectus supplement or in
any document incorporated by reference in this prospectus might not occur. Investors are cautioned not to place undue reliance
on the forward-looking statements, which speak only of the date of this prospectus, the date of any prospectus supplement or the
date of the document incorporated by reference in this prospectus. We are not under any obligation, and we expressly disclaim any
obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required by applicable law. All subsequent forward-looking statements attributable to us are expressly qualified
in their entirety by the cautionary statements contained or referred to in this section.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information
contained elsewhere or incorporated by reference in this prospectus supplement and the accompanying prospectus. The summary may
not contain all the information that you should consider before investing in our securities. You should read the entire prospectus
supplement and the accompanying prospectus carefully, including “Risk Factors” contained in this prospectus supplement
and the documents incorporated by reference in the accompanying prospectus, before making an investment decision. This prospectus
supplement may add to, update or change information in the accompanying prospectus.
Overview
Senesco Technologies, Inc., a Delaware corporation,
is a development stage company. We do not expect to generate significant revenues for several years, during which time we will
engage in significant research and development efforts. Our human therapeutic research program, which has consisted of clinical,
pre-clinical in-vitro and in-vivo experiments designed to assess the role and method of action of the Factor 5A genes in human
diseases, is performed by approximately 12 third party researchers at our direction, at the University of Waterloo and other commercial
research facilities. We have developed a therapeutic candidate, SNS01-T, for the potential treatment of multiple myeloma. We have
performed efficacy, toxicological and dose-finding studies in vitro in non-human and human cells and in-vivo in mice for SNS01.
We have also completed our pivotal GLP toxicology studies in mice and dogs, employing SNS01-T, a slightly modified formulation
of SNS01, and have an open IND, with the FDA. We have also been granted orphan drug status for SNS01-T by the FDA for the potential
treatment of multiple myeloma. We recently initiated a Phase 1b/2a clinical study with SNS01-T for treatment of multiple myeloma
in September 2011. We are currently treating patients under this clinical study at Mayo Clinic and have recently added the University
of Arkansas for Medical Sciences as a second site. We may consider other human diseases in order to determine the role of Factor
5A and SNS01-T.
Additionally, we have eight active agricultural
license agreements to develop and commercialize our technology in banana plants, corn, soy, cotton, rice, canola, trees, alfalfa,
and turf grass. The licenses provide for upfront payments, milestone payments and royalty payments to us upon commercial introduction.
Consistent with our commercialization strategy,
we may license our technology for human health applications or for additional crops, as the opportunities may arise, that may result
in additional license fees, revenues from contract research and other related revenues. Successful future operations will depend
on our and our partners’ ability to transform our research and development activities into a commercially feasible technology.
Corporate Information
We were incorporated in Delaware in 1999. Our
principal business address is 721 Route 202/206, Suite 130, Bridgewater, New Jersey 08807. We maintain a website at www.senesco.com
(this is not a hyperlink; you must visit this website through your Internet browser). Our website and the information contained
therein or connected thereto are not incorporated into this prospectus supplement or the accompanying prospectus.
Available Information
We file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange Commission, or the SEC. You may read and copy any document
we file with the SEC at the SEC’s public reference rooms at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public from the
SEC’s Website at http://www.sec.gov. We make available free of charge our annual, quarterly and current reports, proxy statements
and other information upon request. To request such materials, please send an e-mail to jbrooks@senesco.com or contact Joel P.
Brooks, our Chief Financial Officer, Treasurer and Secretary at 721 Route 202/206, Suite 130, Bridgewater, New Jersey 08807, or
at (908) 864-4444.
THE OFFERING
Common stock offered by us
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3,846,154 shares
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Common stock to be outstanding after this offering
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91,872,182 shares
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Warrants we are offering
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Warrants to purchase up to 1,923,077 shares of common stock. For each share of common stock, a warrant to purchase one-half of a share of common stock will also be issued. The warrants will be exercisable on or after the date that is six months following the issuance date and will be exercisable on or before the fifth anniversary of the issuance date at an exercise price of $0.286 per share of common stock. This prospectus supplement also relates to the offering of 1,923,077 shares of common stock issuable upon exercise of the warrants.
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Use of proceeds
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We intend to use the net proceeds from this offering for general corporate purposes which may include research and development, sales and marketing, general administrative expenses, working capital, capital expenditures, future acquisitions and repayment of debt. We may invest the net proceeds temporarily until we use them for their stated purpose. See “Use of Proceeds” on page S-19.
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NYSE Amex symbol
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“SNT”
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Risk factors
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This investment involves a high degree of risk. See “Risk Factors” beginning on page S-5 of this prospectus supplement as well as the other information included in or incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of risks you should consider carefully before making an investment decision.
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The calculations above are based upon 80,864,443
shares of common stock outstanding as of December 31, 2011 and exclude:
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17,944,444 shares of common stock issuable upon the conversion of 4,845 shares of convertible preferred stock;
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54,059,032 shares of common stock underlying outstanding warrants;
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15,233,814 shares of common stock underlying options issued; and
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9,782,789 shares of common stock underlying options reserved but unissued.
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Unless otherwise indicated, this prospectus
supplement assumes the sale of the maximum number of securities offered hereunder.
RISK FACTORS
Before making an investment decision, you
should carefully consider the risks described in this prospectus supplement, together with all of the other information incorporated
by reference into this prospectus supplement and the accompanying prospectus, including from our most recent Annual Report on Form
10-K, as amended, and subsequent Quarterly Reports on Form 10-Q. The following risks are presented as of the date of this prospectus
supplement and we expect that these will be updated from time to time in our periodic and current reports filed with the SEC, which
will be incorporated herein by reference. Please refer to these subsequent reports for additional information relating to the risks
associated with investing in our common stock.
Our business, financial condition or results
of operations could be materially adversely affected by any of these risks. The trading price of our securities could decline due
to any of these risks, and you may lose part or all of your investment. This prospectus supplement, the accompanying prospectus
and the incorporated documents also contain forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the
risks mentioned below. Forward-looking statements included in this prospectus supplement are based on information available to
us on the date hereof, and all forward-looking statements in documents incorporated by reference are based on information available
to us as of the date of such documents. We disclaim any intent to update any forward-looking statements.
Risks Related to Our Business
We have a limited operating history and
have incurred substantial losses and expect to incur future losses
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We
are a development stage biotechnology company with a limited operating history and limited assets and capital. We have incurred
losses each year since inception and had an accumulated deficit
of $64,351,449 at
December 31,
2011. We have generated minimal revenues by licensing our technology for certain crops to companies willing to share in our development
costs. In addition, our technology may not be ready for commercialization for several years. We expect to continue to incur losses
for the next several years because we anticipate that our expenditures on research and development and administrative activities
will significantly exceed our revenues during that period. We cannot predict when, if ever, we will become profitable.
We will need additional capital to fund
our operations until we are able to generate a profit.
Our operations to date
have required significant cash expenditures. Our future capital requirements will depend on the results of our research and development
activities, preclinical and clinical studies, and competitive and technological advances.
We will need to obtain
more funding in the future through collaborations or other arrangements with research institutions and corporate partners, or public
and private offerings of our securities, including debt or equity financing. We may not be able to obtain adequate funds for our
operations from these sources when needed or on acceptable terms. Future collaborations or similar arrangements may require us
to license valuable intellectual property to, or to share substantial economic benefits with, our collaborators. If we raise additional
capital by issuing additional equity or securities convertible into equity, our stockholders may experience dilution and our share
price may decline. Any debt financing may result in restrictions on our spending.
If we are unable to raise
additional funds, we will need to do one or more of the following:
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delay, scale-back or eliminate some or all of our research and product
development programs;
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provide licenses to third parties to develop and commercialize products
or technologies that we would otherwise seek to develop and commercialize ourselves;
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seek strategic alliances or business combinations;
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attempt to sell our company;
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We
believe that at the projected rate of spending we should have sufficient cash to maintain our present operations through
August
2012. However, we have the ability to raise additional capital through our ATM facility, utilize our unused line of credit and,
if necessary, delay certain costs.
We may be adversely affected by the current
economic environment.
Our ability to obtain financing,
invest in and grow our business, and meet our financial obligations depends on our operating and financial performance, which in
turn is subject to numerous factors. In addition to factors specific to our business, prevailing economic conditions and financial,
business and other factors beyond our control can also affect our business and ability to raise capital. We cannot anticipate all
of the ways in which the current economic climate and financial market conditions could adversely impact our business.
Materials necessary to manufacture some
of our compounds currently under development may not be available on commercially reasonable terms, or at all, which may delay
our development and commercialization of these compounds.
Some of the materials necessary
for the manufacture of our compounds under development may, from time to time, be available either in limited quantities, or from
a limited number of manufacturers, or both. Our contract manufacturers need to obtain these materials for our clinical trials and,
potentially, for commercial distribution when and if we obtain marketing approval for these compounds. Suppliers may not sell us
these materials at the time we need them or on commercially reasonable terms. If we are unable to obtain the materials needed to
conduct our clinical trials, product testing and potential regulatory approval could be delayed, adversely affecting our ability
to develop the product candidates. Similarly, if we are unable to obtain critical manufacturing materials after regulatory approval
has been obtained for a product candidate, the commercial launch of that product candidate could be delayed or there could be a
shortage in supply, which could materially affect our ability to generate revenues from that product candidate. If suppliers increase
the price of manufacturing materials, the price for one or more of our products may increase, which may make our products less
competitive in the marketplace. If it becomes necessary to change suppliers for any of these materials or if any of our suppliers
experience a shutdown or disruption at the facilities used to produce these materials, due to technical, regulatory or other reasons,
it could harm our ability to manufacture our products.
We depend on a single
principal technology and, if our technology is not commercially successful, we will have no alternative source of revenue
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Our primary business is
the development and licensing of technology to identify, isolate, characterize and promote or silence genes which control the death
of cells in humans and plants. Our future revenue and profitability critically depend upon our ability, or our licensees’
ability, to successfully develop apoptosis and senescence gene technology and later license or market such technology. We have
conducted experiments on certain crops with favorable results and have conducted certain preliminary cell-line and animal experiments,
which have provided us with data upon which we have designed additional research programs. However, we cannot give any assurance
that our technology will be commercially successful or economically viable for any crops or human therapeutic applications.
In addition, no assurance
can be given that adverse consequences might not result from the use of our technology such as the development of negative effects
on humans or plants or reduced benefits in terms of crop yield or protection. Our failure to obtain market acceptance of our technology
or the failure of our current or potential licensees to successfully commercialize such technology would have a material adverse
effect on our business.
We outsource all
of our research and development activities and, if we are unsuccessful in maintaining our alliances with these third parties, our
research and development efforts may be delayed or curtailed.
We
rely on third parties to perform all of our research and development activities. Our research and development efforts take place
at the University of Waterloo in Ontario, Canada, where our technology was
discovered, at other commercial research facilities
and with our comme
rcial partners. At this time, we do not have the internal capabilities to perform
our own research and development activities. Accordingly, the failure of third party research partners to perform under agreements
entered into with us, or our failure to renew important research agreements with these third parties, may delay or curtail our
research and development efforts.
We have significant
future capital needs and may be unable to raise capital when needed, which could force us to delay or reduce our research and development
efforts.
As
of December 31,
2011, we had a cash balance of $1,552,898 and a working capital deficit of $235,129. Using our availab
le
reserves as of December 31, 2011 and the net proceeds of the public offering on January 6, 2012, we believe that we can
operate according to our current business plan through August 2012.
However, we have the ability
to raise additional capital through our ATM facility, utilize our unused line of credit and, if necessary, delay certain costs.
To date, we have generated
minimal revenues and anticipate that our operating costs will exceed any revenues generated over the next several years. Therefore,
we will be required to raise additional capital in the future in order to operate in accordance with our current business plan,
and this funding may not be available on favorable terms, if at all. If we are unable to raise additional funds, we will need to
do one or more of the following:
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delay, scale back or eliminate some or all of our research and development
programs;
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provide a license to third parties to develop and commercialize our
technology that we would otherwise seek to develop and commercialize ourselves;
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seek strategic alliances or business combinations;
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attempt to sell our company;
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In
addition, in connection with any funding, if we need to issue more equity securities than our certificate of incorporation currently
authorizes, or more than 20% of the shares of our common stock outstanding, we may need stockholder approval. If stockholder approval
is not obtained or if adequate funds are not available, we may be required to curtail operations significantly or to obtain funds
through arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies,
product candidates, products or potential markets. Investors may experience dilution in their investment from future offerings
of our common stock. For example, if we raise additional capital by issuing equity securities, such an issuance would reduce the
percentage ownership of existing stockholders. In addition, assuming the exercise of all options and warrants outstanding and the
conversion of the preferred stock into common stock, as of December 31, 2011, we
had 151,258,135 shares
of common stock authorized but unissued and unreserved, which may be issued from time to time by our board of directors. Furthermore,
we may need to issue securities that have rights, preferences and privileges senior to our common stock. Failure to obtain financing
on acceptable terms would have a material adverse effect on our liquidity.
Since our inception, we
have financed all of our operations through equity and debt financings. Our future capital requirements depend on numerous factors,
including:
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the scope of our research and development;
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our ability to attract business partners willing to share in our development
costs;
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our ability to successfully commercialize our technology;
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competing technological and market developments;
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our ability to enter into collaborative arrangements for the development,
regulatory approval and commercialization of other products; and
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the cost of filing, prosecuting, defending and enforcing patent claims
and other intellectual property rights.
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Our business depends
upon our patents and proprietary rights and the enforcement of these rights. Our failure to obtain and maintain patent protection
may increase competition and reduce demand for our technology.
As a result of the substantial
length of time and expense associated with developing products and bringing them to the marketplace in the biotechnology and agricultural
industries, obtaining and maintaining patent and trade secret protection for technologies, products and processes is of vital importance.
Our success will depend in part on several factors, including, without limitation:
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our ability to obtain patent protection for our technologies and processes;
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our ability to preserve our trade secrets; and
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our ability to operate without infringing the proprietary rights of
other parties both in the United States and in foreign countries.
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As of December 31, 2011,
we have been issued twenty-four (24) patents by the PTO and seventy-eight (78) patents from foreign countries
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We have also filed numerous patent applications for our technology in the United States and in several foreign countries, which
technology is vital to our primary business, as well as several continuations in part on these patent applications. Our success
depends in part upon the grant of patents from our pending patent applications.
Although we believe that
our technology is unique and that it will not violate or infringe upon the proprietary rights of any third party, we cannot assure
you that these claims will not be made or if made, could be successfully defended against. If we do not obtain and maintain patent
protection, we may face increased competition in the United States and internationally, which would have a material adverse effect
on our business.
Since patent applications
in the United States are maintained in secrecy until patents are issued, and since publication of discoveries in the scientific
and patent literature tend to lag behind actual discoveries by several months, we cannot be certain that we were the first creator
of the inventions covered by our pending patent applications or that we were the first to file patent applications for these inventions.
In addition, among other
things, we cannot assure you that:
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our patent applications will result in the issuance of patents;
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any patents issued or licensed to us will be free from challenge and
if challenged, would be held to be valid;
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any patents issued or licensed to us will provide commercially significant
protection for our technology, products and processes;
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other companies will not independently develop substantially equivalent
proprietary information which is not covered by our patent rights;
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other companies will not obtain access to our know-how;
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other companies will not be granted patents that may prevent the commercialization
of our technology; or
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we will not incur licensing fees and the payment of significant other
fees or royalties to third parties for the use of their intellectual property in order to enable us to conduct our business.
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Our competitors
may allege that we are infringing upon their intellectual property rights, forcing us to incur substantial costs and expenses in
resulting litigation, the outcome of which would be uncertain.
Patent law is still evolving
relative to the scope and enforceability of claims in the fields in which we operate. We are like most biotechnology companies
in that our patent protection is highly uncertain and involves complex legal and technical questions for which legal principles
are not yet firmly established. In addition, if issued, our patents may not contain claims sufficiently broad to protect us against
third parties with similar technologies or products, or provide us with any competitive advantage.
The PTO and the courts
have not established a consistent policy regarding the breadth of claims allowed in biotechnology patents.
The allowance of broader claims may increase the incidence and cost of patent interference proceedings and the risk of infringement
litigation. On the other hand, the allowance of narrower claims may limit the scope and value of our proprietary rights.
The laws of some foreign
countries do not protect proprietary rights to the same extent as the laws of the United States, and many companies have encountered
significant problems and costs in protecting their proprietary rights in these foreign countries.
We could become involved
in infringement actions to enforce and/or protect our patents. Regardless of the outcome, patent litigation is expensive and time
consuming and would distract our management from other activities. Some of our competitors may be able to sustain the costs of
complex patent litigation more effectively than we could because they have substantially greater resources. Uncertainties resulting
from the initiation and continuation of any patent litigation could limit our ability to continue our operations.
If our technology
infringes the intellectual property of our competitors or other third parties, we may be required to pay license fees or damages.
If any relevant claims
of third party patents that are adverse to us are upheld as valid and enforceable, we could be prevented from commercializing our
technology or could be required to obtain licenses from the owners of such patents. We cannot assure you that such licenses would
be available or, if available, would be on acceptable terms. Some licenses may be non-exclusive and, therefore, our competitors
may have access to the same technology licensed to us. In addition, if any parties successfully claim that the creation or use
of our technology infringes upon their intellectual property rights, we may be forced to pay damages, including treble damages.
Our security measures
may not adequately protect our unpatented technology and, if we are unable to protect the confidentiality of our proprietary information
and know-how, the value of our technology may be adversely affected.
Our success depends upon
know-how, unpatentable trade secrets, and the skills, knowledge and experience of our scientific and technical personnel. As a
result, all employees agreed to a confidentiality provision in their employment agreement that prohibited the disclosure of confidential
information to anyone outside of our company, during the term of employment and for five (5) years thereafter. The employment agreements
have since been terminated, but the period of confidentiality is still in effect. We also require all employees to disclose and
assign to us the rights to their ideas, developments, discoveries and inventions. We also attempt to enter into similar agreements
with our consultants, advisors and research collaborators. We cannot assure you that adequate protection for our trade secrets,
know-how or other proprietary information against unauthorized use or disclosure will be available.
We occasionally provide
information to research collaborators in academic institutions and request that the collaborators conduct certain tests. We cannot
assure you that the academic institutions will not assert intellectual property rights in the results of the tests conducted by
the research collaborators, or that the academic institutions will grant licenses under such intellectual property rights to us
on acceptable terms, if at all. If the assertion of intellectual property rights by an academic institution is substantiated, and
the academic institution does not grant intellectual property rights to us, these events could limit our ability to commercialize
our technology.
As we evolve from
a company primarily involved in the research and development of our technology into one that is also involved in the commercialization
of our technology, we may have difficulty managing our growth and expanding our operations.
As our business grows,
we may need to add employees and enhance our management, systems and procedures. We may need to successfully integrate our internal
operations with the operations of our marketing partners, manufacturers, distributors and suppliers to produce and market commercially
viable products. We may also need to manage additional relationships with various collaborative partners, suppliers and other organizations.
Although we do not presently conduct research and development activities in-house, we may undertake those activities in the future.
Expanding our business may place a significant burden on our management and operations. We may not be able to implement improvements
to our management information and control systems in an efficient and timely manner and we may discover deficiencies in our existing
systems and controls. Our failure to effectively respond to such changes may make it difficult for us to manage our growth and
expand our operations.
We have no marketing
or sales history and depend on third party marketing partners. Any failure of these parties to perform would delay or limit our
commercialization efforts.
We have no history of marketing,
distributing or selling biotechnology products, and we are relying on our ability to successfully establish marketing partners
or other arrangements with third parties to market, distribute and sell a commercially viable product both here and abroad. Our
business plan envisions creating strategic alliances to access needed commercialization and marketing expertise. We may not be
able to attract qualified sub-licensees, distributors or marketing partners, and even if qualified, these marketing partners may
not be able to successfully market agricultural products or human therapeutic applications developed with our technology. If our
current or potential future marketing partners fail to provide adequate levels of sales, our commercialization efforts will be
delayed or limited and we may not be able to generate revenue.
We will depend on
joint ventures and strategic alliances to develop and market our technology and, if these arrangements are not successful, our
technology may not be developed and the expenses to commercialize our technology will increase.
In its current state of
development, our technology is not ready to be marketed to consumers. We intend to follow a multi-faceted commercialization strategy
that involves the licensing of our technology to business partners for the purpose of further technological development, marketing
and distribution. We have and are seeking business partners who will share the burden of our development costs while our technology
is still being developed, and who will pay us royalties when they market and distribute products incorporating our technology upon
commercialization. The establishment of joint ventures and strategic alliances may create future competitors, especially in certain
regions abroad where we do not pursue patent protection. If we fail to establish beneficial business partners and strategic alliances,
our growth will suffer and the continued development of our technology may be harmed.
Competition in the
human therapeutic and agricultural biotechnology industries is intense and technology is changing rapidly. If our competitors market
their technology faster than we do, we may not be able to generate revenues from the commercialization of our technology.
Many
human therapeutic and agricultural biotechnology companies are engaged in research and development activities relating to apoptosis
and senescence. The market for plant protection and yield enhancement products is intensely competitive, rapidly changing and undergoing
consolidation. We may be unable to compete successfully against our current and future competitors, which may result in price reductions,
reduced margins and the inability to achieve market acceptance for products containing our technology. Our competitors in the field
of plant senescence gene technology are companies that develop and produce transgenic plants and include major international agricultural
companies, specialized biotechnology companies, research and academic institutions and, potentially, our joint venture and strategic
alliance partners. These companies include:
Mendel Biotechnology, Inc.; Renessen LLC; Exelixis Plant Sciences, Inc.; and
Syngenta International AG; among others. Some of our competitors that are involved in apoptosis research include: Celgene, Inc.;
Takeda/Millennium; ONYX Pharmaceuticals, Inc.; Amgen Inc.; Centocor, Inc.; Novartis AG; and Genta Incorporated.
Many of these competitors have substantially greater financial, marketing, sales, distribution and technical resources than us
and have more experience in research and development, clinical trials, regulatory matters, manufacturing and marketing. We anticipate
increased competition in the future as new companies enter the market and new technologies become available. Our technology may
be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our
competitors, which will prevent or limit our ability to generate revenues from the commercialization of our technology.
Our business is
subject to various government regulations and, if we or our licensees are unable to obtain regulatory approval, we may not be able
to continue our operations.
At present, the U.S. federal
government regulation of biotechnology is divided among three agencies:
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the United States Department of Agriculture, or USDA, regulates the
import, field testing and interstate movement of specific types of genetic engineering that may be used in the creation of transgenic
plants;
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the United States Environmental Protection Agency, or EPA, regulates
activity related to the invention of plant pesticides and herbicides, which may include certain kinds of transgenic plants; and
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the FDA regulates foods derived from new plant varieties.
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The FDA requires that transgenic
plants meet the same standards for safety that are required for all other plants and foods in general. Except in the case of additives
that significantly alter a food’s structure, the FDA does not require any additional standards or specific approval for genetically
engineered foods, but expects transgenic plant developers to consult the FDA before introducing a new food into the marketplace.
Use of our technology,
if developed for human therapeutic applications, is also subject to FDA regulation. The FDA must approve any drug or biologic product
before it can be marketed in the United States. In addition, prior to being sold outside of the United States, any products resulting
from the application of our human therapeutic technology must be approved by the regulatory agencies of foreign governments. Prior
to filing a new drug application or biologics license application with the FDA, we would have to perform extensive clinical trials,
and prior to beginning any clinical trial, we would need to perform extensive preclinical testing which could take several years
and may require substantial expenditures.
We
believe that our current agricultural activities, which to date have been confined to research and development efforts, do not
require licensing or approval by any governmental regulatory agency. However, we
are
performing
clinical trials in connection with our human therapeutic applications, which is subject to FDA approval. Additionally, federal,
state and foreign regulations relating to crop protection products and human therapeutic applications developed through biotechnology
are subject to public concerns and political circumstances, and, as a result, regulations have changed and may change substantially
in the future. Accordingly, we may become subject to governmental regulations or approvals or become subject to licensing requirements
in connection with our research and development efforts. We may also be required to obtain such licensing or approval from the
governmental regulatory agencies described above, or from state agencies, prior to the commercialization of our genetically transformed
plants and human therapeutic technology. In addition, our marketing partners who utilize our technology or sell products grown
with our technology may be subject to government regulations. If unfavorable governmental regulations are imposed on our technology
or if we fail to obtain licenses or approvals in a timely manner, we may not be able to continue our operations.
Preclinical studies
of our human therapeutic applications may be unsuccessful, which could delay or prevent regulatory approval.
Preclinical studies may
reveal that our human therapeutic technology is ineffective or harmful, and/or may be unsuccessful in demonstrating efficacy and
safety of our human therapeutic technology, which would significantly limit the possibility of obtaining regulatory approval for
any drug or biologic product manufactured with our technology. The FDA requires submission of extensive preclinical, clinical and
manufacturing data to assess the efficacy and safety of potential products. Any delay in receiving approval for any applicable
IND from the FDA would result in a delay in the commencement of the related clinical trial. Additionally, we could be required
to perform additional preclinical studies prior to the FDA approving any applicable IND. Furthermore, the success of preliminary
studies does not ensure commercial success, and later-stage clinical trials may fail to confirm the results of the preliminary
studies.
Our success will
depend on the success of our clinical trials of our human therapeutic applications.
It may take several years
to complete the clinical trials of a product, and failure of one or more of our clinical trials can occur at any stage of testing.
We believe that the development of our product candidate involves significant risks at each stage of testing. If clinical trial
difficulties and failures arise, our product candidate may never be approved for sale or become commercially viable.
There are a number of difficulties
and risks associated with clinical trials. These difficulties and risks may result in the failure to receive regulatory approval
to sell our product candidate or the inability to commercialize our product candidate. The possibility exists that:
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we may discover that the product candidate does not exhibit the expected therapeutic results in
humans, may cause harmful side effects or have other unexpected characteristics that may delay or preclude regulatory approval
or limit commercial use if approved;
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the results from early clinical trials may not be statistically significant or predictive of results
that will be obtained from expanded advanced clinical trials;
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institutional review boards or regulators, including the FDA, may hold, suspend or terminate our
clinical research or the clinical trials of our product candidate for various reasons, including noncompliance with regulatory
requirements or if, in their opinion, the participating subjects are being exposed to unacceptable health risks;
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subjects may drop out of our clinical trials;
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our preclinical studies or clinical trials may produce negative, inconsistent or inconclusive results,
and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials; and
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the cost of our clinical trials may be greater than we currently anticipate.
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Clinical trials
for our human therapeutic technology will be lengthy and expensive and their outcome is uncertain.
Before obtaining regulatory
approval for the commercial sales of any product containing our technology, we must demonstrate through clinical testing that our
technology and any product containing our technology is safe and effective for use in humans. Conducting clinical trials is a time-consuming,
expensive and uncertain process and typically requires years to complete. In our industry, the results from preclinical studies
and early clinical trials often are not predictive of results obtained in later-stage clinical trials. Some products and technologies
that have shown promising results in preclinical studies or early clinical trials subsequently fail to establish sufficient safety
and efficacy data necessary to obtain regulatory approval. At any time during clinical trials, we or the FDA might delay or halt
any clinical trial for various reasons, including:
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occurrence of unacceptable toxicities or side effects;
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ineffectiveness of the product candidate;
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negative or inconclusive results from the clinical trials, or results
that necessitate additional studies or clinical trials;
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delays in obtaining or maintaining required approvals from institutions,
review boards or other reviewing entities at clinical sites;
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delays in patient enrollment; or
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insufficient funding or a reprioritization of financial or other resources.
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Any failure or substantial
delay in successfully completing clinical trials and obtaining regulatory approval for our product candidates could severely harm
our business.
If our clinical trials
for our product candidates are delayed, we would be unable to commercialize our product candidates on a timely basis, which would
materially harm our business.
Planned clinical trials
may not begin on time or may need to be restructured after they have begun. Clinical trials can be delayed for a variety of reasons,
including delays related to:
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obtaining an effective IND or regulatory approval to commence a clinical trial;
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negotiating acceptable clinical trial agreement terms with prospective trial sites;
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obtaining institutional review board approval to conduct a clinical trial at a prospective site;
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recruiting qualified subjects to participate in clinical trials;
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competition in recruiting clinical investigators;
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shortage or lack of availability of supplies of drugs for clinical trials;
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the need to repeat clinical trials as a result of inconclusive results or poorly executed testing;
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the placement of a clinical hold on a study;
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the failure of third parties conducting and overseeing the operations of our clinical trials to
perform their contractual or regulatory obligations in a timely fashion; and
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exposure of clinical trial subjects to unexpected and unacceptable health risks or noncompliance
with regulatory requirements, which may result in suspension of the trial.
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We believe that our product
candidate has significant milestones to reach, including the successful completion of clinical trials, before commercialization.
If we have significant delays in or termination of clinical trials, our financial results and the commercial prospects for our
product candidates or any other products that we may develop will be adversely impacted. In addition, our product development costs
would increase and our ability to generate revenue could be impaired.
Any inability to
license from third parties their proprietary technologies or processes which we use in connection with the development of our technology
may impair our business.
Other companies, universities
and research institutions have or may obtain patents that could limit our ability to use our technology in a product candidate
or impair our competitive position. As a result, we would have to obtain licenses from other parties before we could continue using
our technology in a product candidate. Any necessary licenses may not be available on commercially acceptable terms, if at all.
If we do not obtain required licenses, we may not be able to develop our technology into a product candidate or we may encounter
significant delays in development while we redesign methods that are found to infringe on the patents held by others.
Even if we receive
regulatory approval, consumers may not accept products containing our technology, which will prevent us from being profitable since
we have no other source of revenue.
We cannot guarantee that
consumers will accept products containing our technology. Recently, there has been consumer concern and consumer advocate activism
with respect to genetically-engineered agricultural consumer products. The adverse consequences from heightened consumer concern
in this regard could affect the markets for agricultural products developed with our technology and could also result in increased
government regulation in response to that concern. If the public or potential customers perceive our technology to be genetic modification
or genetic engineering, agricultural products grown with our technology may not gain market acceptance.
We face potential
product liability exposure far in excess of our limited insurance coverage.
We may be held liable
if any product we or our collaborators develop causes injury or is found otherwise unsuitable during product testing, manufacturing,
marketing or sale. Regardless of merit or eventual outcome, product liability claims could result in decreased demand for our product
candidates, injury to our reputation, withdrawal of patients from our clinical trials, substantial monetary awards to trial participants
and the inability to commercialize any products that we may develop. These claims might be made directly by consumers, health care
providers, pharmaceutical companies or others selling or testing our products. We have obtained limited product liability insurance
coverage for our clinical trials; however, our insurance may not reimburse us or may not be sufficient to reimburse us for expenses
or losses we may suffer. Moreover, if insurance coverage becomes more expensive, we may not be able to maintain insurance coverage
at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If we obtain marketing approval for
any of our product candidates, we intend to expand our insurance coverage to include the sale of commercial products, but we may
be unable to obtain commercially reasonable product liability insurance for any products approved for marketing. On occasion, juries
have awarded large judgments in class action lawsuits for claims based on drugs that had unanticipated side effects. In addition,
the pharmaceutical and biotechnology industries, in general, have been subject to significant medical malpractice litigation. A
successful product liability claim or series of claims brought against us could harm our reputation and business and would decrease
our cash reserves.
We depend on our
key personnel and, if we are not able to attract and retain qualified scientific and business personnel, we may not be able to
grow our business or develop and commercialize our technology.
We are highly dependent
on our scientific advisors, consultants and third-party research partners. Our success will also depend in part on the continued
service of our key employees and our ability to identify, hire and retain additional qualified personnel in an intensely competitive
market. Although we have a research agreement with Dr. John Thompson, this agreement may be terminated upon short or no notice.
Additionally, we do not have employment agreements with our key employees. We do not maintain key person life insurance on any
member of management. The failure to attract and retain key personnel could limit our growth and hinder our research and development
efforts.
Certain provisions
of our charter, by-laws, Delaware law and stock plans could make a takeover difficult.
Certain provisions of our
certificate of incorporation and by-laws could make it more difficult for a third party to acquire control of us, even if the change
in control would be beneficial to stockholders. Our certificate of incorporation authorizes our board of directors to issue, without
stockholder approval, except as may be required by the rules of the NYSE Amex, 5,000,000 shares of preferred stock with voting,
conversion and other rights and preferences that could adversely affect the voting power or other rights of the holders of our
common stock.
In addition, we are subject
to the Business Combination Act of the Delaware General Corporation Law which, subject to certain exceptions, restricts certain
transactions and business combinations between a corporation and a stockholder owning 15% or more of the corporation’s outstanding
voting stock for a period of three years from the date such stockholder becomes a 15% owner. These provisions may have the effect
of delaying or preventing a change of control of us without action by our stockholders and, therefore, could adversely affect the
value of our common stock.
Furthermore, in the event
of our merger or consolidation with or into another corporation, or the sale of all or substantially all of our assets in which
the successor corporation does not assume our outstanding equity awards or issue equivalent equity awards, our current equity plans
require the accelerated vesting of such outstanding equity awards.
Risks Related to Our Common Stock
We currently do
not meet the NYSE Amex continued listing standards. If our common stock is delisted from the NYSE Amex, we may not be able to list
on any other stock exchange, and our common stock may be subject to the “penny stock” regulations which may affect
the ability of our stockholders to sell their shares.
The NYSE Amex requires
us to meet minimum financial requirements in order to maintain our listing. Currently, we do not meet the $6,000,000 minimum net
worth continued listing requirement of the NYSE Amex Exchange
and have received a notice of noncompliance
from the NYSE Amex Exchange. We submitted a plan of compliance on November 17, 2011 to the NYSE Amex Exchange discussing how we
intend to regain compliance with the continued listing requirements. The NYSE Amex Exchange has accepted our plan and granted us
an extension until July 20, 2012 to regain compliance with the NYSE Amex’s continuing listing standards, however, if we are
unable to meet the plan, it is possible that we will be delisted.
If we are delisted from the NYSE Amex, our common stock
likely will become a “penny stock.” In general, regulations of the SEC define a “penny stock” to be an
equity security that is not listed on a national securities exchange and that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to certain exceptions. If our common stock becomes a penny stock,
additional sales practice requirements would be imposed on broker-dealers that sell such securities to persons other than certain
qualified investors. For transactions involving a penny stock, unless exempt, a broker-dealer must make a special suitability determination
for the purchaser and receive the purchaser’s written consent to the transaction prior to the sale. In addition, the rules
on penny stocks require delivery, prior to and after any penny stock transaction, of disclosures required by the SEC.
If our stock is not accepted
for listing on the NYSE Amex, we will make every possible effort to have it listed on the Over the Counter Bulletin Board, or the
OTC Bulletin Board. If our common stock was to be traded on the OTC Bulletin Board, the Securities Exchange Act of 1934, as amended,
and related SEC rules would impose additional sales practice requirements on broker-dealers that sell our securities. These rules
may adversely affect the ability of stockholders to sell our common stock and otherwise negatively affect the liquidity, trading
market and price of our common stock.
We
believe that the listing of our common stock on a recognized national trading market, such as the NYSE Amex, is an important part
of our business and strategy. Such a listing helps our stockholders by providing a readily available trading market with current
quotations. Without that, stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale
or purchase of our stock would likely be made more difficult and the trading volume and liquidity of our stock would likely decline.
The absence of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded it by other
parties.
In that regard, the absence of a listing on a recognized national trading market will also affect our ability to
benefit from the use of our operations and expansion plans, including for use in licensing agreements, joint ventures, the development
of strategic relationships and acquisitions, which are critical to our business and strategy and none of which is currently the
subject of any agreement, arrangement or understanding, with respect to any future financing or strategic relationship we may undertake.
A delisting from the NYSE Amex could result in negative publicity and could negatively impact our ability to raise capital in the
future.
Our management and
other affiliates have significant control of our common stock and could significantly influence our actions in a manner that conflicts
with our interests and the interests of other stockholders.
As
of December 31, 2011, our executive officers and directors together beneficially own
approximately 32.7% of
the outstanding shares of our common stock, assuming the conversion of preferred stock and exercise of options and warrants which
are currently exercisable or will become exercisable within 60 days of December 31, 2011, held by these stockholders. As a result,
these stockholders, acting together, will be able to exercise significant influence over matters requiring approval by our stockholders,
including the election of directors, and may not always act in the best interests of other stockholders. Such a concentration of
ownership may have the effect of delaying or preventing a change in control of us, including transactions in which our stockholders
might otherwise receive a premium for their shares over then-current market prices.
A significant portion
of our total outstanding shares of common stock may be sold in the market in the near future, which could cause the market price
of our common stock to drop significantly.
As
of December 31, 2011, we
had 80,864,443 shares of our common stock issued and outstanding and 4,845 shares of convertible
preferred stock outstanding which can convert into 17,944,444 shares of common stock. Approximately 34,164,431 shares of such shares
are registered pursuant to registration statements on Form S-3 and 64,644,456 of which are either eligible to be sold under SEC
Rule 144 or are in the public float. In addition, we have registered 35,890,007 shares of our common stock underlying warrants
previously issued on Form S-3 registration statements
and we registered
23,005,003
shares of our common stock underlying options granted or to be granted under our stock option plan. Consequently, sales of substantial
amounts of our common stock in the public market, or the perception that such sales could occur, may have a material adverse effect
on our stock price.
Our common stock
has a limited trading market, which could limit your ability to resell your shares of common stock at or above your purchase price.
Our
common stock is quoted on the NYSE Amex and currently has a limited trading market. The NYSE Amex requires us to meet minimum financial
requirements in order to maintain
our listing. Currently, we do not meet the continued listing requirements of the NYSE
Amex. If
we do not regain compliance with the continued listing standards, we could be delisted. We
cannot assure you that an active trading market will develop or, if developed, will be maintained. As a result, our stockholders
may find it difficult to dispose of shares of our common stock and, as a result, may suffer a loss of all or a substantial portion
of their investment.
The market price
of our common stock may fluctuate and may drop below the price you paid.
We cannot assure you that
you will be able to resell the shares of our common stock at or above your purchase price. The market price of our common stock
may fluctuate significantly in response to a number of factors, some of which are beyond our control. These factors include:
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quarterly variations in operating results;
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the progress or perceived progress of our research and development efforts;
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changes in accounting treatments or principles;
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announcements by us or our competitors of new technology, product and
service offerings, significant contracts, acquisitions or strategic relationships;
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additions or departures of key personnel;
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future offerings or resales of our common stock or other securities;
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stock market price and volume fluctuations of publicly-traded companies
in general and development companies in particular; and
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general political, economic and market conditions.
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For example, during the
quarter ended December 31, 2011, our common stock traded between $0.16 and $0.29 per share
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Because we do not
intend to pay, and have not paid, any cash dividends on our shares of common stock, our stockholders will not be able to receive
a return on their shares unless the value of our common stock appreciates and they sell their shares.
We have never paid or declared
any cash dividends on our common stock, and we intend to retain any future earnings to finance the development and expansion of
our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Therefore, our stockholders
will not be able to receive a return on their investment unless the value of our common stock appreciates and they sell their shares.
Our stockholders
may experience substantial dilution as a result of the conversion of convertible preferred stock, the exercise of options and warrants
to purchase our common stock, or due to anti-dilution provisions relating to any on the foregoing.
As of December 31, 2011,
we have outstanding 4,845 shares of convertible preferred stock which may convert into 17,944,444 shares of our common stock and
warrants to purchase 54,059,032 shares of our common stock. In addition, as of December 31, 2011, we have reserved 25,016,603
shares of our common stock for issuance upon the exercise of options granted or available to be granted pursuant to our stock option
plan, all of which may be granted in the future. Furthermore, in connection with the preferred stock agreements, we are required
to reserve an additional 20,857,343 shares of common stock. The conversion of the convertible preferred stock and the exercise
of these options and warrants will result in dilution to our existing stockholders and could have a material adverse effect on
our stock price. The conversion price of the convertible preferred stock and certain warrants are also subject to certain anti-dilution
adjustments.
Risks Related to This Offering
Our management team will have broad discretion
over the use of the net proceeds from this offering.
Our management will use their discretion to
direct the net proceeds from this offering. We intend to use all of the net proceeds, together with cash on hand, for general corporate
purposes. General corporate purposes may include sales and marketing activities, clinical studies, research and development, capital
expenditures, future acquisitions, working capital and repayment of debt. Our management’s judgments may not result in positive
returns on your investment and you will not have an opportunity to evaluate the economic, financial or other information upon which
our management bases its decisions.
Investors in this offering will experience
immediate and substantial dilution.
The public offering price of the securities
offered pursuant to this prospectus supplement is substantially higher than the net tangible book value per share of our common
stock. Therefore, if you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in
the pro forma net tangible book value per share of common stock from the price per share that you pay for the common stock. If
the holders of outstanding options or warrants exercise those options or warrants at prices below the public offering price, you
will incur further dilution.
There is no public market for the warrants
to purchase common stock in this offering.
There is no established public trading market
for the warrants being offered in this offering, and we do not expect a market to develop. In addition, we do not intend to apply
for listing the warrants on any securities exchange, including the NYSE Amex, or any nationally recognized trading system. Without
an active market, the liquidity of the warrants will be limited.
The warrants may not have any value.
The warrants have an exercise price of $0.286
per share and can be exercised commencing on the date that is six months following the date of issuance until the fifth anniversary
of the date of issuance. In the event our common stock price does not exceed the exercise price of the warrants during the period
when the warrants are exercisable, the warrants may not have any value.
USE OF PROCEEDS
We estimate that the net proceeds we will receive
from this offering, excluding proceeds, if any, from the exercise of the warrants issued in this offering, will be approximately$995,000,
after deducting estimated offering expenses.
Except as described in any free writing prospectus
that we may authorize to be provided to you, we currently intend to use the net proceeds from the sale of the securities offered
by us hereunder for general corporate purposes which may include research and development, sales and marketing, general administrative
expenses, working capital, capital expenditures, future acquisitions and repayment of debt. We may invest the net proceeds temporarily
until we use them for their stated purpose.
We have not determined the amounts we plan to
spend on any of the areas listed above or the timing of these expenditures. As a result, our management will have broad discretion
to allocate the net proceeds from this offering. Pending application of the net proceeds as described above, we expect to invest
the net proceeds in short-term, interest-bearing, investment-grade securities pursuant to our investment policy.
PRICE RANGE OF OUR COMMON STOCK
Our common stock is currently listed on the
NYSE Amex under the symbol “SNT”. The following table sets forth, for the periods indicated, the high and low sales
prices per share of our common stock as reported by the NYSE Amex. These prices do not include retail markups, markdowns or commissions.
Fiscal Quarter Ended
|
|
High
|
|
|
Low
|
|
December 31, 2011
|
|
$
|
0.29
|
|
|
$
|
0.16
|
|
September 30, 2011
|
|
$
|
0.31
|
|
|
$
|
0.18
|
|
June 30, 2011
|
|
$
|
0.32
|
|
|
$
|
0.24
|
|
March 31, 2011
|
|
$
|
0.36
|
|
|
$
|
0.23
|
|
December 31, 2010
|
|
$
|
0.33
|
|
|
$
|
0.22
|
|
September 30, 2010
|
|
$
|
0.42
|
|
|
$
|
0.25
|
|
June 30, 2010
|
|
$
|
0.75
|
|
|
$
|
0.30
|
|
March 31, 2010
|
|
$
|
0.51
|
|
|
$
|
0.25
|
|
December 31, 2009
|
|
$
|
0.49
|
|
|
$
|
0.30
|
|
September 30, 2009
|
|
$
|
0.83
|
|
|
$
|
0.43
|
|
As of December 31, 2011, the last reported sale
price of our common stock on the NYSE Amex was $0.26 per share. On December 31, 2011, there were 286 holders of record and approximately
2,400 beneficial holders of our common stock.
DIVIDEND POLICY
To date, we have paid no cash dividends to our
stockholders and we do not intend to pay cash dividends in the foreseeable future.
DILUTION
If you invest in our common stock and warrants,
your ownership interest will be diluted by the difference between the price per share you pay and the net tangible book value per
share of our common stock immediately after this offering.
Our net tangible book value as of December 31,
2011, as adjusted for the net proceeds from an equity placement on January 6, 2012 in the amount of $1,807,012, was $1,005,426,
or $0.011 per share of common stock. Net tangible book value per share is calculated by subtracting our total liabilities from
our total tangible assets, which is total assets less intangible assets, and dividing this amount by the number of shares of common
stock outstanding. After giving effect to the sale of our common stock in the aggregate amount of $1,000,000 at an assumed offering
price of $0.26 per share, the last reported sale price of our common stock on the NYSE Amex as of December 31, 2011, and after
deducting estimated offering commissions and expenses payable by us, our net tangible book value as of December 31, 2011 would
have been $2,000,426, or $0.022 per share of common stock. This represents an immediate increase in the net tangible book value
of $0.011 per share to our existing stockholders and an immediate and substantial dilution in net tangible book value of $0.011
per share to new investors. The following table illustrates this per share dilution:
Assumed offering price per share
|
|
$
|
0.26
|
|
Net tangible book value per share as of December 31, 2011, as adjusted
|
|
$
|
0.011
|
|
Increase per share attributable to new investors
|
|
$
|
0.011
|
|
|
|
|
|
|
As-adjusted net tangible book value per share after this offering
|
|
$
|
0.022
|
|
|
|
|
|
|
Net dilution per share to new investors
|
|
$
|
0.011
|
|
The calculations above are based upon 80,864,443
shares of common stock outstanding as of December 31, 2011 plus an additional 7,161,585 shares of common stock issued on January
6, 2012 and exclude:
|
|
|
|
·
|
17,944,444 shares of common stock issuable upon the conversion of 4,845 shares of convertible preferred stock;
|
|
·
|
57,062,904, including 3,003,872 issued on January 6,2012, shares of common stock underlying outstanding warrants;
|
|
·
|
15,233,814 shares of common stock underlying options issued; and
|
|
·
|
9,782,789 shares of common stock underlying options reserved but unissued.
|
To the extent options or warrants outstanding
as of December 31, 2011 have been or may be exercised or other shares are issued, there may be further dilution to new investors.
DESCRIPTION OF SECURITIES
The shares of common stock and warrants being
offered in this offering will be issued pursuant to a securities purchase agreement. We urge you to review the securities purchase
agreement and our certificate of incorporation, and our by-laws that are incorporated by reference into the registration statement
or may be incorporated by reference in this prospectus supplement. The terms of these securities may also be affected by Delaware
General Corporation Law. The summary below and that contained in the accompanying prospectus are qualified in their entirety by
reference to our certificate of incorporation and our by-laws.
In this offering, we are offering 3,846,154
shares of common stock and five year warrants to purchase 1,923,077 shares of common stock. For each share of common stock, a warrant
to purchase one-half of a share of common stock at an exercise price of $0.286 per share of common stock will also be issued. Each
share of common stock, together with the warrant, will be sold at a negotiated price of $0.26 per unit. This prospectus also relates
to the offering of 1,923,077 shares of common stock issuable upon exercise, if any, of the warrants.
Common Stock
Under our certificate of incorporation, as amended
to date, we are authorized to issue up to 350,000,000 shares of common stock, $0.01 par value per share. At December 31, 2011,
approximately 80,864,443 shares of common stock were issued and outstanding. The following description of our common stock, certificate
of incorporation and bylaws are only summaries, and we encourage you to review complete copies of these documents. You can obtain
copies of these documents by following the directions outlined in “Where You Can Find More Information; Incorporation of
Documents by Reference”.
Dividends, Voting Rights and Liquidation
Each stockholder of record is entitled to one
vote for each outstanding share of our common stock owned by that stockholder on every matter properly submitted to the stockholders
for their vote. After satisfaction of the dividend rights of holders of any preferred stock, holders of common stock are entitled
to any dividend declared by our board out of funds legally available for that purpose. After the payment of liquidation preferences
to holders of any preferred stock, holders of common stock are entitled to receive, on a pro rata basis, all our remaining assets
available for distribution to stockholders in the event of our liquidation, dissolution or winding up. Holders of common stock
do not have any preemptive right to become subscribers or purchasers of additional shares of any class of our capital stock. The
rights, preferences and privileges of holders of common stock are subject to, and may be injured by, the rights of the holders
of shares of any series of preferred stock that we may designate and issue in the future.
Transfer Agent and Registrar
American Stock Transfer and Trust Company is
the transfer agent and registrar for our common stock.
Delaware Law and Certain Certificate of Incorporation and
By-Law Provisions
The provisions of Delaware law and of our certificate
of incorporation and by-laws discussed below could discourage or make it more difficult to accomplish a proxy contest or other
change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is possible
that these provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may otherwise
consider to be in their best interests or the best interests of Senesco.
|
·
|
Business Combinations
. We are subject to the provisions of Section 203 of the General Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to specified exceptions, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s voting stock.
|
|
·
|
Limitation of Liability; Indemnification
. Our certificate of incorporation contains provisions permitted under the General Corporation Law of Delaware relating to the liability of directors. The provisions eliminate, to the extent legally permissible, a director’s liability for monetary damages for a breach of fiduciary duty, except in circumstances involving wrongful acts, such as the breach of a director’s duty of loyalty or acts or omissions that involve intentional misconduct or a knowing violation of law. The limitation of liability described above does not alter the liability of our directors and officers under federal securities laws. Furthermore, our certificate of incorporation contains provisions to indemnify our directors and officers to the fullest extent permitted by the General Corporation Law of Delaware. These provisions do not limit or eliminate our right or the right of any shareholder of ours to seek non-monetary relief, such as an injunction or rescission in the event of a breach by a director or an officer of his duty of care to us. We believe that these provisions assist us in attracting and retaining qualified individuals to serve as directors.
|
Warrants
The following summary of certain terms and
provisions of the warrants offered hereby is not complete and is subject to, and qualified in its entirety by reference to, the
terms and provisions set forth in the form of warrant to be filed by us on Form 8-K. Prospective investors should carefully review
the terms and provisions set forth in the form of warrant.
Exercise Price
The exercise price per share of common stock
purchasable upon exercise of the warrants is $0.286 per share of common stock being purchased. If we, at any time while the warrants
are outstanding, pay a stock dividend on our common stock or otherwise make a distribution on any class of capital stock that is
payable in shares of our common stock, subdivide outstanding shares of our common stock into a larger number of shares or combine
the outstanding shares of our common stock into a smaller number of shares, then, the number, class and type of shares available
under the warrants and the exercise price will be correspondingly adjusted to give the holder of the warrants, on exercise for
the same aggregate exercise price, the total number, class, and type of shares or other property as the holder would have owned
had the warrants been exercised prior to the event and had the holder continued to hold such shares until the event requiring adjustment.
Exercisability
Holders may exercise the five year warrants
beginning on the date that is six months following the original issuance and at any time up to the date that is five years after
such original issuance date.
Outstanding
There are currently 3,003,872 warrants outstanding.
Transferability
The warrants may be transferred at the option
of the warrant holder and upon consent by the Company upon surrender of the warrants with the appropriate instruments of transfer.
Rights as a Stockholder
Except with respect to dividends or other distributions
in which a holder has received an adjustment to the exercise price in accordance with the warrants, the holders of the warrants
have the right to participate in dividends or other distributions of our assets (or rights to acquire our assets) to the same extent
that such holder would have participated if such holder held the number of shares of common stock underlying such warrants at the
time of the distribution.
Except as otherwise provided above or by virtue
of such holder’s ownership of shares of our common stock, the holders of the warrants do not have any additional rights or
privileges of holders of our common stock, including any voting rights, until they exercise their warrants.
Reorganization
In the event of a reorganization, recapitalization,
reclassification, consolidation or merger involving the Company in which the Company’s common stock is converted or exchanged
for securities, cash or other property (a “Reorganization”), then, following such Reorganization, the holders of the
warrants shall receive upon exercise of the warrants the kind and amount of securities, cash or other property that the holders
of such warrants would have been entitled to receive pursuant to the Reorganization if such holders had exercised their warrants
prior to the occurrence of such Reorganization. Notwithstanding the foregoing, if (x) there shall occur any Reorganization in which
the Company’s common stock is converted into or exchanged for anything other than solely equity securities, and (y) the common
stock of the acquiring or surviving company is publicly traded, then, as part of such Reorganization, (i) the holders of the warrants
shall have the right to receive upon the exercise of the warrants such number of shares of common stock of the acquiring or surviving
company as set forth in the warrants.
PLAN OF DISTRIBUTION
The Company will solicit offers to purchase
the shares and warrants in this offering. No placement agent nor any broker-dealer or FINRA member has been retained for this offering.
In connection with the Company’s selling
efforts in the offering, the Company will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, but rather
will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Exchange Act. Generally speaking,
Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with
an issuer that participate in an offering of the issuer’ securities. Each of our officers and directors is not subject to
a statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Each of our officers and directors
will not be compensated in connection with his participation in the offering by payment of commissions or other remuneration based
either directly or indirectly on transactions in our securities. Each of our officers and directors is not now, nor have they been
within the past 12 months, a broker or dealer, and they have not been, within the past 12 months, an associated person of a broker
or dealer. At the end of the offering, each of our officers and directors will continue to primarily perform substantial duties
for the Company or on its behalf otherwise than in connection with transactions in securities. Each of our officers and directors
will not and has not participated in selling an offering of securities for any issuer more than once every 12 months other than
in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).
In order to comply with the applicable securities
laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for
sale, exempted from such registration or if a qualification requirement is available and with which the Company has complied. In
addition, and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under
the Exchange Act with regarding to security transactions during the period of time when this Registration Statement is effective.
We are subject to Regulation M of the Exchange
Act. Regulation M governs activities of underwriters, issuers, selling security holders and others in connection with offerings
of securities. Regulation M prohibits distribution participants and their affiliated purchasers from bidding for, purchasing or
attempting to induce any person to bid for or purchase the securities being distributed.
The Company proposes to arrange for the sale
of the shares and warrants it is offering pursuant to this prospectus supplement to one or more investors through a securities
purchase agreement directly between the investors and the Company. All of the shares and warrants will be sold at the same price
and, we expect, at a single closing. We established the price following negotiations with prospective investors and with reference
to the prevailing market price of our common stock, recent trends in such price and other factors. It is possible that not all
of the shares and warrants we are offering pursuant to this prospectus supplement will be sold at the closing, in which case our
net proceeds would be reduced. We expect that the sale of the shares and warrants will be completed on the date indicated on the
cover page of this prospectus supplement.
In connection with this offering, the Company
may distribute this prospectus supplement and the accompanying prospectus electronically.
The estimated offering expenses payable by us
are approximately $5,000, which includes legal and printing costs and various other fees associated with registering and listing
the common stock. After deducting our estimated offering expenses, we expect the net proceeds from this offering to be approximately
$995,000.
LEGAL MATTERS
The validity of the shares of common stock being
offered has been passed upon for us by Morgan, Lewis & Bockius LLP, Princeton, New Jersey.
EXPERTS
McGladrey & Pullen, LLP, independent registered
public accounting firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K, for
the year ended June 30, 2011, as amended, as set forth in their report, which is incorporated by reference in this prospectus supplement
and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on McGladrey
& Pullen, LLP’s report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
This prospectus supplement is part of a registration
statement on Form S-3 that we filed with the SEC. The registration statement that contains this prospectus supplement, including
the exhibits to the registration statement, contains additional information about us and the securities offered by this prospectus
supplement.
We file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information
on the Public Reference Room. The SEC maintains an Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC, including Senesco Technologies, Inc. The SEC’s
Internet site can be found at
http://www.sec.gov
.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference”
into this prospectus supplement the information we have filed with the SEC. The information we incorporate by reference into this
prospectus supplement is an important part of this prospectus. Any statement in a document we incorporate by reference into this
prospectus supplement or the accompanying prospectus will be considered to be modified or superseded to the extent a statement
contained in this prospectus supplement or any other subsequently filed document that is incorporated by reference into this prospectus
supplement modifies or supersedes that statement. The modified or superseded statement will not be considered to be a part of this
prospectus supplement or the accompanying prospectus, as applicable, except as modified or superseded.
We incorporate by reference into this prospectus
supplement the information contained in the documents listed below, which is considered to be a part of this prospectus supplement:
|
·
|
Our Annual Report on Form 10-K, for the year ended June 30, 2011, filed on September 28, 2011, as amended on October 24, 2011;
|
|
·
|
Our Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2011 and December 31, 2011;
|
|
·
|
Our Current Reports on Form 8-K filed with the SEC on August 8, 2011, August 24, 2011, October 26, 2011, November 3, 2011, November 30, 2011, December 1, 2011, December 19, 2011, December 27, 2011, January 3, 2012, January 5, 2012, January 9, 2012, February 14, 2012 and March 1, 2012;
|
|
·
|
Our Proxy Statement on Schedule 14A filed with the SEC on November 1, 2011; and
|
|
·
|
The description of our capital stock contained in our Registration Statement on Form 8-A filed on May 14, 2002.
|
We also incorporate by reference all documents
filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus supplement and prior
to the termination of this offering; provided, however, that we are not incorporating any information furnished under Item 2.02
or Item 7.01 of any current report on Form 8-K we may subsequently file.
Statements made in this prospectus supplement
or the accompanying prospectus or in any document incorporated by reference in this prospectus supplement or the accompanying prospectus
as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an exhibit to the documents incorporated by reference,
each such statement being qualified in all material respects by such reference.
You may request a copy of these filings, at no
cost, by sending an e-mail to jbrooks@senesco.com and requesting any one or more of such filings or by contacting Joel Brooks,
our Chief Financial Officer at the following address or telephone number: Senesco Technologies, Inc., 721 Route 202/206, Suite
130, Bridgewater, NJ 08807, Attention: Chief Financial Officer; (908) 864-4444. Exhibits to the documents will not be sent, unless
those exhibits have specifically been incorporated by reference in this prospectus.
PROSPECTUS
$25,000,000
WARRANTS
PREFERRED STOCK
COMMON STOCK
Senesco Technologies, Inc. may from time to time
offer to sell warrants, preferred stock and/or common stock, separately or together in one or more combinations. The warrants and
preferred stock may be convertible into or exercisable or exchangeable for common stock or preferred stock or other securities
of Senesco Technologies, Inc. or any other party identified in the applicable prospectus supplement.
Our common stock is traded on the NYSE Amex under
the symbol “SNT”. The last reported sale of our common stock on the NYSE Amex on October 25, 2010 was $0.2312
per share. Our principal offices are located at 303 George Street, Suite 420, New Brunswick, New Jersey 08901. Our telephone
number is (732) 296-8400.
The total amount of warrants, preferred stock
and common stock will have an initial aggregate offering price of up to $25,000,000, or the equivalent amount in other currencies,
currency units or composite currencies.
The securities covered by this prospectus may
be offered and sold to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed
basis.
This prospectus describes some of the general
terms that may apply to these securities and the general manner in which they may be offered. The specific terms of any securities
to be offered, and the specific manner in which they may be offered, will be described in one or more supplements to this prospectus.
The aggregate market value of our outstanding
common equity held by non-affiliates on October 25, 2010 was approximately $12,045,105. We have not issued any securities pursuant
to Instruction I.B.6 of Form S-3 during the 12 calendar month period that ends on and includes the date hereof.
INVESTING IN OUR SECURITIES INVOLVES A HIGH
DEGREE OF RISK. RISKS ASSOCIATED WITH AN INVESTMENT IN OUR SECURITIES WILL BE DESCRIBED IN THE APPLICABLE PROSPECTUS SUPPLEMENT
AND CERTAIN OF OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, AS DESCRIBED UNDER THE SECTION ENTITLED “RISK FACTORS”
ON PAGE 13 OF THIS PROSPECTUS. THE PROSPECTUS SUPPLEMENT APPLICABLE TO EACH TYPE OR SERIES OF SECURITIES WE OFFER MAY
CONTAIN A DISCUSSION OF ADDITIONAL RISKS APPLICABLE TO AN INVESTMENT IN US AND THE PARTICULAR TYPE OF SECURITIES WE ARE OFFERING
UNDER THAT PROSPECTUS SUPPLEMENT.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is ,
2010
EXPLANATORY NOTE
The prospectus contained herein relates to the
general description of warrants, preferred stock and common stock issuable by Senesco Technologies, Inc.
To the extent required, the information in the
prospectus, including financial information, will be updated at the time of each offering. Upon each such offering, a prospectus
supplement to the base prospectus will be filed.
TABLE OF CONTENTS
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|
Page
|
|
|
|
ABOUT THIS PROSPECTUS
|
|
1
|
ABOUT SENESCO TECHNOLOGIES, INC
|
|
1
|
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
|
13
|
RISK FACTORS
|
|
15
|
DESCRIPTION OF THE SECURITIES WE MAY OFFER
|
|
25
|
WARRANTS
|
|
25
|
PREFERRED STOCK
|
|
27
|
COMMON STOCK
|
|
29
|
BOOK-ENTRY PROCEDURES AND SETTLEMENT
|
|
30
|
USE OF PROCEEDS
|
|
32
|
PLAN OF DISTRIBUTION
|
|
33
|
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION OF DOCUMENTS BY REFERENCE
|
|
35
|
LEGAL MATTERS
|
|
36
|
EXPERTS
|
|
36
|
You should rely only on the information provided in this prospectus
and the prospectus supplement, as well as the information incorporated by reference. We have not authorized anyone to provide you
with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus, the prospectus supplement or any documents incorporated by reference
is accurate as of any date other than the date of the applicable document.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
on Form S-3 that we filed with the U.S. Securities and Exchange Commission, referred to herein as the SEC, using a “shelf”
registration process. Under a shelf registration process, we may issue, in one or more offerings, any combination of
senior or subordinated warrants, preferred stock or common stock, collectively referred to herein as the securities, up to a total
dollar amount of $25,000,000.
Each time we sell these securities we will provide
you with a prospectus supplement containing specific information about the terms of each such sale. This prospectus
may not be used to sell any of the securities unless accompanied by a prospectus supplement. The prospectus supplement
also may add, update or change information in this prospectus. If there is any inconsistency between the information in the prospectus
and the prospectus supplement, you should rely on the information in the prospectus supplement. You should read both
this prospectus and any prospectus supplement together with additional information described under the heading “Where You
Can Find More Information; Incorporation of Documents by Reference” beginning on page 34 of this prospectus.
Unless otherwise indicated or unless the context
otherwise requires, all references in this prospectus to “we,” “us,” or similar references mean Senesco
Technologies, Inc. and our subsidiaries.
You should rely only on the information contained
in this prospectus or in a prospectus supplement or amendment. We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. We may offer to sell, and seek offers to buy these securities
only in jurisdictions where offers and sales are permitted. The information contained in this prospectus or a prospectus supplement
or amendment or incorporated herein by reference is accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of securities.
ABOUT SENESCO TECHNOLOGIES, INC.
GENERAL
Our Business
The primary business of Senesco Technologies,
Inc., a Delaware corporation incorporated in 1999, and its wholly-owned subsidiary, Senesco, Inc., a New Jersey corporation incorporated
in 1998, collectively referred to as “Senesco,” “we,” “us” or “our,” is to utilize
our patented and patent-pending genes, primarily eucaryotic translation initiation Factor 5A, or Factor 5A, and deoxyhypusine synthase,
or DHS, and related technologies for inhibition in human health applications to develop novel approaches to treat inflammatory
diseases and cancer.
In agricultural applications we are developing
and licensing Factor 5A, DHS and Lipase to enhance the quality and productivity of fruits, flowers, and vegetables and agronomic
crops through the control of cell death, referred to herein as senescence, and growth in plants.
Human Health Applications
We believe that our gene technology could have
broad applicability in the human health field, by either inducing or inhibiting apoptosis. Inducing apoptosis may be
useful in treating certain forms of cancer because the cancerous cells have failed to initiate apoptosis on their own due to damaged
or inhibited apoptotic pathways. Inhibiting apoptosis may be useful in preventing or treating a wide range of inflammatory
and ischemic diseases attributed to premature apoptosis.
We have commenced preclinical
in-vivo
and
in-vitro
research to determine the ability of Factor 5A to regulate key execution genes, pro-inflammatory cytokines,
receptors, and transcription factors, which are implicated in numerous apoptotic diseases.
Certain preclinical human health results to
date include:
|
·
|
Performing efficacy, toxicological and dose-finding studies in mice for our potential multiple myeloma drug candidate, SNS-01-T. SNS-01-T is a nano-encapsulated combination therapy of Factor 5A and an siRNA against Factor 5A. Our efficacy study in severe combined immune-deficient (“SCID”) mice with subcutaneous human multiple myeloma tumors tested SNS-01-T dosages ranging from 0.15 mg/kg to 1.5 mg/kg. In these studies, mice treated with a dose of either 0.75 mg/kg or 1.5 mg/kg both showed a 91% reduction in tumor volume and a decrease in tumor weight of 87% and 95%, respectively. For mice that received smaller doses of either 0.38 mg/kg or 0.15 mg/kg, there was also a reduction in tumor volume (73% and 61%, respectively) and weight (74% and 36%, respectively). All of the treated mice, regardless of dose, survived. This therapeutic dose range study provided the basis for an 8-day maximum tolerated dose study in which normal mice received two intravenous doses of increasing amounts of SNS-01-T (from 2.2 mg/kg). Body weight, organ weight and serum levels of liver enzymes were used as clinical indices to assess toxicity. A dose between 2.2 mg/kg and 2.9 mg/kg was well tolerated with respect to these clinical indices, and the survival rate at 2.9 mg/kg was 80%. Those mice receiving above 2.9 mg/kg of SNS-01-T showed evidence of morbidity and up to 80% mortality. The 2.9 mg/kg threshold, twice the upper end of the proposed therapeutic dose range, was therefore determined to be the maximum tolerated dose in mice;
|
|
·
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Demonstrated significant tumor regression and diminished rate of tumor growth of multiple myeloma tumors in SCID mice treated with Factor 5A technology encapsulated in nanoparticles;
|
|
·
|
Increased median survival by approximately 250% in a tumor model of mice injected with melanoma cancer cells;
|
|
·
|
Induced apoptosis in both human cancer cell lines derived from tumors and in lung tumors in mice;
|
|
·
|
Induced apoptosis of cancer cells in a human multiple myeloma cell line in the presence of IL-6;
|
|
·
|
Measured VEGF reduction in mouse lung tumors as a result of treatment with our genes;
|
|
·
|
Decreased ICAM and activation of NFkB in cancer cells employing siRNA against Factor 5A;
|
|
·
|
Increased the survival rate in H1N1 mouse influenza survival studies from 14% in untreated mice to 52% in mice treated with our siRNA against Factor 5A. Additionally, the treated mice reversed the weight loss typically seen in infected mice and had other reduced indicators of disease severity as measured by blood glucose and liver enzymes;
|
|
·
|
Increased the survival, while maintaining functionality, of mouse pancreatic islet cells isolated for transplantation, using intraperitoneal administration of our technology. Initial animal studies have shown that our technology administered prior to harvesting beta islet cells from a mouse, has a significant impact not only on the survival of the beta islet cells, but also on the retention of the cells’ functionality when compared to the untreated beta islet cells. Additional studies have shown that the treated beta islet cells survive a pro-inflammatory cytokine challenge, while maintaining their functionality with respect to insulin production. These further studies also revealed Factor-5A’s involvement in the modulation of inducible nitric oxide synthase (iNOS), an important indicator of inflammation; and
|
|
·
|
Increased the survival rate of mice in a lethal challenge sepsis model. Additionally, a broad spectrum of systemic pro-inflammatory cytokines were down-regulated, while not effecting the anti-inflammatory cytokine IL-10.
|
Accelerating Apoptosis
The data from our pre-clinical studies indicate
that the up-regulation of Factor 5A induces cell death in cancer cells through both the p53 (intrinsic) and cell death receptor
(extrinsic) apoptotic pathways. Tumors arise when abnormal cells fail to undergo apoptosis due to an inability to activate their
apoptotic pathways. Just as the Factor 5A gene appears to facilitate expression of the entire suite of genes required for programmed
cell death in plants, the Factor 5A gene appears to regulate expression of a suite of genes required for programmed cell death
in human cells. Because the Factor 5A gene appears to function at the initiation point of the apoptotic pathways, both intrinsic
and extrinsic, we believe that our gene technology has potential application as a means of combating a broad range of cancers. Based
on the results obtained through our
in-vitro
studies, we have found that up-regulating Factor 5A results in: (i) the up-regulation
of p53; (ii) increased inflammatory cytokine production; (iii) increased cell death receptor formation; and (iv) increased caspase
activity. These features, coupled with a simultaneous down-regulation Bcl-2, result in apoptosis of cancer cells. In
addition, our
in-vitro
studies have shown that the up-regulation of Factor 5A also down-regulates VEGF, a growth factor
which allows tumors to develop additional vascularization needed for growth beyond a small mass of cells.
Inhibiting Apoptosis
Our preclinical studies indicate that down-regulation
of our proprietary Factor 5A gene may have potential application as a means for controlling the effects of a broad range of diseases
that are attributable to premature cell death, ischemia, or inflammation. Such inflammatory diseases include glaucoma, heart disease,
and other certain inflammatory diseases such as Crohn’s disease, sepsis and diabetic retinopathy. We have performed
preclinical research of certain inflammatory diseases. Using small inhibitory RNA’s, or siRNA’s, against Factor 5A
to inhibit its expression, the results of our studies have indicated a reduction in pro-inflammatory cytokine formation and the
formation of receptors for LPS, interferon-gamma and TNF-alpha. Our studies have also indicated that by inhibiting Factor
5A, iNOS, MAPK, NFkB, JAK1 and ICAM are downregulated, which decreases the inflammatory cytokines formed through these pathways.
Additionally, a mouse study has indicated that our siRNA is comparable to a steroid and to a prescription anti-TNF drug in its
ability to reduce cytokine response to LPS. Other mouse studies have also indicated that the siRNA against Factor 5A
(i) protects thymocyte cells from apoptosis and decreases formation of MPO, TNF-a, MIP-1alpha, and IL-1 in the lungs of mice challenged
with LPS and (ii) increases the survival rate in which sepsis was induced by a lethal injection of LPS and (iii) reduces blood
serum levels of inflammatory proteins, such as IL-1, IL-2, IL-6, IL-12, TNF-a, IFNg and MIP-1alpha, while not effecting IL-10,
an anti-inflammatory cytokine. Other experiments utilizing siRNA to Factor 5A include inhibition of or apoptosis during
the processing of mouse pancreatic beta islet cells for transplantation, and the inhibition of early inflammatory changes associated
with type-1 diabetes in an in-vivo rat model.
Proteins required for cell death include p53,
interleukins, TNF-a and other cytokines and caspases. Expression of these cell death proteins is required for the execution
of apoptosis. Based on our studies, we believe that down-regulating Factor 5A by treatment with siRNA inhibits the expression
of p53, a major cell death transcription factor that in turn controls the formation of a suite of other cell death proteins. In
addition, we believe that the down-regulation of Factor 5A up-regulates Bcl-2, a suppressor of apoptosis.
Human Health Target Markets
We believe that our gene technology may have
broad applicability in the human health field, by either accelerating or inhibiting apoptosis. Accelerating apoptosis
may be useful in treating certain forms of cancer because the body’s immune system is not able to force cancerous cells to
undergo apoptosis. Inhibiting apoptosis may be useful in preventing or treating a wide range of inflammatory and ischemic
diseases attributed to premature apoptosis, including diabetes, diabetic retinopathy and lung inflammation, among others.
We are advancing our research in multiple myeloma
with the goal of initiating a Phase I clinical trial, and may select additional human health indications to bring into clinical
trials. We believe that the success of our future operations will likely depend on our ability to transform our research and development
activities into a commercially feasible technology.
Human Health Research Program
Our human health research program, which has
consisted of pre-clinical
in-vitro
and
in-vivo
experiments designed to assess the role and method of action of the
Factor 5A genes in human diseases, is being performed by approximately nine (9) third party researchers, at our direction, at Mayo
Clinic, our contract research organization (Cato Research) and the University of Waterloo. Additionally, we outsource
certain projects, such as our pivotal toxicity studies, to other third party research organizations.
Our research and development expenses incurred
on human health applications were approximately 79% of our total research and development expenses for the year ended June 30,
2010. Our research and development expenses incurred on human health applications were approximately 74% of our total
research and development expenses for the year ended June 30, 2009. Our research and development expenses incurred on
human health applications were approximately 56% of our total research and development expenses for the year ended June 30, 2008. Since
inception, the proportion of our research and development expenses on human health applications has increased, as compared to our
research and development expenses on agricultural applications. This change is primarily due to the fact that our research
focus on human health has increased and some of our research costs for plant applications have shifted to our license partners.
Our planned future research and development
initiatives for human health include:
|
·
|
Multiple Myeloma. Our objective is to advance our technology for the potential treatment of multiple myeloma with the goal of initiating a clinical trial. In connection with the potential clinical trial, we have engaged a clinical research organization, or CRO, to assist us through the process. We have also determined the delivery system for our technology, contracted for the supply of pharmaceutical grade materials to be used in toxicology and human studies, performed certain toxicology studies, and have contracted with a third party laboratory to conduct additional toxicology studies. Together with the assistance of our CRO, we will have additional toxicology studies performed with the goal of filing an investigational new drug application, or IND application, with the U.S. Food and Drug Administration, or FDA, for their review and consideration in order to initiate a clinical trial. We estimate that it will take approximately six (6) months from June 30, 2010 to complete these objectives.
|
|
·
|
Other. We may continue to look at other disease states in order to determine the role of Factor 5A.
|
In order to pursue the above research initiatives,
as well as other research initiatives that may arise, we completed a private placement of convertible preferred stock and warrants
on April 1, 2010 and June 2, 2010. However, it may be necessary for us to raise a significant amount of additional working
capital in the future. If we are unable to raise the necessary funds, we may be required to significantly curtail the
future development of some of our research initiatives and we will be unable to pursue other possible research initiatives.
We may further expand our research and development
program beyond the initiatives listed above to include other research centers.
Human Health Suppliers
The materials for our SNT-01T therapeutic for
multiple myeloma consists of three parts: Factor 5A plasmid, siRNA against Factor 5A, and a nano-particle. We have entered
into supply agreements for the components as follows:
On June 27, 2008, the Company entered into a supply agreement with
VGXI, Inc. (“VGXI”) under which VGXI will supply the Company with the plasmid portion of the Company’s combination
therapy consisting of the Factor 5A gene and siRNA against Factor 5A (the “Plasmid Product”). The
agreement has an initial term that commences on the date of the agreement and runs for a period of five (5) years. The
agreement shall, upon mutual agreement, renew for consecutive one (1) year periods thereafter. The Company’s financial
obligation under the agreement is dependent upon the amount of Plasmid Product ordered by the Company.
On June 30, 2008, the Company entered into a
supply agreement with POLYPLUS under which POLYPLUS will supply the Company with its “in vivo-jetPEI” (the “Product”),
which is used for systemic delivery of the Company’s combination therapy of siRNA against Factor 5A and a plasmid of the
Factor 5A gene. The agreement has an initial term which commences on the date of the agreement and runs until the eighth
anniversary of the first sale of the Product. The agreement shall automatically renew for consecutive one (1) year periods
thereafter, except if terminated by either party upon six (6) months written notice prior to the initial or any subsequent renewal
term. The Company’s financial obligation under the agreement is dependent upon the amount of Product ordered by
the Company.
On September 4, 2008, the Company entered into
a supply agreement with AVECIA under which AVECIA will supply the Company with the siRNA portion of the Company’s combination
therapy consisting of the Factor 5A gene and siRNA against Factor 5A (the “Plasmid Product”). The agreement
has a term which commences on the date of the agreement and terminates on the later of the completion of all services to be provided
under the agreement or 30 days following delivery of the final shipment of product.
Human Health Competition
Our competitors in human health that are presently
attempting to distribute their technology have generally utilized one of the following distribution channels:
|
·
|
Entering into strategic alliances, including licensing technology to major marketing and distribution partners; or
|
|
·
|
Developing in-house production and marketing capabilities.
|
In addition, some competitors are established
distribution companies, which alleviates the need for strategic alliances, while others are attempting to create their own distribution
and marketing channels.
There are many large companies and development
stage companies working in the field of apoptosis research including: Amgen Inc., Centocor, Inc., Genzyme Corporation, OSI Pharmaceuticals,
Inc., Novartis AG, Introgen Therapeutics, Inc., Genta, Incorporated, and Vertex Pharmaceuticals, Inc., amongst others.
We do not currently have any commercialized
products, and therefore, it is difficult to assess our competitive position in the market. However, we believe that
if we are able to develop and commercialize a product or products under our patents to our Factor 5A platform technology, we will
have a competitive position in the markets in which we will operate.
Agricultural Applications
Our agricultural research focuses on the discovery
and development of certain gene technologies, which are designed to confer positive traits on fruits, flowers, vegetables, forestry
species and agronomic crops. To date, we have isolated and characterized the senescence-induced Lipase gene, DHS, and
Factor 5A in certain species of plants. Our goal is to modulate the expression of these genes in order to achieve such traits as
extended shelf life, increased biomass, increased yield and increased resistance to environmental stresses and disease, thereby
demonstrating proof of concept in each category of crop.
Certain agricultural results to date include:
|
·
|
longer shelf life of perishable produce;
|
|
·
|
increased biomass and seed yield;
|
|
·
|
greater tolerance to environmental stresses, such as drought and soil salinity;
|
|
·
|
greater tolerance to certain fungal and bacterial pathogens;
|
|
·
|
more efficient use of fertilizer; and
|
|
·
|
advancement to field trials in banana, and trees.
|
The technology presently utilized by the industry
for increasing the shelf life in certain flowers, fruits and vegetables relies primarily on reducing ethylene biosynthesis, and
therefore only has application to the crops that are ethylene-sensitive. Because Factor 5A, DHS and Lipase are already
present in all plant cells, our technology may be incorporated into crops by using either conventional breeding methods (non-genetically
modified) or biotechnology techniques.
We have licensed this technology to various
strategic partners and have entered into a joint collaboration. We may continue to license this technology, as opportunities present
themselves, to additional strategic partners and/or enter into additional joint collaborations or ventures. Our commercial
partners have licensed our technology for use in turfgrass, canola, corn, soybean, cotton, banana, alfalfa, rice and certain species
of trees and bedding plants, and we have obtained proof of concept for enhanced post harvest shelf life, seed yield, biomass, and
resistance to disease in several of these plant species.
We have ongoing field trials of certain trees
and bananas with our respective partners. The initial field trials conducted with ArborGen over a five year period in
certain species of trees have concluded and the trees have been harvested for wood quality assessment. Preliminary data
from our joint field trials show significantly enhanced growth rates in some of the trees relative to controls. Selected
trees from the field trials were harvested and their wood chemistry and density was assessed. There were no differences
in key economic characteristics of wood, such as lignin, cellulose and specific gravity, between the trees with the enhanced growth
attributes and untreated control trees, which indicates that the faster growth does not result in lower wood quality. Additional
field trials for enhanced growth rates and other traits are currently being performed with ArborGen.
To date, banana field trials have indicated
that our technology extends the shelf life of banana fruit by 100%. In addition to the post harvest shelf life benefits,
an additional field trial generated encouraging disease tolerance data specific to Black Sigatoka (Black Leaf Streak Disease),
for banana plants. Additional field trials for banana plants are ongoing for the combined traits of disease resistance and shelf
life extension.
Commercialization by our partners may require
a combination of traits in a crop, such as both post harvest shelf life and disease resistance, or other traits. Our
near-term research and development initiatives include modulating the expression of DHS and Factor 5A genes in these plants and
then propagation and phenotype testing of such plants.
Our ongoing research and development initiatives
for agriculture include assisting our license and joint collaboration partners to:
|
·
|
further develop and implement the DHS and Factor 5A gene technology in banana, canola, cotton, turfgrass, bedding plants, rice, alfalfa, corn, soybean and trees; and
|
|
·
|
test the resultant crops for new beneficial traits such as increased yield, increased tolerance to environmental stress, disease resistance and more efficient use of fertilizer.
|
Agricultural Target Markets
In order to address the complexities associated
with marketing and distribution in the worldwide market, we have adopted a multi-faceted commercialization strategy, in which we
have entered into and plan to enter into, as the opportunities present themselves, additional licensing agreements or other strategic
relationships with a variety of companies or other entities on a crop-by-crop basis. We anticipate revenues from these
relationships in the form of licensing fees, royalties, usage fees, or the sharing of gross profits. In addition, we
anticipate payments from certain of our partners upon their achievement of certain research and development benchmarks. This
commercialization strategy allows us to generate revenue at various stages of product development, while ensuring that our technology
is incorporated into a wide variety of crops. Our optimal partners combine the technological expertise to incorporate
our technology into their product line along with the ability to successfully market the enhanced final product, thereby eliminating
the need for us to develop and maintain a sales force.
Because the agricultural market is dominated
by privately held companies or subsidiaries of foreign owned companies, market size and market share data for the crops under our
license and development agreements is not readily available. Additionally, because we have entered into confidentiality
agreements with our license and development partners, we are unable to report the specific financial terms of the agreements as
well as any market size and market share data that our partners may have disclosed to us regarding their companies.
Agricultural Development and License Agreements
Through June 30, 2010, we have entered into
eight (8) license agreements and one (1) joint collaboration with established agricultural biotechnology companies and an established
ethanol company.
On August 6, 2007, we entered into a license
agreement with Monsanto Company for the development and commercialization of corn and soy. Under the terms of the agreement,
we received an upfront payment, are entitled to royalty payments in the low single digits and potential milestone payments upon
achievement of certain development milestones. The agreement contains standard termination provisions, and the term
of the agreement runs until the expiration of the patents licensed under the agreement (2019 in the United States and 2025 outside
the United States).
On December 21, 2006, we entered into a license
agreement with Arborgen, LLC regarding the growth and development of trees (other than edible fruit and nut production). Under
the terms of the agreement, we received three fixed payments and are entitled to royalty payments in the mid single digits. The
agreement contains standard termination provisions, and the term of the agreement runs until the expiration of the patents licensed
under the agreement (2019 in the United States and 2025 outside the United States).
On March 8, 2004, we entered into a development
and license agreement with The Scotts Company for the development and commercialization of garden plants, potted plants and turf
grass (excluding forage grasses). Under the terms of the agreement, we are entitled to certain benchmark payments upon
various anniversaries of the date of execution as well as upon achievement of certain commercial milestones. We are
also entitled to royalty payments in the low to mid single digits. The agreement contains standard termination provisions,
and the term of the agreement runs until the expiration of the patents licenses under the agreement (2019 in the United States
and 2024 outside of the United States).
On July 17, 2007, we entered into a license
agreement with Bayer CropScience AG for the development and commercialization of rice. Under the terms of the agreement,
we are entitled to royalty payments of a dollar value per unit and potential milestone payments upon the achievement of certain
development milestones. The agreement contains standard termination provisions, and the term of the agreement runs until
the expiration of the patents licensed under the agreement (2019 in the United States and 2025 outside the United States).
On August 30, 2007, we entered into a license
agreement with Bayer CropScience AG for the development and commercialization of cotton. Under the terms of the agreement,
we are entitled to royalty payments in the low to mid single digits and potential milestone payments upon the achievement of certain
development milestones. The agreement contains standard termination provisions, and the term of the agreement runs until
the expiration of the patents licensed under the agreement (2019 in the United States and 2025 outside the United States).
On November 8, 2006, we entered into a license
agreement with Bayer CropScience GmbH for the development and commercialization of Brassica. Under the terms of the
agreement, we are entitled to receive potential milestone payments upon the achievement of certain development and commercialization
milestones and a share of Bayer’s income related to our license. The agreement contains standard termination provisions,
and the term of the agreement runs until the expiration of the patents licensed under the agreement (2019 in the United States
and 2024 outside the United States).
On October 14, 2004, we entered into a development
and license agreement with Broin and Associates, Inc. for the development and commercialization of certain inputs in connection
with the manufacturing process for ethanol. Under the terms of the agreement, we are entitled to payments based on the
usage of our intellectual property at Broin’s facilities. The agreement contains standard termination provisions,
and the term of the agreement runs until the expiration of the patents licensed under the agreement (2019 in the United States
and 2021 outside the United States).
On September 14, 2002, we entered into a development
and license agreement with Cal/West Seeds for the development and commercialization of alfalfa, medicago species. Under
the terms of the agreement, we are entitled to potential milestone payments upon the achievement of certain development and commercialization
milestones and a dollar amount of royalties based upon production. The agreement contains standard termination provisions,
and the term of the agreement runs until the expiration of the patents licensed under the agreement (2019 in the United States
and 2021 outside the United States).
On May 14, 1999, we entered into an agreement with Rahan Meristem,
an Israeli partnership that is engaged in the worldwide marketing of tissue culture plants. The purpose of the agreement
is to develop enhanced banana plants which will result in banana fruit with improved consumer and grower-driven traits. The
program has been performed as a joint collaboration whereby we pay for 50% of the research costs of the program and upon successful
commercialization of banana fruit, we will receive 50% of the profits, as defined by the agreement.
Agricultural Research Program
Our agricultural research and development is
performed by four (4) researchers, at our direction, at the University of Waterloo, where the technology was developed. Additional
agricultural research and development is performed by our license or joint collaboration partners.
The discoverer of our technology, John E. Thompson,
Ph.D., is the Associate Vice President, Research and former Dean of Science at the University of Waterloo in Ontario, Canada, and
is our Executive Vice President and Chief Scientific Officer. Dr. Thompson is also one of our directors and owns 1.8%
of the outstanding shares of our common stock, $0.01 par value, as of June 30, 2010.
On September 1, 1998, we entered into, and have
extended through November 30, 2010, a research and development agreement with the University of Waterloo and Dr. Thompson as the
principal inventor. The Research and Development Agreement provides that the University of Waterloo will perform research
and development under our direction, and we will pay for the cost of this work and make certain payments to the University of Waterloo. In
return for payments made under the Research and Development Agreements, we have all rights to the intellectual property derived
from the research.
Agricultural Competition
Our competitors in both human health and agriculture
that are presently attempting to distribute their technology have generally utilized one of the following distribution channels:
|
·
|
licensing technology to major marketing and distribution partners;
|
|
·
|
entering into strategic alliances; or
|
|
·
|
developing in-house production and marketing capabilities.
|
In addition, some competitors are established
distribution companies, which alleviates the need for strategic alliances, while others are attempting to create their own distribution
and marketing channels.
Our competitors in the field of delaying plant
senescence are companies that develop and produce transformed plants with a variety of enhanced traits. Such companies
include: Mendel Biotechnology; Renessen LLC; Exelixis Plant Sciences, Inc.; and Syngenta International AG; among others.
We do not currently have any commercialized
products, and therefore, it is difficult to assess our competitive position in the market. However, we believe that
if we or our licensee’s are able to develop and commercialize a product or products using our technology, we will have a
competitive position in the markets in which we or our licensee’s operate.
Agricultural Development Program
Generally, projects with our licensees and joint
venture partner begin by transforming seed or germplasm to incorporate our technology. Those seeds or germplasm are
then grown in our partners’ greenhouses. After successful greenhouse trials, our partners will transfer the plants
to the field for field trials. After completion of successful field trials, our partners may have to apply for and receive
regulatory approval prior to initiation of any commercialization activities.
Generally, the approximate time to complete
each sequential development step is as follows:
Seed Transformation
|
|
approximately 1 to 2 years
|
Greenhouse
|
|
approximately 1 to 2 years
|
Field Trials
|
|
approximately 2 to 5 years
|
The actual amount of time spent on each development
phase depends on the crop, its growth cycle and the success of the transformation achieving the desired results. As
such, the amount of time for each phase of development could vary, or the time frames may change.
The development of our technology with Poet
is different than our other licenses in that we are modifying certain production inputs for ethanol. That process involves
modifying the inputs, testing such inputs in Poet’s production process and if successful, implementing such inputs in Poet’s
production process on a plant by plant basis.
The status of each of our projects with our
partners is as follows:
Project
|
|
Partner
|
|
Status
|
Banana
|
|
Rahan Meristem
|
|
|
- Shelf Life
|
|
|
|
Field trials
|
- Disease Resistance
|
|
|
|
Field trials
|
Trees
|
|
Arborgen
|
|
|
- Growth
|
|
|
|
Field trials
|
Alfalfa
|
|
Cal/West
|
|
Greenhouse
|
Corn
|
|
Monsanto
|
|
Proof of concept ongoing
|
Cotton
|
|
Bayer
|
|
Seed transformation
|
Canola
|
|
Bayer
|
|
Seed transformation
|
Rice
|
|
Bayer
|
|
Proof of concept ongoing
|
Soybean
|
|
Monsanto
|
|
Proof of concept ongoing
|
Turfgrass
|
|
The Scotts Company
|
|
Greenhouse
|
Ethanol
|
|
Poet
|
|
Modify inputs
|
Commercialization by our partners may require
a combination of traits in a crop, such as both shelf life and disease resistance, or other traits.
Based upon our commercialization strategy, we
anticipate that there may be a significant period of time before plants enhanced using our technology reach consumers. Thus,
we have not begun to actively market our technology directly to consumers, but rather, we have sought to establish ourselves within
the industry through presentations at industry conferences, our website and direct communication with prospective licensees.
Consistent with our commercialization strategy,
we intend to attract other companies interested in strategic partnerships or licensing our technology, which may result in additional
license fees, revenues from contract research, royalty fees and other related revenues. Successful future operations
will depend on our ability to transform our research and development activities into a commercially feasible technology.
Intellectual Property
We have twenty-one (21) issued patents from
the United States Patent and Trademark Office, or PTO, and fifty-seven (57) issued patents from foreign countries, fifty-three
(53) of which are for the use of our technology in agricultural applications and twenty-five (25) of which relate to human health
applications.
In addition to our seventy-eight (78) patents,
we have a wide variety of patent applications, including divisional applications and continuations-in-part, in process with the
PTO and internationally. We intend to continue our strategy of enhancing these new patent applications through the addition
of data as it is collected.
Our agricultural patents are generally set to
expire in 2019 in the United States and 2025 outside the United States. Our core human health technology patents are
set to expire in 2021 in the United States and 2025 outside the United States, and our patents related to multiple myeloma are
set to expire, both in and outside the United States in 2026. To the extent our patents have different expiration dates
abroad than in the United States, we are currently developing a strategy to extend the United States expiration dates to the foreign
expiration dates.
Government Regulation
At present, the U.S. federal government regulation
of biotechnology is divided among three agencies: (i) the U.S. Department of Agriculture regulates the import, field-testing and
interstate movement of specific types of genetic engineering that may be used in the creation of transformed plants; (ii) the Environmental
Protection Agency regulates activity related to the invention of plant pesticides and herbicides, which may include certain kinds
of transformed plants; and (iii) the FDA regulates foods derived from new plant varieties. The FDA requires that transformed
plants meet the same standards for safety that are required for all other plants and foods in general. Except in the
case of additives that significantly alter a food’s structure, the FDA does not require any additional standards or specific
approval for genetically engineered foods but expects transformed plant developers to consult the FDA before introducing a new
food into the market place.
In addition, our ongoing preclinical research
with cell lines and lab animal models of human disease is not currently subject to the FDA requirements that govern clinical trials. However,
use of our technology, if developed for human health applications, will also be subject to FDA regulation. Generally,
the FDA must approve any drug or biologic product before it can be marketed in the United States. In addition, prior
to being sold outside of the U.S., any products resulting from the application of our human health technology must be approved
by the regulatory agencies of foreign governments. Prior to filing a new drug application or biologics license application
with the FDA, we would have to perform extensive clinical trials, and prior to beginning any clinical trial, we need to perform
extensive preclinical testing which could take several years and may require substantial expenditures.
We believe that our current activities, which
to date have been confined to research and development efforts, do not require licensing or approval by any government regulatory
agency. However, we are planning on performing clinical trials, which would be subject to FDA approval. Additionally,
federal, state and foreign regulations relating to crop protection products and human health applications developed through biotechnology
are subject to public concerns and political circumstances, and, as a result, regulations have changed and may change substantially
in the future. Accordingly, we may become subject to governmental regulations or approvals or become subject to licensing
requirements in connection with our research and development efforts. We may also be required to obtain such licensing or approval
from the governmental regulatory agencies described above, or from state agencies, prior to the commercialization of our genetically
transformed plants and human health technology. In addition, our marketing partners who utilize our technology or sell
products grown with our technology may be subject to government regulations. If unfavorable governmental regulations
are imposed on our technology or if we fail to obtain licenses or approvals in a timely manner, we may not be able to continue
our operations.
Liquidity and Capital Resources
Overview
As of June 30, 2010, our cash balance totaled
$8,026,296
,
and we had working capital of $6,001,970. As of June 30, 2010, we had a federal tax loss carryforward
of approximately $41,466,000 and a state tax loss carry-forward of approximately $34,101,000 to offset future taxable income. We
cannot assure you that we will be able to take advantage of any or all of such tax loss carryforwards, if at all, in future fiscal
years.
Contractual Obligations
The following table lists our cash contractual
obligations as of June 30, 2010:
|
|
Payments Due by Period
|
|
Contractual Obligations
|
|
Total
|
|
|
Less than
1 year
|
|
|
1 - 3 years
|
|
|
3 - 5 years
|
|
|
More than
5 years
|
|
Research and Development Agreements
(1)
|
|
$
|
911,401
|
|
|
$
|
911,401
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Facility, Rent and Operating Leases
(2)
|
|
$
|
73,568
|
|
|
$
|
73,568
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employment, Consulting and Scientific Advisory Board Agreements
(3)
|
|
$
|
224,542
|
|
|
$
|
217,042
|
|
|
$
|
7,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Contractual Cash Obligations
|
|
$
|
1,209,511
|
|
|
$
|
1,202,011
|
|
|
$
|
7,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
Certain of our research and development agreements disclosed
herein provide that payment is to be made in Canadian dollars and, therefore, the contractual obligations are subject to fluctuations
in the exchange rate.
|
|
(2)
|
The lease for our office space in New Brunswick, New
Jersey is subject to certain escalations for our proportionate share of increases in the building’s operating costs.
|
|
(3)
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Certain of our consulting agreements provide for automatic
renewal, which is not reflected in the table, unless terminated earlier by the parties to the respective agreements.
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We expect our capital requirements to increase
significantly over the next several years as we commence new research and development efforts, increase our business and administrative
infrastructure and embark on developing in-house business capabilities and facilities. Our future liquidity and capital funding
requirements will depend on numerous factors, including, but not limited to, the levels and costs of our research and development
initiatives and the cost and timing of the expansion of our business development and administrative staff.
Effective September 1, 2010, we extended our
research and development agreement with the University of Waterloo for an additional three-month period through November 30, 2010,
in the amount of CAD $164,200 or approximately USD $164,200, which is not included in the above table of contractual obligations.
Research and development expenses under this agreement aggregated $672,693 for the year ended June 30, 2010, USD $653,104 for the
year ended June 30, 2009, USD $730,960 for the year ended June 30, 2008 and USD $5,953,061 for the cumulative period from inception
through June 30, 2010. Total research and development expenses aggregated $2,637,407 for the year ended June 30, 2010, $2,353,962
for the year ended June 30, 2009, $1,767,741 for the year ended June 30, 2008 and $14,948,964 for the cumulative period from inception
through June 30, 2010.
Capital Resources
Since inception, we have generated revenues
of $1,590,000 in connection with the initial fees and milestone payments received under our license and development agreements. We
have not been profitable since inception, we will continue to incur additional operating losses in the future, and we will require
additional financing to continue the development and subsequent commercialization of our technology. While we do not
expect to generate significant revenues from the licensing of our technology for several years, we may enter into additional licensing
or other agreements with marketing and distribution partners that may result in additional license fees, receive revenues from
contract research, or other related revenue.
License Agreements
On July 17, 2007 we entered into a license agreement
with Bayer CropScience AG for the development and commercialization of cotton. Under the terms of the license agreement,
we received an upfront payment, will receive milestone payments upon the achievement of certain development milestones, and additionally,
upon commercialization, a royalty on net sales.
On
August 6, 2007 we entered into a license agreement with Monsanto for the development and commercialization of corn and soy. Under
the terms of the license agreement, we received an upfront payment, will receive milestone payments upon the achievement of certain
development milestones, and additionally, upon commercialization, a royalty on net sales.
On September 11, 2007 we entered into a license
agreement with Bayer CropScience AG for the development and commercialization of rice. Under the terms of the agreement,
we received an upfront payment, will receive milestone payments upon the achievement of certain development milestones, and additionally,
upon commercialization, a royalty on net sales.
Financing
On April 1, 2010, we entered into securities
purchase agreements with non-affiliated and affiliated investors for the issuance of 10% convertible preferred stock and warrants
and received aggregate gross proceeds of $11,497,000.
On July 9, 2009, we entered into securities
purchase agreements with Partlet Holdings Ltd., for the issuance of common stock and warrants and received gross proceeds of $1,000,000.
On July 29, 2009, we entered into securities
purchase agreements with each of Robert Forbes, Timothy Forbes and certain insiders and affiliates for the issuance of common stock
and warrants and received gross proceeds of $530,000.
On July 29, 2009, we entered into a securities
purchase agreement with Cato Holding Company for the issuance of common stock and warrants in exchange for amounts owed by us to
Cato Research Ltd. in the amount of $175,000.
We anticipate that, based upon our current cash
balance, we will be able to fund our operations for at least the next twelve (12) months from June 30, 2010. Over the
next twelve months from June 30, 2010, we plan to fund our research and development and commercialization activities by:
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utilizing our current cash balance and investments,
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achieving some of the milestones set forth in our current licensing agreements,
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through the execution of additional licensing agreements for our technology, and
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through the placement of equity or debt instruments.
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We cannot assure you that we will be able to
raise money through any of the foregoing transactions, or on favorable terms, if at all.
EMPLOYEES
As of October 25, 2010, we had 4 total employees,
all of whom were full-time employees.
CORPORATE INFORMATION
We were incorporated in Delaware in 1999. Our
principal business address is 303 George Street, Suite 420, New Brunswick, New Jersey, 08901, and our telephone number is (732)
296-8400. We maintain a website at “http://www.senesco.com” (this is not a hyperlink; you must visit this website through
an Internet browser). Our website and the information contained therein or connected thereto are not incorporated into this prospectus.
AVAILABLE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange Commission, or the Commission. You may read and copy any
document we file with the Commission at the Commission’s public reference rooms at 100 F Street, N.E., Washington, D.C. 20549.
Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. Our Commission filings are also
available to the public from the Commission’s Website at “http://www.sec.gov.” We make available free of charge
our annual, quarterly and current reports, proxy statements and other information upon request. To request such materials, please
send an e-mail to jbrooks@senesco.com or contact Joel Brooks, our Chief Financial Officer, at 303 George Street, Suite 420, New
Brunswick, New Jersey, 08901 or at (732) 296-8400.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus,
any prospectus supplement and in the documents incorporated by reference herein constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical
fact may be deemed to be forward-looking statements. Forward-looking statements frequently, but not always, use the words “may”,
“intends”, “plans”, “believes”, “anticipates” or “expects” or similar
words and may include statements concerning our strategies, goals and plans. All forward-looking statements are management’s
present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to
differ materially from those described in the forward-looking statements. In particular, our statements regarding the
anticipated growth in the markets for our technologies, the continued advancement of our research, the approval of our patent applications,
the possibility of governmental approval in order to sell or offer for sale to the general public a genetically engineered plant
or plant product, the successful implementation of our commercialization strategy, including the success of our agricultural partners
and the successful implementation of the Rahan Joint Collaboration, statements relating to our patent applications, the anticipated
long term growth of our business, the results of our preclinical studies, if any, our ability to comply with the continued listing
standards of the NYSE Amex, and the timing of the projects and trends in future operating performance are examples of such forward-looking
statements. The forward-looking statements include risks and uncertainties, including, but not limited to, our limited
operating history, our need for additional capital to fund our operations until we are able to generate a profit, the
current economic environment, our dependence on a single principal technology, our outsourcing of our research and development
activities, our significant future capital needs, our dependence on our patents and proprietary rights and the enforcement of these
rights, the potential for our competitors or third parties to allege that we are infringing upon their intellectual property rights,
the potential that our security measures may not adequately protect our unpatented technology, potential difficulty in managing
our growth and expanding our operations, our lack of marketing or sales history and dependence on third-party marketing partners,
our potential future dependence on joint ventures and strategic alliances to develop and market our technology, the intense competition
in the human health and agricultural biotechnology industries, the various government regulations that our business is subject
to, the potential that our preclinical studies and clinical trials of our human health applications may be unsuccessful, any inability
to license from third parties their proprietary technologies or processes which we use in connection with the development of our
technology, the length, expense and uncertainty associated with clinical trials for our human health technology, the
potential that, even if we receive regulatory approval, consumers may not accept products containing our technology, our dependence
on key personnel, the potential that certain provisions of our charter, by-laws and Delaware law could make a takeover difficult,
increasing political and social turmoil, the potential that our management and other affiliates, due to their significant control
of our common stock have the ability to significantly influence our actions, the potential that a significant portion of our total
outstanding shares of common stock may be sold in the market in the near future, the limited trading market of our common stock,
the potential that our common stock may be delisted from the NYSE Amex Exchange, fluctuations in the market price of our common
stock, our dividend policy and potential for our stockholders to be diluted.
The following documents, among others, describe
these assumptions, risks, uncertainties, and other factors. You should read and interpret any forward-looking statements together
with these documents:
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the risk factors contained in any prospectus supplement under the caption “Risk Factors”;
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our most recent annual report on Form 10-K, including the sections entitled “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
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our quarterly reports on Form 10-Q; and
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our other SEC filings.
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In light of these assumptions, risks and uncertainties,
the results and events discussed in the forward-looking statements contained in this prospectus, any prospectus supplement or in
any document incorporated by reference in this prospectus might not occur. Investors are cautioned not to place undue reliance
on the forward-looking statements, which speak only of the date of this prospectus, the date of any prospectus supplement or the
date of the document incorporated by reference in this prospectus. We are not under any obligation, and we expressly disclaim any
obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required by applicable law. All subsequent forward-looking statements attributable to us are expressly qualified
in their entirety by the cautionary statements contained or referred to in this section.
RISK FACTORS
This Registration Statement contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in this Registration
Statement. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below,
elsewhere in this Registration Statement, and in any documents incorporated in this Registration Statement by reference.
Risks Related to Our Business
We have a limited operating history and
have incurred substantial losses and expect to incur future losses
.
We are a development stage biotechnology company
with a limited operating history and limited assets and capital. We have incurred losses each year since inception and had an accumulated
deficit of $50,841,159 at June 30, 2010. We have generated minimal revenues by licensing our technology for certain crops to companies
willing to share in our development costs. In addition, our technology may not be ready for commercialization for several years.
We expect to continue to incur losses for the next several years because we anticipate that our expenditures on research and development
and administrative activities will significantly exceed our revenues during that period. We cannot predict when, if ever, we will
become profitable.
We may need additional capital to fund
our operations until we are able to generate a profit.
Our operations to date have required significant
cash expenditures. Our future capital requirements will depend on the results of our research and development activities,
preclinical and clinical studies, and competitive and technological advances.
We will need to obtain more funding in the future
through collaborations or other arrangements with research institutions and corporate partners, or public and private offerings
of our securities, including debt or equity financing. We may not be able to obtain adequate funds for our operations
from these sources when needed or on acceptable terms. Future collaborations or similar arrangements may require us to license
valuable intellectual property to, or to share substantial economic benefits with, our collaborators. If we raise additional
capital by issuing additional equity or securities convertible into equity, our stockholders may experience dilution and our share
price may decline. Any debt financing may result in restrictions on our spending.
If we are unable to raise additional funds,
we will need to do one or more of the following:
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delay, scale-back or eliminate some or all of our research and product development programs;
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provide licenses to third parties to develop and commercialize products or technologies that we would otherwise seek to develop and commercialize ourselves;
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seek strategic alliances or business combinations;
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attempt to sell our company;
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cease operations; or
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declare bankruptcy.
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We believe that at the projected rate of spending
we should have sufficient cash to maintain our present operations for at least the next twelve (12) months.
We may be adversely affected by the current
economic environment.
Our ability to obtain financing, invest in and
grow our business, and meet our financial obligations depends on our operating and financial performance, which in turn is subject
to numerous factors. In addition to factors specific to our business, prevailing economic conditions and financial,
business and other factors beyond our control can also affect our business and ability to raise capital. We cannot anticipate
all of the ways in which the current economic climate and financial market conditions could adversely impact our business.
We depend on a single principal technology
and, if our technology is not commercially successful, we will have no alternative source of revenue
.
Our primary business is the development and
licensing of technology to identify, isolate, characterize and promote or silence genes which control the death of cells in humans
and plants. Our future revenue and profitability critically depend upon our ability, or our licensees’ ability, to successfully
develop apoptosis and senescence gene technology and later license or market such technology. We have conducted experiments
on certain crops with favorable results and have conducted certain preliminary cell-line and animal experiments, which have provided
us with data upon which we have designed additional research programs. However, we cannot give any assurance that our technology
will be commercially successful or economically viable for any crops or human health applications.
In addition, no assurance can be given that
adverse consequences might not result from the use of our technology such as the development of negative effects on humans or plants
or reduced benefits in terms of crop yield or protection. Our failure to obtain market acceptance of our technology
or of our current or potential licensees to successfully commercialize such technology would have a material adverse effect on
our business.
We outsource all of our research and
development activities and, if we are unsuccessful in maintaining our alliances with these third parties, our research and development
efforts may be delayed or curtailed.
We rely on third parties to perform all of our
research and development activities. Our research and development efforts take place at the University of Waterloo in
Ontario, Canada, where our technology was discovered, at the Mayo Clinic, at other commercial research facilities and with our
commercial partners. At this time, we do not have the internal capabilities to perform our own research and development
activities. Accordingly, the failure of third-party research partners to perform under agreements entered into with us, or our
failure to renew important research agreements with these third parties, may delay or curtail our research and development efforts.
We have significant future capital needs
and may be unable to raise capital when needed, which could force us to delay or reduce our research and development efforts.
As of June 30, 2010, we had cash of $8,026,296
and working capital of $6,001,970. Using our available reserves as of June 30, 2010, we believe that we can operate
according to our current business plan for at least the next twelve (12) months. To date, we have generated minimal
revenues and anticipate that our operating costs will exceed any revenues generated over the next several years. Therefore,
we will be required to raise additional capital in the future in order to operate in accordance with our current business plan,
and this funding may not be available on favorable terms, if at all. If we are unable to raise additional funds, we
will need to do one or more of the following:
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delay, scale back or eliminate some or all of our research and development programs;
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provide a license to third parties to develop and commercialize our technology that we would otherwise seek to develop and commercialize ourselves;
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seek strategic alliances or business combinations;
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attempt to sell our company;
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cease operations; or
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declare bankruptcy.
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In addition, in connection with any funding,
if we need to issue more equity securities than our certificate of incorporation currently authorizes, or more than 20% of the
shares of our common stock outstanding, we may need stockholder approval. If stockholder approval is not obtained or
if adequate funds are not available, we may be required to curtail operations significantly or to obtain funds through arrangements
with collaborative partners or others that may require us to relinquish rights to certain of our technologies, product candidates,
products or potential markets. Investors may experience dilution in their investment from future offerings of our common
stock. For example, if we raise additional capital by issuing equity securities, such an issuance would reduce the percentage
ownership of existing stockholders. In addition, assuming the exercise of all options and warrants outstanding and the
conversion of the preferred stock into common stock, as of June 30, 2010, we had 64,783,361 shares of common stock authorized but
unissued and unreserved, which may be issued from time to time by our board of directors without stockholder approval. Furthermore,
we may need to issue securities that have rights, preferences and privileges senior to our common stock. Failure to
obtain financing on acceptable terms would have a material adverse effect on our liquidity.
Since our inception, we have financed all of
our operations through private equity and debt financings. Our future capital requirements depend on numerous factors, including:
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the scope of our research and development;
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our ability to attract business partners willing to share in our development costs;
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our ability to successfully commercialize our technology;
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competing technological and market developments;
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our ability to enter into collaborative arrangements for the development, regulatory approval and commercialization of other products; and
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the cost of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights.
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Our business depends upon our patents
and proprietary rights and the enforcement of these rights. Our failure to obtain and maintain patent protection may
increase competition and reduce demand for our technology.
As a result of the substantial length of time
and expense associated with developing products and bringing them to the marketplace in the biotechnology and agricultural industries,
obtaining and maintaining patent and trade secret protection for technologies, products and processes is of vital importance. Our
success will depend in part on several factors, including, without limitation:
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our ability to obtain patent protection for our technologies and processes;
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our ability to preserve our trade secrets; and
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our ability to operate without infringing the proprietary rights of other parties both in the United States and in foreign countries.
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As of June 30, 2010, we have been issued twenty
one (21) patents by the PTO and fifty-seven (57) patents from foreign countries. We have also filed numerous patent
applications for our technology in the United States and in several foreign countries, which technology is vital to our primary
business, as well as several continuations in part on these patent applications. Our success depends in part upon the
grant of patents from our pending patent applications.
Although we believe that our technology is unique
and that it will not violate or infringe upon the proprietary rights of any third party, we cannot assure you that these claims
will not be made or if made, could be successfully defended against. If we do not obtain and maintain patent protection,
we may face increased competition in the United States and internationally, which would have a material adverse effect on our business.
Since patent applications in the United States
are maintained in secrecy until patents are issued, and since publication of discoveries in the scientific and patent literature
tend to lag behind actual discoveries by several months, we cannot be certain that we were the first creator of the inventions
covered by our pending patent applications or that we were the first to file patent applications for these inventions.
In addition, among other things, we cannot assure
you that:
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our patent applications will result in the issuance of patents;
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any patents issued or licensed to us will be free from challenge and if challenged, would be held to be valid;
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any patents issued or licensed to us will provide commercially significant protection for our technology, products and processes;
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other companies will not independently develop substantially equivalent proprietary information which is not covered by our patent rights;
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other companies will not obtain access to our know-how;
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other companies will not be granted patents that may prevent the commercialization of our technology; or
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we will not incur licensing fees and the payment of significant other fees or royalties to third parties for the use of their intellectual property in order to enable us to conduct our business.
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Our competitors may allege that we are
infringing upon their intellectual property rights, forcing us to incur substantial costs and expenses in resulting litigation,
the outcome of which would be uncertain.
Patent law is still evolving relative to the
scope and enforceability of claims in the fields in which we operate. We are like most biotechnology companies in that
our patent protection is highly uncertain and involves complex legal and technical questions for which legal principles are not
yet firmly established. In addition, if issued, our patents may not contain claims sufficiently broad to protect us
against third parties with similar technologies or products, or provide us with any competitive advantage.
The PTO and the courts have not established
a consistent policy regarding the breadth of claims allowed in biotechnology patents. The allowance of broader claims
may increase the incidence and cost of patent interference proceedings and the risk of infringement litigation. On the
other hand, the allowance of narrower claims may limit the scope and value of our proprietary rights.
The laws of some foreign countries do not protect
proprietary rights to the same extent as the laws of the United States, and many companies have encountered significant problems
and costs in protecting their proprietary rights in these foreign countries.
We could become involved in infringement actions
to enforce and/or protect our patents. Regardless of the outcome, patent litigation is expensive and time consuming
and would distract our management from other activities. Some of our competitors may be able to sustain the costs of
complex patent litigation more effectively than we could because they have substantially greater resources. Uncertainties
resulting from the initiation and continuation of any patent litigation could limit our ability to continue our operations.
If our technology infringes the intellectual
property of our competitors or other third parties, we may be required to pay license fees or damages.
If any relevant claims of third-party patents
that are adverse to us are upheld as valid and enforceable, we could be prevented from commercializing our technology or could
be required to obtain licenses from the owners of such patents. We cannot assure you that such licenses would be available
or, if available, would be on acceptable terms. Some licenses may be non-exclusive and, therefore, our competitors may
have access to the same technology licensed to us. In addition, if any parties successfully claim that the creation
or use of our technology infringes upon their intellectual property rights, we may be forced to pay damages, including treble damages.
Our security measures may not adequately
protect our unpatented technology and, if we are unable to protect the confidentiality of our proprietary information and know-how,
the value of our technology may be adversely affected.
Our success depends upon know-how, unpatentable
trade secrets, and the skills, knowledge and experience of our scientific and technical personnel. As a result, all
employees agreed to a confidentiality provision in their employment agreement that prohibited the disclosure of confidential information
to anyone outside of our company, during the term of employment and for 5 years thereafter. We also require all employees
to disclose and assign to us the rights to their ideas, developments, discoveries and inventions. We also attempt to
enter into similar agreements with our consultants, advisors and research collaborators. We cannot assure you that adequate
protection for our trade secrets, know-how or other proprietary information against unauthorized use or disclosure will be available.
We occasionally provide information to research
collaborators in academic institutions and request that the collaborators conduct certain tests. We cannot assure you
that the academic institutions will not assert intellectual property rights in the results of the tests conducted by the research
collaborators, or that the academic institutions will grant licenses under such intellectual property rights to us on acceptable
terms, if at all. If the assertion of intellectual property rights by an academic institution is substantiated, and
the academic institution does not grant intellectual property rights to us, these events could limit our ability to commercialize
our technology.
As we evolve from a company primarily
involved in the research and development of our technology into one that is also involved in the commercialization of our technology,
we may have difficulty managing our growth and expanding our operations.
As our business grows, we may need to add employees
and enhance our management, systems and procedures. We may need to successfully integrate our internal operations with
the operations of our marketing partners, manufacturers, distributors and suppliers to produce and market commercially viable products. We
may also need to manage additional relationships with various collaborative partners, suppliers and other organizations. Although
we do not presently conduct research and development activities in-house, we may undertake those activities in the future. Expanding
our business may place a significant burden on our management and operations. We may not be able to implement improvements
to our management information and control systems in an efficient and timely manner and we may discover deficiencies in our existing
systems and controls. Our failure to effectively respond to such changes may make it difficult for us to manage our
growth and expand our operations.
We have no marketing or sales history
and depend on third-party marketing partners. Any failure of these parties to perform would delay or limit our commercialization
efforts.
We have no history of marketing, distributing
or selling biotechnology products and we are relying on our ability to successfully establish marketing partners or other arrangements
with third parties to market, distribute and sell a commercially viable product both here and abroad. Our business plan
envisions creating strategic alliances to access needed commercialization and marketing expertise. We may not be able
to attract qualified sub-licensees, distributors or marketing partners, and even if qualified, these marketing partners may not
be able to successfully market agricultural products or human health applications developed with our technology. If
our current or potential future marketing partners fail to provide adequate levels of sales, our commercialization efforts will
be delayed or limited and we may not be able to generate revenue.
We will depend on joint ventures and
strategic alliances to develop and market our technology and, if these arrangements are not successful, our technology may not
be developed and the expenses to commercialize our technology will increase.
In its current state of development, our technology
is not ready to be marketed to consumers. We intend to follow a multi-faceted commercialization strategy that involves
the licensing of our technology to business partners for the purpose of further technological development, marketing and distribution. We
have and are seeking business partners who will share the burden of our development costs while our technology is still being developed,
and who will pay us royalties when they market and distribute products incorporating our technology upon commercialization. The
establishment of joint ventures and strategic alliances may create future competitors, especially in certain regions abroad where
we do not pursue patent protection. If we fail to establish beneficial business partners and strategic alliances, our
growth will suffer and the continued development of our technology may be harmed.
Competition in the human health and agricultural
biotechnology industries is intense and technology is changing rapidly. If our competitors market their technology faster
than we do, we may not be able to generate revenues from the commercialization of our technology.
Many human health and agricultural biotechnology
companies are engaged in research and development activities relating to apoptosis and senescence. The market for plant
protection and yield enhancement products is intensely competitive, rapidly changing and undergoing consolidation. We
may be unable to compete successfully against our current and future competitors, which may result in price reductions, reduced
margins and the inability to achieve market acceptance for products containing our technology. Our competitors in the
field of plant senescence gene technology are companies that develop and produce transgenic plants and include major international
agricultural companies, specialized biotechnology companies, research and academic institutions and, potentially, our joint venture
and strategic alliance partners. These companies include: Mendel Biotechnology, Inc., Renessen LLC, Exelixis Plant Sciences,
Inc., and Syngenta International AG, among others. Some of our competitors that are involved in apoptosis research include: Amgen
Inc.; Centocor, Inc.; Genzyme Corporation; OSI Pharmaceuticals, Inc.; Novartis AG; Introgen Therapeutics, Inc.; Genta, Inc.; and
Vertex Pharmaceuticals, Inc. Many of these competitors have substantially greater financial, marketing, sales, distribution
and technical resources than us and have more experience in research and development, clinical trials, regulatory matters, manufacturing
and marketing. We anticipate increased competition in the future as new companies enter the market and new technologies
become available. Our technology may be rendered obsolete or uneconomical by technological advances or entirely different
approaches developed by one or more of our competitors, which will prevent or limit our ability to generate revenues from the commercialization
of our technology.
Our business is subject to various government
regulations and, if we or our licensees are unable to obtain regulatory approval, we may not be able to continue our operations.
At present, the U.S. federal government regulation
of biotechnology is divided among three agencies:
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the USDA regulates the import, field testing and interstate movement of specific types of genetic engineering that may be used in the creation of transgenic plants;
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the EPA regulates activity related to the invention of plant pesticides and herbicides, which may include certain kinds of transgenic plants; and
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the FDA regulates foods derived from new plant varieties.
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The FDA requires that transgenic plants meet
the same standards for safety that are required for all other plants and foods in general. Except in the case of additives
that significantly alter a food’s structure, the FDA does not require any additional standards or specific approval for genetically
engineered foods, but expects transgenic plant developers to consult the FDA before introducing a new food into the marketplace.
Use of our technology, if developed for human
health applications, will also be subject to FDA regulation. The FDA must approve any drug or biologic product before
it can be marketed in the United States. In addition, prior to being sold outside of the U.S., any products resulting
from the application of our human health technology must be approved by the regulatory agencies of foreign governments. Prior
to filing a new drug application or biologics license application with the FDA, we would have to perform extensive clinical trials,
and prior to beginning any clinical trial, we would need to perform extensive preclinical testing which could take several years
and may require substantial expenditures.
We believe that our current activities, which
to date have been confined to research and development efforts, do not require licensing or approval by any governmental regulatory
agency. However, we are planning on performing clinical trials, which would be subject to FDA approval. Additionally,
federal, state and foreign regulations relating to crop protection products and human health applications developed through biotechnology
are subject to public concerns and political circumstances, and, as a result, regulations have changed and may change substantially
in the future. Accordingly, we may become subject to governmental regulations or approvals or become subject to licensing
requirements in connection with our research and development efforts. We may also be required to obtain such licensing or approval
from the governmental regulatory agencies described above, or from state agencies, prior to the commercialization of our genetically
transformed plants and human health technology. In addition, our marketing partners who utilize our technology or sell
products grown with our technology may be subject to government regulations. If unfavorable governmental regulations
are imposed on our technology or if we fail to obtain licenses or approvals in a timely manner, we may not be able to continue
our operations.
Preclinical studies of our human health
applications may be unsuccessful, which could delay or prevent regulatory approval.
Preclinical studies may reveal that our human
health technology is ineffective or harmful, and/or may be unsuccessful in demonstrating efficacy and safety of our human health
technology, which would significantly limit the possibility of obtaining regulatory approval for any drug or biologic product manufactured
with our technology. The FDA requires submission of extensive preclinical, clinical and manufacturing data to assess
the efficacy and safety of potential products. We are currently in the process of conducting preclinical toxicology studies for
our multiple myeloma product candidate. Any delay in this toxicology study, or any potential negative findings in this
toxicology study, will delay our ability to file an IND for our multiple myeloma product candidate. Furthermore, the
success of preliminary studies does not ensure commercial success, and later-stage clinical trials may fail to confirm the results
of the preliminary studies.
Our success will depend on the success of
our clinical trials that have not yet begun.
It may take several years to complete the clinical
trials of a product, and failure of one or more of our clinical trials can occur at any stage of testing. We believe
that the development of our product candidate involves significant risks at each stage of testing. If clinical trial
difficulties and failures arise, our product candidate may never be approved for sale or become commercially viable.
There are a number of difficulties and risks
associated with clinical trials. These difficulties and risks may result in the failure to receive regulatory approval
to sell our product candidate or the inability to commercialize our product candidate. The possibility exists that:
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we may discover that the product candidate does not exhibit the expected therapeutic results in humans, may cause harmful side effects or have other unexpected characteristics that may delay or preclude regulatory approval or limit commercial use if approved;
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the results from early clinical trials may not be statistically significant or predictive of results that will be obtained from expanded advanced clinical trials;
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institutional review boards or regulators, including the FDA, may hold, suspend or terminate our clinical research or the clinical trials of our product candidate for various reasons, including noncompliance with regulatory requirements or if, in their opinion, the participating subjects are being exposed to unacceptable health risks;
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subjects may drop out of our clinical trials;
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our preclinical studies or clinical trials may produce negative, inconsistent or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials; and
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the cost of our clinical trials may be greater than we currently anticipate.
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Clinical trials for our human health technology
will be lengthy and expensive and their outcome is uncertain.
Before obtaining regulatory approval for the
commercial sales of any product containing our technology, we must demonstrate through clinical testing that our technology and
any product containing our technology is safe and effective for use in humans. Conducting clinical trials is a time-consuming,
expensive and uncertain process and typically requires years to complete. In our industry, the results from preclinical
studies and early clinical trials often are not predictive of results obtained in later-stage clinical trials. Some
products and technologies that have shown promising results in preclinical studies or early clinical trials subsequently fail to
establish sufficient safety and efficacy data necessary to obtain regulatory approval. At any time during clinical trials
we or the FDA might delay or halt any clinical trial for various reasons, including:
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occurrence of unacceptable toxicities or side effects;
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ineffectiveness of the product candidate;
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negative or inconclusive results from the clinical trials, or results that necessitate additional studies or clinical trials;
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delays in obtaining or maintaining required approvals from institutions, review boards or other reviewing entities at clinical sites;
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delays in patient enrollment; or
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insufficient funding or a reprioritization of financial or other resources.
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Any failure or substantial delay in successfully
completing clinical trials and obtaining regulatory approval for our product candidates could severely harm our business.
If our clinical trials for our product
candidates are delayed, we would be unable to commercialize our product candidates on a timely basis, which would materially harm
our business.
Planned clinical trials may not begin on time or may need to be
restructured after they have begun. Clinical trials can be delayed for a variety of reasons, including delays related
to:
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obtaining an effective investigational new drug application, or IND, or regulatory approval to commence a clinical trial;
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negotiating acceptable clinical trial agreement terms with prospective trial sites;
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obtaining institutional review board approval to conduct a clinical trial at a prospective site;
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recruiting qualified subjects to participate in clinical trials;
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competition in recruiting clinical investigators;
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shortage or lack of availability of supplies of drugs for clinical trials;
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the need to repeat clinical trials as a result of inconclusive results or poorly executed testing;
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the placement of a clinical hold on a study;
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the failure of third parties conducting and overseeing the operations of our clinical trials to perform their contractual or regulatory obligations in a timely fashion; and
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exposure of clinical trial subjects to unexpected and unacceptable health risks or noncompliance with regulatory requirements, which may result in suspension of the trial.
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We believe that our product candidate has significant
milestones to reach, including the successful completion of clinical trials, before commercialization. If we have significant
delays in or termination of clinical trials, our financial results and the commercial prospects for our product candidates or any
other products that we may develop will be adversely impacted. In addition, our product development costs would increase
and our ability to generate revenue could be impaired.
Any inability to license from third parties
their proprietary technologies or processes which we use in connection with the development of our technology may impair our business.
Other companies, universities and research institutions
have or may obtain patents that could limit our ability to use our technology in a product candidate or impair our competitive
position. As a result, we would have to obtain licenses from other parties before we could continue using our technology
in a product candidate. Any necessary licenses may not be available on commercially acceptable terms, if at all. If
we do not obtain required licenses, we may not be able to develop our technology into a product candidate or we may encounter significant
delays in development while we redesign methods that are found to infringe on the patents held by others.
Even if we receive regulatory approval,
consumers may not accept products containing our technology, which will prevent us from being profitable since we have no other
source of revenue.
We cannot guarantee that consumers will accept
products containing our technology. Recently, there has been consumer concern and consumer advocate activism with respect
to genetically-engineered agricultural consumer products. The adverse consequences from heightened consumer concern
in this regard could affect the markets for agricultural products developed with our technology and could also result in increased
government regulation in response to that concern. If the public or potential customers perceive our technology to be genetic modification
or genetic engineering, agricultural products grown with our technology may not gain market acceptance.
We depend on our key personnel and, if we
are not able to attract and retain qualified scientific and business personnel, we may not be able to grow our business or develop
and commercialize our technology.
We are highly dependent on our scientific advisors,
consultants and third-party research partners. Our success will also depend in part on the continued service of our
key employees and our ability to identify, hire and retain additional qualified personnel in an intensely competitive market. Although
we have a research agreement with Dr. John Thompson, this agreement may be terminated upon short or no notice. Additionally,
we do not have employment agreements with our key employees. We do not maintain key person life insurance on any member
of management. The failure to attract and retain key personnel could limit our growth and hinder our research and development
efforts.
Certain provisions of our charter, by-laws and Delaware
law could make a takeover difficult.
Certain provisions of our certificate of incorporation
and by-laws could make it more difficult for a third party to acquire control of us, even if the change in control would be beneficial
to stockholders. Our certificate of incorporation authorizes our board of directors to issue, without stockholder approval,
except as may be required by the rules of the NYSE Amex Exchange, 5,000,000 shares of preferred stock with voting, conversion and
other rights and preferences that could adversely affect the voting power or other rights of the holders of our common stock. Similarly,
our by-laws do not restrict our board of directors from issuing preferred stock without stockholder approval.
In addition, we are subject to the Business
Combination Act of the Delaware General Corporation Law which, subject to certain exceptions, restricts certain transactions and
business combinations between a corporation and a stockholder owning 15% or more of the corporation’s outstanding voting
stock for a period of three years from the date such stockholder becomes a 15% owner. These provisions may have the
effect of delaying or preventing a change of control of us without action by our stockholders and, therefore, could adversely affect
the value of our common stock.
Furthermore, in the event of our merger or consolidation
with or into another corporation, or the sale of all or substantially all of our assets in which the successor corporation does
not assume our outstanding equity awards or issue equivalent equity awards, our current equity plans require the accelerated vesting
of such outstanding equity awards.
Risks Related to Our Common Stock
We currently do not meet the NYSE Amex Exchange
continued listing standards. If our common stock is delisted from the NYSE Amex Exchange, we may not be able to list
on any other stock exchange, and our common stock may be subject to the “penny stock” regulations which may affect
the ability of our stockholders to sell their shares.
The NYSE Amex Exchange requires us to meet minimum
financial requirements in order to maintain our listing. Although we currently meet the $6,000,000 minimum net worth
continued listing requirement of the NYSE Amex Exchange, we have not met the $6,000,000 minimum net worth continued listing requirement
of the NYSE Amex Exchange for two consecutive quarters and have received a notice of noncompliance from the NYSE Amex Exchange. We
submitted a plan of compliance to the NYSE Amex Exchange discussing how we intend to regain compliance with the continued listing
requirements. The NYSE Amex Exchange has accepted our plan of compliance and granted us an extension until April 29,
2011 to regain compliance with the NYSE's continued listing standards. During the extension period, we remain subject
to periodic review by NYSE Staff. Failure to make progress consistent with the plan or to regain compliance with the continued
listing standards by the end of the extension period could result in our company being delisted from the NYSE. If we
are delisted from the NYSE Amex Exchange, our common stock likely will become a “penny stock.” In general,
regulations of the SEC define a “penny stock” to be an equity security that is not listed on a national securities
exchange or the NASDAQ Stock Market and that has a market price of less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. If our common stock becomes a penny stock, additional sales practice
requirements would be imposed on broker-dealers that sell such securities to persons other than certain qualified investors. For
transactions involving a penny stock, unless exempt, a broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser’s written consent to the transaction prior to the sale. In addition, the rules on penny
stocks require delivery, prior to and after any penny stock transaction, of disclosures required by the SEC.
If our stock is not accepted for listing on
the NYSE Amex Exchange, we will make every possible effort to have it listed on the Over the Counter Bulletin Board, or the OTC
Bulletin Board. If our common stock were to be traded on the OTC Bulletin Board, the Securities Exchange Act of 1934,
as amended, and related Securities and Exchange Commission (SEC) rules would impose additional sales practice requirements on broker-dealers
that sell our securities. These rules may adversely affect the ability of stockholders to sell our common stock and
otherwise negatively affect the liquidity, trading market and price of our common stock.
We believe that the listing of our common stock
on a recognized national trading market, such as the NYSE Amex Exchange, is an important part of our business and strategy. Such
a listing helps our stockholders by providing a readily available trading market with current quotations. Without that,
stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale or purchase of our stock
would likely be made more difficult and the trading volume and liquidity of our stock would likely decline. The absence
of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded it by other parties. In
that regard, the absence of a listing on a recognized national trading market will also affect our ability to benefit from the
use of our operations and expansion plans, including for use in licensing agreements, joint ventures, the development of strategic
relationships and acquisitions, which are critical to our business and strategy and none of which is currently the subject of any
agreement, arrangement or understanding, with respect to any future financing or strategic relationship we may undertake. A
delisting from the NYSE Amex Exchange could result in negative publicity and could negatively impact our ability to raise capital
in the future.
Our management and other affiliates have
significant control of our common stock and could significantly influence our actions in a manner that conflicts with our interests
and the interests of other stockholders.
As of June 30, 2010, our executive officers,
directors and affiliated entities together beneficially own approximately 53.3% of the outstanding shares of our common stock,
assuming the exercise of options and warrants which are currently exercisable or will become exercisable within 60 days of June
30, 2010, held by these stockholders. As a result, these stockholders, acting together, will be able to exercise significant
influence over matters requiring approval by our stockholders, including the election of directors, and may not always act in the
best interests of other stockholders. Such a concentration of ownership may have the effect of delaying or preventing
a change in control of us, including transactions in which our stockholders might otherwise receive a premium for their shares
over then current market prices.
A significant portion of our total outstanding
shares of common stock may be sold in the market in the near future, which could cause the market price of our common stock to
drop significantly.
As of June 30, 2010, we had 50,092,204 shares
of our common stock issued and outstanding and 9,235 shares of convertible preferred stock outstanding which can convert into 28,859,375
shares of common stock. Approximately 34,164,431 shares of such shares are registered pursuant to registration statements
on Form S-3 and 44,787,148 of which are either eligible to be sold under SEC Rule 144 or are in the public float. In
addition, we have registered 35,890,007 shares of our common stock underlying warrants previously issued on Form S-3 registration
statements and we registered 11,137,200 shares of our common stock underlying options granted or to be granted under our stock
option plan. Consequently, sales of substantial amounts of our common stock in the public market, or the perception
that such sales could occur, may have a material adverse effect on our stock price.
Our common stock has a limited trading market,
which could limit your ability to resell your shares of common stock at or above your purchase price.
Our common stock is quoted on the NYSE Amex
Exchange and currently has a limited trading market. The NYSE Amex Exchange requires us to meet minimum financial requirements
in order to maintain our listing. Currently, we do not meet the continued listing requirements of the NYSE Amex Exchange. As
we do not meet the continued listing standards, we could be delisted. We cannot assure you that an active trading market
will develop or, if developed, will be maintained. As a result, our stockholders may find it difficult to dispose of
shares of our common stock and, as a result, may suffer a loss of all or a substantial portion of their investment.
The market price of our common stock may
fluctuate and may drop below the price you paid.
We cannot assure you that you will be able to
resell the shares of our common stock at or above your purchase price. The market price of our common stock may fluctuate
significantly in response to a number of factors, some of which are beyond our control. These factors include:
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quarterly variations in operating results;
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the progress or perceived progress of our research and development efforts;
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changes in accounting treatments or principles;
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announcements by us or our competitors of new technology, product and service offerings, significant contracts, acquisitions or strategic relationships;
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additions or departures of key personnel;
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future offerings or resales of our common stock or other securities;
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stock market price and volume fluctuations of publicly-traded companies in general and development companies in particular; and
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general political, economic and market conditions.
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For example, during the year ended June 30,
2010, our common stock traded between $0.25 per share and $0.83 per share.
Because we do not intend to pay, and have
not paid, any cash dividends on our shares of common stock, our stockholders will not be able to receive a return on their shares
unless the value of our common stock appreciates and they sell their shares.
We have never paid or declared any cash dividends
on our common stock, and we intend to retain any future earnings to finance the development and expansion of our business. We
do not anticipate paying any cash dividends on our common stock in the foreseeable future. Therefore, our stockholders
will not be able to receive a return on their investment unless the value of our common stock appreciates and they sell their shares.
Our stockholders may experience substantial
dilution as a result of the conversion of convertible preferred stock, the exercise of options and warrants to purchase our common
stock, or due to anti-dilution provisions relating to any on the foregoing.
As of June 30, 2010, we have outstanding 9,235
shares of convertible preferred stock which may convert into 28,859,375 shares of our common stock and warrants to purchase 55,171,226
shares of our common stock. In addition, as of June 30, 2010, we have reserved 15,204,884 shares of our common stock for
issuance upon the exercise of options granted or available to be granted pursuant to our stock option plan, all of which may be
granted in the future. The conversion of the convertible preferred stock and the exercise of these options and warrants will
result in dilution to our existing stockholders and could have a material adverse effect on our stock price. The conversion price
of the convertible preferred stock and certain warrants are also subject to certain anti-dilution adjustments.
DESCRIPTION OF THE SECURITIES WE MAY OFFER
We may issue, in one or more offerings, any
combination of warrants, preferred stock or common stock.
This prospectus contains a summary of the general
terms of the various securities that we may offer. The prospectus supplement relating to any particular securities offered will
describe the specific terms of the securities, which may be in addition to or different from the general terms summarized in this
prospectus. The summary in this prospectus and in any prospectus supplement does not describe every aspect of the securities and
is subject to and qualified in its entirety by reference to all applicable provisions of the documents relating to the securities
offered. These documents are or will be filed as exhibits to or incorporated by reference in the registration statement.
In addition, the prospectus supplement will
set forth the terms of the offering, the initial public offering price and estimated net proceeds to us. Where applicable, the
prospectus supplement will also describe any material United States federal income tax considerations relating to the securities
offered and indicate whether the securities offered are or will be listed on any securities exchange.
WARRANTS
Please note that in this section references
to holders mean those who own warrants registered in their own names, on the books that we or our agent maintain for this purpose,
and not those who own beneficial interests in warrants registered in street name or in warrants issued in book-entry form through
one or more depositaries. Owners of beneficial interests in the warrants should read the section below entitled “Book-Entry
Procedures and Settlement”.
General
We may offer warrants separately or together
with our equity securities.
We may issue warrants in such amounts or in
as many distinct series as we wish. This section summarizes terms of the warrants that apply generally to all series. Most of the
financial and other specific terms of your warrant will be described in the prospectus supplement. Those terms may vary from the
terms described here.
The warrants of a series will be issued under
a separate warrant agreement to be entered into between us and one or more banks or trust companies, as warrant agent, as set forth
in the prospectus supplement. A form of each warrant agreement, including a form of warrant certificate representing each warrant,
reflecting the particular terms and provisions of a series of offered warrants, will be filed with the SEC at the time of the offering
and incorporated by reference in the registration statement of which this prospectus forms a part. You can obtain a copy of any
form of warrant agreement when it has been filed by following the directions outlined in “Where You Can Find More Information;
Incorporation of Documents by Reference” or by contacting the applicable warrant agent.
The following briefly summarizes the material
provisions of the warrant agreements and the warrants. As you read this section, please remember that the specific terms of your
warrant as described in the prospectus supplement will supplement and, if applicable, may modify or replace the general terms described
in this section. You should read carefully the prospectus supplement and the more detailed provisions of the warrant agreement
and the warrant certificate, including the defined terms, for provisions that may be important to you. If there are differences
between the prospectus supplement and this prospectus, the prospectus supplement will control. Thus, the statements made in this
section may not apply to your warrant.
Types of Warrants
We may issue equity warrants. An equity warrant
is a warrant for the purchase or sale of our equity securities. We may also issue warrants for the purchase or sale of, or whose
cash value is determined by reference to the performance, level or value of, one or more of the following: securities of one or
more issuers, including those issued by us and described in this prospectus or equity securities issued by third parties; a currency
or currencies; a commodity or commodities; and other financial, economic or other measure or instrument, including the occurrence
or non-occurrence of any event or circumstances, or one or more indices or baskets of these items.
Information in the Prospectus Supplement
The prospectus supplement will contain, where
applicable, the following information about the warrants:
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the specific designation and aggregate number of, and the price at which we will issue, the warrants;
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the currency or currency unit with which the warrants may be purchased and in which any payments due to or from the holder upon exercise must be made;
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the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
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whether the exercise price may be paid in cash, by the exchange of warrants or other securities or both, and the method of exercising the warrants;
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whether the warrants will be settled by delivery of the underlying securities or other property or in cash;
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whether and under what circumstances we may cancel the warrants prior to their expiration date, in which case the holders will be entitled to receive only the applicable cancellation amount, which may be either a fixed amount or an amount that varies during the term of the warrants in accordance with a schedule or formula;
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whether the warrants will be issued in global or non-global form;
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the identities of the warrant agent, any depositaries and any paying, transfer, calculation or other agents for the warrants;
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any securities exchange or quotation system on which the warrants or any securities deliverable upon exercise of the warrants may be listed;
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whether the warrants are to be sold separately or with other securities, and if the warrants are to be sold with the securities of another company or other companies, certain information regarding such company or companies; and
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any other terms of the warrants.
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No holder of a warrant will, as such, have any
rights of a holder of the equity securities or other warrant property purchasable under or in the warrant, including any right
to receive payment thereunder.
No Limit on Issuance of Warrants
The warrant agreements will not limit the number
of warrants or other securities that we may issue.
Modifications
We and the relevant warrant agent may, without
the consent of the holders, amend each warrant agreement and the terms of each issue of warrants, for the purpose of curing any
ambiguity or of correcting or supplementing any defective or inconsistent provision, or in any other manner that we may deem necessary
or desirable and that will not adversely affect the interests of the holders of the outstanding unexercised warrants in any material
respect.
We and the relevant warrant agent also may,
with the consent of the holders of at least a majority in number of the outstanding unexercised warrants affected, modify or amend
the warrant agreement and the terms of the warrants. No such modification or amendment may, without the consent of each holder
of an affected warrant:
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reduce the amount receivable upon exercise, cancellation or expiration;
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shorten the period of time during which the warrants may be exercised;
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otherwise materially and adversely affect the exercise rights of the beneficial owners of the warrants; or
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reduce the percentage of outstanding warrants whose holders must consent to modification or amendment of the applicable warrant agreement or the terms of the warrants.
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Merger and Similar Transactions Permitted; No Restrictive
Covenants or Events of Default
The warrant agreements will not restrict our
ability to merge or consolidate with, or sell our assets to, another firm or to engage in any other transactions. If at any time
there is a merger or consolidation involving us or a sale or other disposition of all or substantially all of our assets, the successor
or assuming company will be substituted for us, with the same effect as if it had been named in the warrant agreement and in the
warrants. We will be relieved of any further obligation under the warrant agreement or warrants, and, in the event of any such
merger, consolidation, sale or other disposition, we as the predecessor corporation may at any time thereafter be dissolved, wound
up or liquidated.
The warrant agreements will not include any
restrictions on our ability to put liens on our assets, including our interests in our subsidiaries, nor will they provide for
any events of default or remedies upon the occurrence of any events of default.
Warrant Agreements Will Not Be Qualified under Trust Indenture
Act
No warrant agreement will be qualified as an
indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore, holders of
warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect to their warrants.
Enforceability of Rights by Beneficial Owner
Each warrant agent will act solely as our agent
in connection with the issuance and exercise of the applicable warrants and will not assume any obligation or relationship of agency
or trust for or with any registered holder of or owner of a beneficial interest in any warrant. A warrant agent will have no duty
or responsibility in case of any default by us under the applicable warrant agreement or warrant certificate, including any duty
or responsibility to initiate any proceedings at law or otherwise or to make any demand upon us.
Holders may, without the consent of the applicable
warrant agent, enforce by appropriate legal action, on their own behalf their right to exercise their warrants.
Governing Law
Unless otherwise stated in the prospectus supplement,
the warrants and each warrant agreement will be governed by New York law.
PREFERRED STOCK
Our certificate of incorporation authorizes
5,000,000 shares of preferred stock, $0.01 par value per share, of which 12,000 shares of preferred stock has been designated as
Series A preferred stock and 2,000 shares of preferred stock has been designated as Series B preferred stock. As of October 25,
2010, 10,297 shares of our Series A preferred stock has been issued and 4,345 shares are outstanding and 1,200 shares of our Series
B preferred stock are issued and outstanding. The preferred stock may be issued from time to time in one or more series,
with such distinctive serial designations, rights and preferences as shall be determined by the board of directors.
The following briefly summarizes the material
terms of our preferred stock, other than pricing and related terms disclosed for a particular issuance in an accompanying prospectus
supplement. You should read the particular terms of any series of preferred stock we offer which will be described in more detail
in the prospectus supplement prepared for such series, together with the more detailed provisions of our certificate of incorporation
and the certificate of designations relating to each particular series of preferred stock, for provisions that may be important
to you. The certificate of designations relating to a particular series of preferred stock offered by way of an accompanying prospectus
supplement will be filed with the SEC at the time of the offering and incorporated by reference in the registration statement of
which this prospectus forms a part. You can obtain a copy of this document by following the directions outlined in “Where
You Can Find More Information; Incorporation of Documents by Reference.” The prospectus supplement will also state whether
any of the terms summarized below do not apply to the series of preferred stock being offered.
General
Under our certificate of incorporation, our
board of directors is authorized to issue shares of preferred stock in one or more series, and to establish from time to time a
series of preferred stock with the following terms specified:
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the number of shares to be included in the series;
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the designation, powers, preferences and rights of the shares of the series; and
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the qualifications, limitations or restrictions of such series, except as otherwise stated in the certificate of incorporation.
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Prior to the issuance of any series of preferred
stock, our board of directors will adopt resolutions creating and designating the series as a series of preferred stock and the
resolutions will be filed in a certificate of designation as an amendment to the certificate of incorporation. The term board of
directors includes any duly authorized committee.
The rights of holders of the preferred stock
offered may be adversely affected by the rights of holders of any shares of preferred stock that may be issued in the future, provided
that the future issuances are first approved by the holders of the class(es) of preferred stock adversely affected. The board of
directors may cause shares of preferred stock to be issued in public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to obtain additional financing in connection with acquisitions or otherwise,
and issuances to our officers, directors and employees pursuant to benefit plans or otherwise. Shares of preferred stock we issue
may have the effect of rendering more difficult or discouraging an acquisition of us deemed undesirable by our board of directors.
The preferred stock will be, when issued, fully
paid and nonassessable. Holders of preferred stock will not have any preemptive or subscription rights to acquire more of our stock.
We will name the transfer agent, registrar,
dividend disbursing agent and redemption agent for shares of each series of preferred stock in the prospectus supplement relating
to such series.
Rank
Unless otherwise specified for a particular
series of preferred stock in an accompanying prospectus supplement, each series will rank on an equal basis with each other series
of preferred stock, and prior to the common stock, as to dividends and distributions of assets.
Dividends
Holders of each series of preferred stock will
be entitled to receive cash dividends, when, as and if declared by our board of directors out of funds legally available for dividends.
The rates and dates of payment of dividends will be set forth in the prospectus supplement relating to each series of preferred
stock. Dividends will be payable to holders of record of preferred stock as they appear on our books on the record dates fixed
by the board of directors. Dividends on any series of preferred stock may be cumulative or noncumulative.
We may not declare, pay or set apart for payment
dividends on the preferred stock unless full dividends on any other series of preferred stock that ranks on an equal or senior
basis have been paid or sufficient funds have been set apart for payment for:
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all prior dividend periods of the other series of preferred stock that pay dividends on a cumulative basis; or
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the immediately preceding dividend period of the other series of preferred stock that pay dividends on a noncumulative basis.
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Partial dividends declared on shares of preferred
stock and any other series of preferred stock ranking on an equal basis as to dividends will be declared pro rata. A pro rata declaration
means that the ratio of dividends declared per share to accrued dividends per share will be the same for both series of preferred
stock.
Similarly, we may not declare, pay or set apart
for payment non-stock dividends or make other payments on the common stock or any other of our stock ranking junior to the preferred
stock until full dividends on the preferred stock have been paid or set apart for payment for:
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all prior dividend periods if the preferred stock pays dividends on a cumulative basis; or
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the immediately preceding dividend period if the preferred stock pays dividends on a noncumulative basis.
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Conversion and Exchange
The prospectus supplement for any series of
preferred stock will state the terms, if any, on which shares of that series are convertible into or exchangeable for shares of
our common stock or other securities.
Redemption
If so specified in the applicable prospectus
supplement, a series of preferred stock may be redeemable at any time, in whole or in part, at our option or at the option of the
holder thereof and may be mandatorily redeemed.
Any partial redemptions of preferred stock will
be made in a way that our board of directors decides is equitable.
Unless we default in the payment of the redemption
price, dividends will cease to accrue after the redemption date on shares of preferred stock called for redemption and all rights
of holders of such shares will terminate except for the right to receive the redemption price.
Liquidation Preference
Upon our voluntary or involuntary liquidation,
dissolution or winding up, holders of each series of preferred stock will be entitled to receive distributions upon liquidation
in the amount set forth in the prospectus supplement relating to such series of preferred stock, plus an amount equal to any accrued
and unpaid dividends. Such distributions will be made before any distribution is made on any securities ranking junior relating
to preferred stock in liquidation, including common stock.
If the liquidation amounts payable relating
to the preferred stock of any series and any other securities ranking on a parity regarding liquidation rights are not paid in
full, the holders of the preferred stock of such series and such other securities will share in any such distribution of our available
assets on a ratable basis in proportion to the full liquidation preferences. Holders of such series of preferred stock will not
be entitled to any other amounts from us after they have received their full liquidation preference.
Voting Rights
The holders of shares of our preferred stock
will have no voting rights, except:
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as otherwise stated in the prospectus supplement;
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as otherwise stated in the certificate of designations establishing such series; and
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as required by applicable law.
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COMMON STOCK
Under our certificate of incorporation, as amended
to date, we are authorized to issue up to 250,000,000 shares of common stock, $0.01 par value per share. At October 25, 2010,
approximately 67,713,178 shares of common stock were issued and outstanding. The following description of our common stock, certificate
of incorporation and bylaws are only summaries, and we encourage you to review complete copies of these documents. You can obtain
copies of these documents by following the directions outlined in “Where You Can Find More Information; Incorporation of
Documents by Reference”.
Dividends, Voting Rights and Liquidation
Each stockholder of record is entitled to one
vote for each outstanding share of our common stock owned by that stockholder on every matter properly submitted to the stockholders
for their vote. After satisfaction of the dividend rights of holders of any preferred stock, holders of common stock are entitled
to any dividend declared by our board out of funds legally available for that purpose. After the payment of liquidation preferences
to holders of any preferred stock, holders of common stock are entitled to receive, on a pro rata basis, all our remaining assets
available for distribution to stockholders in the event of our liquidation, dissolution or winding up. Holders of common stock
do not have any preemptive right to become subscribers or purchasers of additional shares of any class of our capital stock. The
rights, preferences and privileges of holders of common stock are subject to, and may be injured by, the rights of the holders
of shares of any series of preferred stock that we may designate and issue in the future.
Transfer Agent and Registrar
American Stock Transfer and Trust Company is
the transfer agent and registrar for our common stock.
Delaware Law and Certain Certificate of Incorporation and
By-Law Provisions
The provisions of Delaware law and of our certificate
of incorporation and by-laws discussed below could discourage or make it more difficult to accomplish a proxy contest or other
change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is possible
that these provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may otherwise
consider to be in their best interests or the best interests of Senesco.
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Business Combinations
. We are subject to the provisions of Section 203 of the General Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to specified exceptions, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s voting stock.
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Limitation of Liability; Indemnification
. Our certificate of incorporation contains provisions permitted under the General Corporation Law of Delaware relating to the liability of directors. The provisions eliminate, to the extent legally permissible, a director’s liability for monetary damages for a breach of fiduciary duty, except in circumstances involving wrongful acts, such as the breach of a director’s duty of loyalty or acts or omissions that involve intentional misconduct or a knowing violation of law. The limitation of liability described above does not alter the liability of our directors and officers under federal securities laws. Furthermore, our certificate of incorporation contains provisions to indemnify our directors and officers to the fullest extent permitted by the General Corporation Law of Delaware. These provisions do not limit or eliminate our right or the right of any shareholder of ours to seek non-monetary relief, such as an injunction or rescission in the event of a breach by a director or an officer of his duty of care to us. We believe that these provisions assist us in attracting and retaining qualified individuals to serve as directors.
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BOOK-ENTRY PROCEDURES AND SETTLEMENT
Most offered securities will be book-entry,
or global, securities. Upon issuance, all book-entry securities will be represented by one or more fully registered global securities,
without coupons. Each global security will be deposited with, or on behalf of, The Depository Trust Company, or DTC, a securities
depository, and will be registered in the name of DTC or a nominee of DTC. DTC will thus be the only registered holder of these
securities.
Purchasers of securities may only hold interests
in the global securities through DTC if they are participants in the DTC system. Purchasers may also hold interests through a securities
intermediary — banks, brokerage houses and other institutions that maintain securities accounts for customers — that
has an account with DTC or its nominee. DTC will maintain accounts showing the security holdings of its participants, and these
participants will in turn maintain accounts showing the security holdings of their customers. Some of these customers may themselves
be securities intermediaries holding securities for their customers. Thus, each beneficial owner of a book-entry security will
hold that security indirectly through a hierarchy of intermediaries, with DTC at the top and the beneficial owner’s own securities
intermediary at the bottom.
The securities of each beneficial owner of a
book-entry security will be evidenced solely by entries on the books of the beneficial owner’s securities intermediary. The
actual purchaser of the securities will generally not be entitled to have the securities represented by the global securities registered
in its name and will not be considered the owner under the applicable indenture, the declaration of trust or other applicable governing
documents relating to the security. In most cases, a beneficial owner will also not be able to obtain a paper certificate evidencing
the holder’s ownership of securities. The book-entry system for holding securities eliminates the need for physical movement
of certificates. However, the laws of some jurisdictions require some purchasers of securities to take physical delivery of their
securities in definitive form. These laws may impair the ability to transfer book-entry securities.
A beneficial owner of book-entry securities
represented by a global security may exchange the securities for definitive, or paper, securities only if:
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DTC is unwilling or unable to continue as depositary for such global security and we do not appoint a qualified replacement for DTC within 90 days; or
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we in our sole discretion decide to allow some or all book-entry securities to be exchangeable for definitive securities in registered form.
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Unless we indicate otherwise, any global security
that is exchangeable will be exchangeable in whole for definitive securities in registered form, with the same terms and of an
equal aggregate principal amount. Definitive securities will be registered in the name or names of the person or persons specified
by DTC in a written instruction to the registrar of the securities. DTC may base its written instruction upon directions that it
receives from its participants.
In this prospectus, for book-entry securities,
references to actions taken by security holders will mean actions taken by DTC upon instructions from its participants, and references
to payments and notices of redemption to security holders will mean payments and notices of redemption to DTC as the registered
holder of the securities for distribution to participants in accordance with DTC’s procedures.
DTC is a limited purpose trust company organized
under the laws of the State of New York, a member of the Federal Reserve System, a clearing corporation within the meaning of the
New York Uniform Commercial Code and a clearing agency registered under section 17A of the Securities Exchange Act of 1934. The
rules applicable to DTC and its participants are on file with the SEC.
Neither we nor any trustee or underwriter will
have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership
interest in the book-entry securities or for maintaining, supervising or reviewing any records relating to the beneficial ownership
interests.
Clearstream and Euroclear
Links may be established among DTC, Clearstream
Banking, societe anonyme, Luxembourg (Clearstream Banking SA) and Euroclear (two international clearing systems that perform functions
similar to those that DTC performs in the U.S.), to facilitate the initial issuance of book-entry securities and cross-market transfers
of book-entry securities associated with secondary market trading.
Although we understand that DTC, Clearstream
Banking SA and Euroclear have agreed to the procedures provided below in order to facilitate transfers, they are under no obligation
to perform such procedures, and the procedures may be modified or discontinued at any time.
Clearstream Banking SA and Euroclear will record
the ownership interests of their participants in much the same way as DTC, and DTC will record the aggregate ownership of each
of the U.S. agents of Clearstream Banking SA and Euroclear, as participants in DTC.
When book-entry securities are to be transferred
from the account of a DTC participant to the account of a Clearstream Banking SA participant or a Euroclear participant, the purchaser
must send instructions to Clearstream Banking SA or Euroclear through a participant at least one business day prior to settlement.
Clearstream Banking SA or Euroclear, as the case may be, will instruct its U.S. agent to receive book-entry securities against
payment. After settlement, Clearstream Banking SA or Euroclear will credit its participant’s account. Credit for the book-entry
securities will appear on the next day (European time).
Because settlement is taking place during New
York business hours, DTC participants can employ their usual procedures for sending book-entry securities to the relevant U.S.
agent acting for the benefit of Clearstream Banking SA or Euroclear participants. The sale proceeds will be available to the DTC
seller on the settlement date. Thus, to the DTC participant, a cross-market transaction will settle no differently than a trade
between two DTC participants.
When a Clearstream Banking SA or Euroclear participant
wishes to transfer book-entry securities to a DTC participant, the seller must send instructions to Clearstream Banking SA or Euroclear
through a participant at least one business day prior to settlement. In these cases, Clearstream Banking SA or Euroclear will instruct
its U.S. agent to transfer the book-entry securities against payment. The payment will then be reflected in the account of the
Clearstream Banking SA or Euroclear participant the following day, with the proceeds back-valued to the value date (which would
be the preceding day, when settlement occurs in New York). If settlement is not completed on the intended value date (i.e., the
trade fails), proceeds credited to the Clearstream Banking SA or Euroclear participant’s account would instead be valued
as of the actual settlement date.
We may issue, in one or more offerings, any
combination of warrants, preferred stock or common stock.
This prospectus contains a summary of the general
terms of the various securities that we may offer. The prospectus supplement relating to any particular securities offered will
describe the specific terms of the securities, which may be in addition to or different from the general terms summarized in this
prospectus. The summary in this prospectus and in any prospectus supplement does not describe every aspect of the securities and
is subject to and qualified in its entirety by reference to all applicable provisions of the documents relating to the securities
offered. These documents are or will be filed as exhibits to or incorporated by reference in the registration statement.
In addition, the prospectus supplement will
set forth the terms of the offering, the initial public offering price and estimated net proceeds to us. Where applicable, the
prospectus supplement will also describe any material United States federal income tax considerations relating to the securities
offered and indicate whether the securities offered are or will be listed on any securities exchange.
USE OF PROCEEDS
Unless otherwise set forth in the applicable
prospectus supplement, we intend to use the net proceeds from the sale of the securities we offer by this prospectus for general
corporate purposes, which may include, among other things:
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general corporate purposes, including additions to working capital and capital expenditures;
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research and development activities; and
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the expansion of our business through internal growth or acquisitions.
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We may raise additional funds from time to time
through equity or debt financing, including borrowings under credit facilities, to finance our business and operations. If required,
we will include a more detailed description of the use of proceeds from any specific offering of securities in the prospectus supplement
relating to that offering.
PLAN OF DISTRIBUTION
We may sell our securities from time to time
through underwriters, dealers or agents or directly to purchasers, in one or more transactions at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated
prices. We may use these methods in any combination.
By Underwriters
We may use an underwriter or underwriters in
the offer or sale of our securities:
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If we use an underwriter or underwriters, the offered securities will be acquired by the underwriters for their own account.
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We will include the names of the specific managing underwriter or underwriters, as well as any other underwriters, the amounts underwritten by each underwriter, and the terms of the transactions, including the compensation the underwriters and dealers will receive, in the prospectus supplement.
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The underwriters will use this prospectus and the prospectus supplement to sell our securities.
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We may also sell securities pursuant to one
or more standby agreements with one or more underwriters in connection with the call, redemption or exchange of a specified class
or series of any of our outstanding securities. In a standby agreement, the underwriter or underwriters would agree either:
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to purchase from us up to the number of shares of common stock that would be issuable upon conversion or exchange of all the shares of the class or series of our securities at an agreed price per share of common stock; or
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to purchase from us up to a specified dollar amount of offered securities at an agreed price per offered security, which price may be fixed or may be established by formula or other method and which may or may not relate to market prices of our common stock or any other outstanding security.
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The underwriter or underwriters may also agree,
if applicable, to convert or exchange any securities of the class or series held or purchased by the underwriter or underwriters
into or for our common stock or other security.
The underwriter or underwriters may assist in
the solicitation of conversions or exchanges by holders of the class or series of securities.
By Dealers
We may use a dealer to sell our securities.
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If we use a dealer, such person, as principal, will sell our securities to the dealer.
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The dealer will then resell our securities to the public at varying prices that the dealer will determine at the time it sells our securities.
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We will include the name of the dealer and the terms of our transactions with the dealer in the prospectus supplement.
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By Agents
We may designate agents to solicit offers to
purchase our securities.
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We will name any agent involved in offering or selling our securities and any commissions that we will pay to the agent in the prospectus supplement.
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Unless indicated otherwise in the prospectus supplement, our agents will act on a best efforts basis for the period of their appointment.
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An agent may be deemed to be underwriters under the Securities Act of any of our securities that they offer or sell.
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By Delayed Delivery Contracts
We may authorize our agents and underwriters
to solicit offers by certain institutions to purchase our securities at the public offering price under delayed delivery contracts.
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If we use delayed delivery contracts, we will disclose that we are using them in the prospectus supplement and will tell you when payment will be demanded and securities delivered under the delayed delivery contracts.
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These delayed delivery contracts will be subject only to the conditions set forth in the prospectus supplement.
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We will indicate in the prospectus supplement the commission that underwriters and agents soliciting purchases of our securities under delayed delivery contracts will be entitled to receive.
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We may directly solicit offers to purchase our
securities, and we may directly sell our securities to institutional or other investors, including our affiliates. We describe
the terms of our direct sales in the prospectus supplement. We may also sell our securities upon the exercise of rights which we
may issue.
General Information
Underwriters, dealers and agents that participate
in the distribution of our securities may be underwriters as defined in the Securities Act, and any discounts or commissions they
receive and any profit they make on the resale of the offered securities may be treated as underwriting discounts and commissions
under the Securities Act. Any underwriters or agents will be identified and their compensation described in a prospectus supplement.
We may indemnify agents, underwriters, and dealers against certain civil liabilities, including liabilities under the Securities
Act, or make contributions to payments they may be required to make relating to those liabilities. Our agents, underwriters, and
dealers, or their affiliates, may be customers of, engage in transactions with, or perform services for us in the ordinary course
of business.
Each series of securities offered by this prospectus
may be a new issue of securities with no established trading market. Any underwriters to whom securities offered by this prospectus
are sold by us for public offering and sale may make a market in the securities offered by this prospectus, but the underwriters
will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to
the liquidity of the trading market for any securities offered by this prospectus.
Representatives of the underwriters through
whom our securities are sold for public offering and sale may engage in over-allotment, stabilizing transactions, syndicate short
covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase
the offered securities so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve purchases
of the offered securities in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the representative of the underwriters to reclaim a selling concession from a syndicate member when the offered
securities originally sold by such syndicate member are purchased in a syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the offered securities
to be higher than it would otherwise be in the absence of such transactions. These transactions may be effected on a national securities
exchange and, if commenced, may be discontinued at any time. Underwriters, dealers and agents may be customers of, engage in transactions
with or perform services for, us and our subsidiaries in the ordinary course of business.
We will bear all costs, expenses and fees in
connection with the registration of the securities as well as the expense of all commissions and discounts, if any, attributable
to the sales of any of our securities by us.
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION
OF DOCUMENTS BY
REFERENCE
We file annual, quarterly and special reports,
proxy statements and other information with the Commission. You may read and copy any document we file at the Commission’s
public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information
on the public reference rooms. Many of the filings we make with the Commission are also available to the public from the Securities
and Exchange Commission’s Website at “http://www.sec.gov.” We make available free of charge our annual, quarterly
and current reports, proxy statements and other information upon request. To request such materials, please send an e-mail to jbrooks@senesco.com
or contact Joel Brooks, our Chief Financial Officer, at our address as set forth below. In addition, our common stock is listed
for trading on the NYSE Amex under the symbol “SNT.” We maintain a Website at “http://www.senesco.com”
(this is not a hyperlink, you must visit this website through an Internet browser). Our Website and the information contained therein
or connected thereto are not incorporated into this prospectus.
We have filed with the Commission a Registration
Statement (which contains this prospectus) on Form S-3 under the Securities Act. The registration statement relates to our offering
of the common stock, preferred stock and warrants. This prospectus does not contain all of the information set forth in the registration
statement and the exhibits and schedules to the registration statement. Please refer to the registration statement and its exhibits
and schedules for further information with respect to us and our common stock, preferred stock or warrants. Statements contained
in this prospectus as to the contents of any contract or other document are not necessarily complete and, in each instance, we
refer you to the copy of that contract or document filed as an exhibit to the Registration Statement. You may read and obtain a
copy of the registration statement and its exhibits and schedules from the Commission, as described in the preceding paragraph.
The Commission allows us to “incorporate
by reference” the information we file with them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information
that we file later with the Commission will automatically update and supersede this information. We incorporate by reference the
documents filed with the Commission listed below:
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Our Annual Report on Form 10-K for the year ended June 30, 2010, filed on September 28, as amended on October 25, 2010;
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The description of our capital stock contained in our Registration Statement on Form 8-A filed on May 14, 2002; and
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All documents we have filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of the registration statement and prior to the effectiveness of the registration statement, as well as subsequent to the date of this prospectus and prior to the termination of this offering, shall be deemed to be incorporated by reference into this prospectus and to be a part of this prospectus from the date of the filing of the documents.
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You may request a copy of these filings, at
no cost, by sending an e-mail to jbrooks@senesco.com and requesting any one or more of such filings or by contacting Joel Brooks,
our Chief Financial Officer at the following address or telephone number: Senesco Technologies, Inc., 303 George Street, Suite
420, New Brunswick, New Jersey 08901, Attention: Chief Financial Officer; (732) 296-8400. Exhibits to the documents will not be
sent, unless those exhibits have specifically been incorporated by reference in this prospectus.
This prospectus is part of a registration statement
we filed with the Commission. You should rely only on the information contained in this prospectus. We have authorized no one to
provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document.
LEGAL MATTERS
Legal matters with respect to the securities
offered hereby are being passed upon for us by Morgan, Lewis and Bockius LLP, Princeton, New Jersey.
EXPERTS
The financial statements as of June 30, 2010
and 2009 and for each of the three years in the period ended June 30, 2010 and for the cumulative period from July 1, 1998 (inception)
to June 30, 2010, incorporated by reference in this prospectus and elsewhere in the registration statement have been audited by
McGladrey & Pullen, LLP, independent registered public accounting firm, as indicated in their report with respect thereto,
and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing.
$25,000,000
WARRANTS
PREFERRED STOCK
COMMON STOCK
PROSPECTUS
October 26, 2010
3,846,154 Shares of Common Stock
Warrants to Purchase 1,923,077 Shares of
Common Stock
And 1,923,077 Shares of Common Stock Underlying
the Warrants
PROSPECTUS SUPPLEMENT NO. 3
March 2, 2012
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