Final
Prospectus
Pursuant
to Rule 424(b)(3)
Registration
No. 333-166277
PROSPECTUS
65,435,938
shares of common stock
SENESCO
TECHNOLOGIES, INC.
The
selling securityholders listed on page 24 of this prospectus are offering
for resale up to 65,435,938 shares of our common stock, referred to as the
“offered shares.” All of the offered shares are issuable, or may in the future
become issuable, with respect to securities issued in connection with the
private placement of 10,297 shares of our Series A convertible preferred
stock, referred to as the Series A preferred stock or preferred stock, and
33,257,813 common stock purchase warrants, referred to as the April 2010
warrants, that we completed in April 2010, referred to as the April 2010
financing.
The
offered shares may only be offered for resale by the selling securityholders
pursuant to this prospectus if and when they are actually issued. The offered
shares are comprised of the following: (a) 32,178,125 shares of common
stock issuable upon conversion of our Series A preferred stock and (b)
33,257,813 shares of common stock issuable upon exercise of the April 2010
warrants. We will not receive any of the proceeds from the sale by the selling
securityholders of the securities offered hereby, but we will receive proceeds
from any cash exercise of the April 2010 warrants.
The
securities offered hereby may be offered from time to time by the selling
securityholders through ordinary brokerage transactions in the over-the-counter
markets, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices and in other ways as described in the
“Plan of Distribution.”
Our
common stock is quoted on the NYSE Amex under the symbol “SNT.” On
June 16, 2010, the last sale price for our common stock was $0.51.
Investing
in our securities involves a high degree of risk. For more information, see
“Risk Factors” beginning on page 10.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is June 23, 2010
TABLE
OF CONTENTS
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Page
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FORWARD-LOOKING
STATEMENTS
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1
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OUR
COMPANY
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1
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RISK
FACTORS
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10
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USE
OF PROCEEDS
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23
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SELLING
SECURITYHOLDERS
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24
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PLAN
OF DISTRIBUTION
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31
|
LEGAL
MATTERS
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32
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EXPERTS
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32
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WHERE
YOU CAN FIND MORE INFORMATION
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32
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INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
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32
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FORWARD-LOOKING
STATEMENTS
Certain
statements in this prospectus or the documents incorporated by reference in
herein constitute “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Senesco Technologies, Inc. to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, those set forth under the caption “Risk Factors.” The words
“believe,” “expect,” “anticipate,” “intend,” and “plan” and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance on any of these forward-looking statements, which speak only as of the
date of the statement was made. Senesco undertakes no obligation to update any
forward-looking statement.
OUR
COMPANY
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 the “
Company, “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 technology for
inhibition in human health applications to:
|
·
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develop
novel approaches to treat inflammatory and apoptotic related diseases in
humans;
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·
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develop
novel approaches to treat cancer, a group of diseases in which apoptosis
does not occur normally; and
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We believe that our gene technology
could have broad applicability in the human health field, by either inhibiting
or accelerating 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, including diabetes, diabetic retinopathy and
lung inflammation, among others.
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 performed by approximately 5 third party
researchers, at our direction, at Mayo Clinic and the University of
Waterloo.
Certain
preclinical human health results to date include:
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·
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Performing
efficacy, toxicological and dose-finding studies in mice for our potential
multiple myeloma drug candidate, SNS-01. SNS-01 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 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
(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 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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·
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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;
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·
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increased
median survival by approximately 250% in a tumor model of mice injected
with melanoma cancer cells;
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·
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induced
apoptosis in both human cancer cell lines derived from tumors and in lung
tumors in mice;
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·
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induced
apoptosis of cancer cells in a human multiple myeloma cell line in the
presence of IL-6;
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·
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measured
VEGF reduction in mouse lung tumors as a result of treatment with our
genes;
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·
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decreased
ICAM and activation of NFkB in cancer cells employing siRNA against Factor
5A;
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·
|
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.
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·
|
increased
the survival, while maintaining functionality, of mouse pancreatic islet
cells isolated for transplantation, using intraperitaneal 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
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·
|
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.
|
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. 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 to complete these objectives.
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:
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·
|
longer
shelf life of perishable produce;
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|
·
|
increased
biomass and seed yield;
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·
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greater
tolerance to environmental stresses, such as drought and soil
salinity;
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|
·
|
greater
tolerance to certain fungal and bacterial
pathogens;
|
|
·
|
more
efficient use of fertilizer;
and
|
|
·
|
advancement
to field trials in banana, lettuce, and
trees.
|
We
presently license our technology to agricultural companies capable of
incorporating our technology into crops grown for commercial agriculture. We
anticipate revenues from these relationships in the form of licensing fees and
royalties from our partners, usage fees, or sharing gross profits. In addition,
we anticipate payments from our partners upon our achievement of certain
research and development benchmarks. This commercialization strategy allows us
to generate revenues 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. We have entered into eight license agreements and one joint
collaboration with established agricultural biotechnology
companies.
Our
executive offices are located at 303 George Street, Suite 420, New
Brunswick, New Jersey 08901, our telephone number is (732) 296-8400 and our
Internet address is http://www.senesco.com. The information on our
Internet website is not incorporated by reference in this prospectus, and our
website address is included in this prospectus as a textual reference
only.
RECENT
APRIL 2010 FINANCING
Summary
of the Offering
On March
26, 2010, the Company entered into two Purchase Agreements, referred to herein
as the Non-Affiliate Purchase Agreements, between the Company and certain
non-affiliated investors who are a party thereto, referred to herein as the
Non-Affiliated Investors. The Company also entered into a Purchase Agreement
with certain affilates of the Company referred to herein as the Affiliated
Investors, and the Affilate Purchase Agreement. Collectively the
Non-Affiliate Purchase Agreements shall be referred to herein as the Purchase
Agreements and collectively the Non-Affiliated Investors shall be referred to
herein as the Investors. The respective Purchase Agreements contain
substantially similar terms.
Pursuant
to the Non-Affiliate Purchase Agreements, the Company agreed to issue to the
Non-Affiliated Purchasers, in a private placement, an aggregate of approximately
10,297 shares of the Company’s 10% Series A Convertible Preferred Stock, par
value $0.01 per share, initially convertible into approximately 32,178,125
shares of the Company’s common stock, par value $0.01 per share, and (ii)
immediately exercisable warrants to purchase up to approximately 32,178,125
shares of common stock for an aggregate offering price of approximately
$10,297,000.
We expect
to use the net proceeds from the transaction for general corporate
purposes.
In
connection with the offering, the Company solicited shareholder approval of (i)
the ability of the Investors to convert the securities into common stock, which
in the aggregate exceed 20% of our currently outstanding shares of common stock
and (ii) the issuance of the securities to certain Affiliated Investors
pursuant to the terms and conditions of an Affiliate Purchase Agreement at
a stockholders’ meeting to be held as soon as possible, referred to herein as
the Shareholders’ Meeting.
At a
special meeting of stockholders held on May 25, 2010, the stockholders approved
the transaction.
The
Company closed on the offering with the Non-Affiliate Purchasers on
April 1, 2010 and, closed on the offering with the Affiliate
Purchasers on June 2, 2010.
Warrants
Pursuant
to the Purchase Agreements, the Company agreed to deliver each of a Series A
Warrant to the Non-Affiliate Investors as well as certain Placement Agent
Warrants, referred to herein as the Warrants. Each Warrant has an
initial exercise price of $0.35 per share of common stock. The Warrants are
immediately exercisable and have a five (5) year term. The Warrants were subject
to a 19.99% blocker provision to comply with NYSE Amex Rules, which provisions
expired upon the stockholders approving the Offering at the Stockholders’
Meeting. The Warrants also contain an provision which limits the
holders beneficial ownership to a maximum of 4.99% (which percentage may be
increased to 9.99% upon sixty (60) days notice to the Company). Upon the
occurrence of certain dilutive events the number of shares underlying the
Warrants may be increased.
Registration Rights
Agreement
The
Company also entered into a Registration Rights Agreement dated as of March 26,
2010, by and among the Company and the Non-Affiliate Investors, referred to
herein as the Registration Rights Agreement. Pursuant to the Registration Rights
Agreement, the Company has filed a registration statement, also referred to
herein as the Registration Statement, with the Securities and Exchange
Commission to register the shares of common stock issuable upon conversion
or exercise of the shares of Series A Preferred Stock and the Warrants, as the
case may be, also referred to herein as the Underlying Shares. The Company must
file additional registration statements until all of the securities may be sold
pursuant to an effective registration statement or the securities become
eligible for sale under Rule 144 of the Securities Act.
Certificates of
Designations
O
n March
31, 2010 the Company filed a Certificate of Designations designating 10% Series
A Convertible Preferred Stock, referred to herein as the Certificate of
Designations, to its Amended and Restated Articles of Incorporation, as amended,
referred to herein as the Articles of Incorporation, with the Secretary of State
of the State of Delaware, establishing the preferred stock. The preferred stock
does not have any voting rights. Each share of preferred stock has a
stated value of $1,000, referred to herein as the Stated Value. Each holder of
shares of preferred stock is entitled to receive semi-annually dividends at the
rate of 10% per annum of the Stated Value for each share of preferred stock held
by such holder. Except in limited circumstances, the Company can elect to pay
the dividends in cash or shares of Common Stock. Each share of
preferred stock is entitled to a liquidation preference equal to the Stated
Value plus any accrued and unpaid dividends. The shares of preferred stock are
convertible into shares of common stock at an initial conversion price of $0.32
per share, which price may be adjusted upon the occurrence of certain dilutive
events, and are convertible at any time, provided that in the conversion of
shares of preferred stock into shares of Common Stock is subject to a 19.99%
blocker provision, which provision expired upon the stockholders approving
the offering at the Stockholders’ Meeting. The preferred stock is
also subject to a provision which limits the holders’ beneficial ownership to a
maximum of 4.99% (which percentage may be increased to 9.99% upon sixty (60)
days notice to the Company). In addition, until the earlier of (i) the earlier
of (A) seventy-five (75) days after the date the Company’s registration
statement is declared effective or (B) nine (9) months after the closing date,
or (ii) as long as less than twenty percent (20%) of the shares of preferred
stock originally issued hereunder are outstanding, unless otherwise agreed to by
a certain percentage of the holders of preferred stock, the Company may not (1)
except in limited circumstances, enter into, create, incur assume, guarantee or
suffer to exist any indebtedness for borrowed money, (2) except in limited
circumstances, enter into, create, incur assume, guarantee or suffer to exist
any liens, (3) except in connection with the issuance of the preferred stock,
amend its charter documents in a manner that materially adversely effects the
rights of any holder of preferred stock, (4) except in limited circumstances
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a
de
minimis
number of
shares of its common stock, (5) pay cash dividends or distributions on
securities which are junior to the preferred stock or (5) enter into any
transaction with an affiliate of the Company which is not at an arms-length
basis or approved by a disinterested majority of the board. In
addition, upon the occurrence of certain events, the holders of preferred stock
may redeem all of their preferred stock. Such events include
(1) if the Company fails to deliver certificates representing issuable upon a
conversion hereunder prior to the tenth business day after such shares are
required to be delivered, (2) the Company fails to pay in full the amount of
cash due pursuant to a buy-in or other event within ten (10) business days, (3)
the Company fails to have available a sufficient number of authorized and
unreserved shares of Common Stock to issue to an Investor upon a conversion of
the preferred stock, (4) the Company materially breaches a term in a document
underlying the transaction which is not cured within thirty (30) days, (4) the
Company redeems more than a
de
minimis
number of
securities which are junior to the preferred stock , (5) there occurs a change
in control transaction or bankruptcy event or (6) the Common Stock shall fail to
be listed or quoted for trading on a stock market for more than five (5) trading
days. Each holder of preferred stock also has the right to
participate in future financings of the Company. In the event a
holder converts their preferred stock prior to March 26, 2013, we must also pay
to the holder so converted cash, or at our option, in duly authorized, validly
issued, fully paid and non-assessable shares of common stock, or a combination
thereof, with respect to the preferred stock so converted in an amount equal to
$300 per $1,000 of Stated Value of the preferred stock, less the amount of any
dividend paid on such preferred stock before the date of
conversion
.
The
following table illustrates the value of our common stock underlying the
preferred stock and potential discount to market price that the selling
securityholders may receive.
Market
Price(1)
|
|
|
Conversion
Price(2)
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|
|
Total Shares
Underlying
Preferred Stock
(3)
|
|
|
Total Value of
Shares at
Market
Price(4)
|
|
|
Total Value of
Shares at
Conversion
Price(5)
|
|
|
Total Possible
Discount to
Market
Price(6)
|
|
$
|
0.386
|
|
|
$
|
0.32
|
|
|
|
32,178,125
|
|
|
$
|
12,420,756
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|
|
$
|
10,297,000
|
|
|
$
|
2,123,756
|
|
(1) Market
price per share of our common stock on March 25, 2010 (the closing price prior
to the signing of the definitive agreements).
(2) The
conversion price of the preferred stock.
(3) Total
number of shares of common stock underlying the preferred stock assuming full
conversion at the fixed conversion price.
(4) Total
market value of shares of common stock underlying the preferred stock assuming
full conversion of the preferred stock and based on the market price of the
common stock on March 25, 2010.
(5) Total
value of shares of common stock underlying the preferred stock assuming full
conversion of the preferred stock and based on the conversion
price.
(6) Discount
to market price calculated by subtracting the result in footnote (5) from the
result in footnote (4).
The
following table illustrates the value of warrants assuming the selling
securityholders exercise them on a cash basis.
Market Price (1)
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|
|
Exercise
Price (2)
|
|
|
Total Shares
Underlying the
Warrants(3)
|
|
|
Total Value of
Shares at
Market
Price(4)
|
|
|
Total Value of
Shares at
Exercise
Price(5)
|
|
|
Total Possible
Discount to
Market
Price(6)
|
|
$
|
0.386
|
|
|
$
|
0.35
|
|
|
|
33,257,813
|
|
|
$
|
12,837,516
|
|
|
$
|
11,623,828
|
|
|
$
|
1,213,688
|
|
(1) Market
price per share of our common stock on March 25, 2010.
(2) Exercise
price per share of our common stock.
(3) Total
number of shares of common stock underlying the warrants assuming full
conversion of the warrants.
(4) Total
market value of the shares of common stock underlying the warrants assuming full
exercise of the warrants based on the market price of the common stock on March
25, 2010.
(5) Total
value of shares of common stock underlying the warrants assuming full exercise
of the warrants based on the exercise price.
(6) Discount
to market price calculated by subtracting the result in footnote (5) from the
result in footnote (4).
The
following table summarizes the potential profit that the selling securityholders
may achieve from the preferred stock and warrants. For purposes of the
table, we have assumed the full amount of the stated value of the preferred
stock is converted at the conversion price ($0.32) and full exercise of the
warrants. We also have given the potential profit calculations assuming
different price levels of the common stock of the company. The first,
third and fourth market prices were arbitrarily selected based on the recent
trading history of the common stock.
Market Price
|
|
|
Total Possible Profit
on Preferred Stock
|
|
|
Total Possible
Profit on Warrant Shares
|
|
|
Total
|
|
$
|
0.40
|
|
|
$
|
2,574,250
|
|
|
$
|
1,662,890
|
|
|
$
|
4,237,140
|
|
$
|
0.50
|
|
|
$
|
5,792,063
|
|
|
$
|
4,988,672
|
|
|
$
|
10,780,735
|
|
$
|
0.60
|
|
|
$
|
9,009,875
|
|
|
$
|
8,314,453
|
|
|
$
|
17,324,328
|
|
The
following table summarizes the potential payments we may be required to pay to
the selling securityholders. For purposes of this table, we have assumed that
the preferred stock was issued and sold by the Company to the selling
securityholders on April 1, 2010, but the selling securityholders held the
preferred stock for three years. The table reflects all the payments
of interest and premiums due on the preferred stock and warrants.
Maximum
Interest
Payments (1)
|
|
|
Maximum Make Whole
Payments(2)
|
|
|
Total Maximum
Payments(3)
|
|
|
Total Net
Proceeds to
Company(4)
|
|
$
|
3,089,100
|
|
|
$
|
3,089,100
|
|
|
$
|
3,089,100
|
|
|
$
|
6,510,900
|
|
(1) Maximum
amount of interest that can accrue assuming all the preferred stock remain
outstanding for a period of three years. We may pay accrued interest in either
cash or, at our option, in shares of our common stock.
(2) In
the event a holder converts their preferred stock prior to March 26, 2013, we
must also pay to the holder so converted cash, or at our option, in duly
authorized, validly issued, fully paid and non-assessable shares of common
stock, or a combination thereof, with respect to the preferred stock so
converted in an amount equal to $300 per $1,000 of stated value of the preferred
stock, less the amount of any dividend paid on such preferred stock before the
date of conversion.
(3)
Total
maximum payments that we may be required to make for the term of the preferred
stock and assuming that we made all of the payments described in footnotes
(1) or (2).
(4)
Total net
proceeds to us assuming that we are required to make any payments as
described in footnotes (1) or (2).
Total
Potential Profit from Other Securities
The
following table shows the total potential profit that a selling stockholder may
realize at the closing price of our common stock at the time of sale of other
securities of Senesco which are held by the selling stockholder which were
acquired by such selling stockholder in transactions other than the current
offering.
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
Conversion
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
|
Price of
|
|
|
|
|
|
|
|
|
|
|
|
Upon
|
|
|
|
Shares Issued
|
|
Total
|
|
|
|
|
|
|
|
|
|
Conversion
|
|
Total Market
|
|
Upon
|
|
Discount
|
|
Selling
|
|
Date of
|
|
Market Price
|
|
Exercise
|
|
or
|
|
Price of
|
|
Conversion
|
|
(Premium)
|
|
Shareholder
|
|
Issuance
|
|
Per Share
(1)
|
|
Price
(2)
|
|
Exercise
(3)
|
|
Securities
(4)
|
|
or Exercise
(5)
|
|
to Market
(6)
|
|
Michael
Berry
|
|
10/10/2006
|
|
$
|
1.07
|
|
$
|
1.18
|
|
|
22,075
|
|
$
|
23,620
|
|
$
|
26,049
|
|
$
|
(2,429
|
)
|
Dhananjaya
Dvivedi
|
|
10/10/2006
|
|
$
|
1.07
|
|
$
|
1.18
|
|
|
110,376
|
|
$
|
118,102
|
|
$
|
130,244
|
|
$
|
(12,142
|
)
|
Iroquois
Master Trust Ltd.
|
|
10/10/2006
|
|
$
|
1.07
|
|
$
|
1.18
|
|
|
66,225
|
|
$
|
70,861
|
|
$
|
78,146
|
|
$
|
(7,285
|
)
|
Partlet
Holdings Limited
|
|
7/09/2009
|
|
$
|
0.72
|
|
$
|
0.60
|
|
|
2,055,556
|
|
$
|
1,480,000
|
|
$
|
1,233,333
|
|
$
|
246,667
|
|
Michael
Berry
|
|
1/03/2005
|
|
$
|
3.50
|
|
$
|
7.00
|
|
|
10,000
|
|
$
|
35,000
|
|
$
|
70,000
|
|
$
|
(35,000
|
)
|
(1)
|
Represents
the closing price per share of the underlying securities on the day
immediately preceding the issuance.
|
(2)
|
Represents
the conversion/exercise price per share as of the date of the sale of such
other security.
|
(3)
|
Represents
the total possible shares to be received assuming complete
conversion/exercise.
|
(4)
|
Represents
the combined market price of the total number of underlying shares. Such
price was calculated by multiplying the market price per share on the date
of the sale of that other security by the total possible shares to be
received.
|
(5)
|
Represents
the total possible shares to be received and the combined conversion price
of the total number of shares underlying such other security. Such price
was calculated by multiplying the conversion price on the date of the sale
of that other security and the total possible number of underlying shares.
|
(6)
|
Represents
the total possible loss/discount to the market price as of the date of the
sale of that other security. Such price was calculated by subtracting the
total conversion/exercise price on the date of the sale of such other
security from the combined market price of the total number of underlying
shares on that date.
|
Comparison
of Issuer Proceeds to Potential Investor Profit
The
following table shows a comparison of the proceeds to us as a result of the
current offering as well as the potential future proceeds to us as a result of
the exercise of securities currently held by the selling stockholders, which
such securities were acquired by the selling stockholders in the current or
prior offerings.
|
|
|
Potential
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
Payments by
|
|
|
Net Proceeds
|
|
|
Stock Price
|
|
|
Potential Profit
|
|
|
|
|
|
Average
|
|
Proceeds to
|
|
|
the
|
|
|
to the
|
|
|
on the date
|
|
|
to the Selling
|
|
|
Percentage
|
|
|
Percentage
|
|
the Company
|
|
|
Company
(1)
|
|
|
Company
|
|
|
of Issuance
|
|
|
Stockholders
(2)
|
|
|
of Profit
(3)
|
|
|
of Profit
(4)
|
|
$
|
21,937,235
|
|
|
$
|
3,089,100
|
|
|
$
|
18,848,135
|
|
|
$
|
0.42
|
|
|
$
|
7,612,672
|
|
|
|
35
|
%
|
|
|
7
|
%
|
(1)
|
Represents
all payments that have been made or that may be required to be made by the
issuer to the selling stockholders or affiliates of the selling
stockholders.
|
(2)
|
Represents
the combined total possible profit to be realized as a result of any
conversion discounts regarding the securities underlying the preferred
stock, warrants and any other warrants, options, notes, or other
securities of the issuer that are held by the selling shareholders or any
affiliates of the selling shareholder.
|
(3)
|
Represents
the total amount of all possible payments and the total possible discount
to the market price of the shares underlying the preferred stock and
warrants divided by the net proceeds to the issuer from the sale of the
preferred stock and warrants.
|
(4)
|
Represents
the amount of that percentage set forth in (3) averaged over the term of
the preferred stock and warrants.
|
Prior
Transactions between the Issuer and the Selling Shareholders
The
following tables disclosure prior securities transactions between us and the
selling shareholders, any affiliates of the selling shareholders, or any person
with whom any selling shareholder has a contractual relationship regarding the
transaction (or any predecessors of those persons).
|
|
|
|
|
|
|
|
Total Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number
|
|
of Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Shares held
|
|
Issued and
|
|
|
|
|
|
|
|
|
|
|
|
Total Number
|
|
by Non-
|
|
Issuable to the
|
|
|
|
Market Price
|
|
Current
|
|
|
|
|
|
of Shares
|
|
Affiliates of the
|
|
Selling
|
|
Shares as a
|
|
Per Share
|
|
Market
|
|
|
|
|
|
Outstanding
|
|
Company Prior
|
|
Stockholder in
|
|
Percentage
|
|
Immediately
|
|
Price
|
|
Selling
Shareholder
|
|
Date of
Transaction
|
|
Prior to the
Transaction
(1)
|
|
to the
Transaction
(2)
|
|
the
Transaction
(3)
|
|
of Non-
Affiliates
(4)
|
|
Prior to the
Transaction
(5)
|
|
Per
Share
(6)
|
|
Wm. Michael Phippen
|
|
1/15/2004
|
|
|
12,027,179
|
|
8,942,708
|
|
|
94,937
|
|
1.06
|
%
|
$
|
3.31
|
|
$
|
0.51
|
|
Iroquois Master Fund Ltd.
|
|
5/9/2005
|
|
|
13,871,737
|
|
9,027,574
|
|
|
426,540
|
|
4.72
|
%
|
$
|
2.46
|
|
$
|
0.51
|
|
Dhananjaya Dvivedi
|
|
10/10/2006
|
|
|
15,487,388
|
|
12,235,125
|
|
|
331,128
|
|
2.71
|
%
|
$
|
1.07
|
|
$
|
0.51
|
|
Iroquois Master Fund Ltd.
|
|
10/10/2006
|
|
|
15,487,388
|
|
12,235,125
|
|
|
198,675
|
|
1.62
|
%
|
$
|
1.07
|
|
$
|
0.51
|
|
Michael Berry
|
|
10/10/2006
|
|
|
15,487,388
|
|
12,235,125
|
|
|
66,225
|
|
0.54
|
%
|
$
|
1.07
|
|
$
|
0.51
|
|
|
|
011/03/2005
|
|
|
13,809,750
|
|
8,965,587
|
|
|
10,000
|
|
0.11
|
%
|
$
|
3.50
|
|
$
|
0.51
|
|
Partlet Holdings Limited
|
|
7/09/2009
|
|
|
19,812,043
|
|
13,808,793
|
|
|
3,166,667
|
|
22.93
|
%
|
$
|
0.72
|
|
$
|
0.51
|
|
(1)
|
Represents
the number of shares of the class of securities subject to the transaction
that were outstanding prior to the transaction.
|
(2)
|
Represents
the number of shares of the class of securities subject to the transaction
that were outstanding prior to the transaction and held by persons other
than the selling shareholders, affiliates of the company, or affiliates of
the selling shareholders. This calculation excludes any shares held by the
Selling Security Holder in the denominator.
|
(3)
|
Represents
the number of shares of the class of securities subject to the transaction
that were issued or issuable in connection with the transaction.
|
(4)
|
Represents
the percentage of total issued and outstanding securities that were issued
or issuable in the transaction (assuming full issuance), with the
percentage calculated by taking the number of shares issued and
outstanding prior to the applicable transaction and held by persons other
than the selling shareholders, affiliates of the company, or affiliates of
the selling shareholders, and dividing that number by the number of shares
issued or issuable in connection with the applicable transaction.
|
(5)
|
Represents
the market price per share of the class of securities subject to the
transaction immediately prior to the transaction.
|
(6)
|
Represents
the current market price per share of the class of securities on June 16,
2010.
|
THE
OFFERING
All of
the securities being offered hereby are being offered for resale by the selling
securityholders listed in the “Selling Securityholders” section of this
prospectus, which commences on page 24. We will not receive any
of the proceeds from the sale of the offered shares by the selling
securityholders, but we will receive proceeds from any cash exercises of the
April 2010 warrants pursuant to which certain of the offered shares are
issuable. See “Use of Proceeds.”
RISK
FACTORS
Any
investment in shares of our common stock involves a high degree of risk. You
should consider carefully the following information about these risks, together
with all the other information contained in, or incorporated by reference into,
this prospectus, including our financial statements and related notes, before
you decide to purchase shares of our common stock. If any of the following risks
actually occurs, our business, financial condition, operating results and future
growth prospects could be materially and adversely affected. Additional risks
and uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our financial condition. Any
adverse effect on our business, financial condition or operating results could
result in a decline in the trading price of our common stock and your loss of
all or part of your investment.
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 $38,395,328 at March 31, 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.
Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern.
In their
audit opinion issued in connection with our consolidated balance sheet as of
June 30, 2009 and our related consolidated statements of operations,
stockholders’ equity, and cash flows for the year then ended, our auditors have
expressed substantial doubt about our ability to continue as a going concern
given our recurring net losses, negative cash flows from operations, planned
spending levels and the limited amount of funds on our balance
sheet. We have prepared our financial statements on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. The
consolidated financial statements do not include any adjustments that might be
necessary should we be unable to continue in existence.
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.
As a
result, 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:
|
·
|
delay, scale-back or eliminate
some or all of our research and product development
programs;
|
|
·
|
license third parties to develop
and commercialize products or technologies that we would otherwise seek to
develop and commercialize
ourselves;
|
|
·
|
seek strategic alliances or
business combinations;
|
|
·
|
attempt to sell our
company;
|
We
believe that at the projected rate of spending and with the proceeds we
received from a private placement of
convertible preferred stock and warrants on April 1, 2010 and June 2, 2010,
we should have sufficient cash to maintain our present operations for at
least the next twelve (12) monthls.
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 and with our commercial partners. At this time, we
do not have the internal capabilities to perform our 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 March 31, 2010, we had cash of $39,707 and a working
capital deficit of $2,816,931. On April 1, 2010 and June 2, 2010, we
received net proceeds of approximately $10,800,000 from the private placement of
convertible preferred stock and warrants. Using our available reserves as
of
March 31,
2010 and the net proceeds from the private placement of convertible
preferred stock and warrants,
we believe that we can operate according to
our current business plan for at least the next twelve (12) monthls.
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:
|
·
|
delay, scale back or eliminate
some or all of our research and development
programs;
|
|
·
|
provide a license to third
parties to develop and commercialize our technology that we would
otherwise seek to develop and commercialize
ourselves;
|
|
·
|
seek strategic alliances or
business combinations;
|
|
·
|
attempt to sell our
company;
|
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 notes into common stock, as
of March 31, 2010, we had 34,587,552 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.
On April
1, 2010 and June 2, 2010, we closed on a private placement of convertible
preferred stock and warrants. On May 25, 2010, our shareholders approved
this financing and the increase of our authorized shares of common stock from
120,000,000 to 250,000,000. After giving effect for the private placement and
the increase in authorized shares of common stock, we have 63,245,280 shares of
common stock authorized but unissed 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:
|
·
|
the scope of our research and
development;
|
|
·
|
our ability to attract business
partners willing to share in our development
costs;
|
|
·
|
our ability to successfully
commercialize our
technology;
|
|
·
|
competing technological and
market developments;
|
|
·
|
our ability to enter into
collaborative arrangements for the development, regulatory approval and
commercialization of other products;
and
|
|
·
|
the cost of filing, prosecuting,
defending and enforcing patent claims and other intellectual property
rights.
|
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:
|
·
|
our ability to obtain patent
protection for our technologies and
processes;
|
|
·
|
our ability to preserve our trade
secrets; and
|
|
·
|
our ability to operate without
infringing the proprietary rights of other parties both in the United
States and in foreign
countries.
|
As
of March 31, 2010, we have been issued twenty two (22) patents by the PTO
and thirty-nine (39) 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:
|
·
|
our patent applications will
result in the issuance of
patents;
|
|
·
|
any patents issued or licensed to
us will be free from challenge and if challenged, would be held to be
valid;
|
|
·
|
any patents issued or licensed to
us will provide commercially significant protection for our technology,
products and processes;
|
|
·
|
other companies will not
independently develop substantially equivalent proprietary information
which is not covered by our patent
rights;
|
|
·
|
other companies will not obtain
access to our know-how;
|
|
·
|
other companies will not be
granted patents that may prevent the commercialization of our technology;
or
|
|
·
|
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.
|
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 prohibits 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:
|
·
|
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;
|
|
·
|
the EPA regulates activity
related to the invention of plant pesticides and herbicides, which may
include certain kinds of transgenic plants;
and
|
|
·
|
the FDA regulates foods derived
from new plant varieties.
|
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 clinical trials that have not yet
begun.
It may
take several years to complete the clinical trials of a product, and a 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
|
|
·
|
the
cost of our clinical trials may be greater than we currently
anticipate.
|
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;
|
|
·
|
negotiating
acceptable clinical trial agreement terms with prospective trial
sites;
|
|
·
|
obtaining institutional review
board approval to conduct a clinical trial at a prospective
site;
|
|
·
|
recruiting qualified subjects to
participate in clinical
trials;
|
|
·
|
competition in recruiting
clinical investigators;
|
|
·
|
shortage or lack of availability
of supplies of drugs for clinical
trials;
|
|
·
|
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
|
|
·
|
exposure of clinical trial
subjects to unexpected and unacceptable health risks or noncompliance with
regulatory requirements, which may result in suspension of the
trial
|
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.
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 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;
|
|
·
|
ineffectiveness
of the product candidate;
|
|
·
|
negative
or inconclusive results from the clinical trials, or results that
necessitate additional studies or clinical
trials;
|
|
·
|
delays
in obtaining or maintaining required approvals from institutions, review
boards or other reviewing entities at clinical
sites;
|
|
·
|
delays
in patient enrollment; or
|
|
·
|
insufficient
funding or a reprioritization of financial or other
resources.
|
Any
failure or substantial delay in successfully completing clinical trials and
obtaining regulatory approval for our product candidates could severely harm our
business.
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. 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 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 it 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 March 31, 2010, our executive officers, directors and affiliated
entities together beneficially own approximately 41.6% 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 March
31, 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. Stanford is one such major stockholder of Senesco.
In
February 2009, the SEC filed a civil lawsuit accusing certain executives of
Stanford of fraud and Stanford’s assets were subsequently placed in
receivership. It is unclear at this point, what impact, if any, the
ongoing investigation of Stanford may have on us.
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 March 31, 2010, we had 33,584,121 shares of our common stock issued
and outstanding, of which approximately 1,986,306 shares are registered pursuant
to a registration statement on Form S-3 and 31,597,815 of which are either
eligible to be sold under SEC Rule 144 or are in the public float. In
addition, we have registered 2,632,194 shares of our common stock underlying
warrants previously issued on the Form S-3 registration statement and we
registered 6,137,200 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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·
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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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·
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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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·
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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.
|
For
example, during the quarter ended March 31, 2010, our common stock traded
between $0.25 per share and $0.51 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 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 March 31, 2010, we have outstanding warrants to purchase 19,130,793
shares of our common stock. In addition, as of March 31, 2010, we
have reserved 10,212,884 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. Subsequent to
March 31, 2010, we issued additional warrants to purchase 33,257,813 of our
common stock and increased the shares reserved for issuance upon the exercise of
options granted or available to be granted pursuant to our stock option plan by
5,000,000 shares. 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 certain warrants
are also subject to certain anti-dilution adjustments.
We may
also need to issue additional shares as a result of anti-dilution provisions
related to the convertible preferred stock.
USE
OF PROCEEDS
We will
not receive any proceeds from the sale of offered shares by the selling
securityholders named in this prospectus. Any proceeds we receive from any
exercise of the April 2010 warrants, pursuant to which some of the offered
shares are issuable, will be used by us for working capital and other general
corporate purposes.
We received
gross proceeds of $11,497,000 (and net proceeds of approximately $10,800,000
after deducting commissions and estimated expenses).
We have
agreed to pay certain expenses in connection with the registration of the
securities offered by the selling securityholders for resale pursuant to this
prospectus.
Intention
and Ability to Make All Payments and the Presence or Absence of Short Selling by
the Shareholder
At the
time of entering into the Securities Purchase Agreements, it was our intention,
based on a reasonable belief, that we would have the financial ability to make
all payments on the overlying securities. Specifically, at our option, we may
pay any dividends which we may owe on the Preferred Stock in shares
of our common stock. We anticipate that, in the event we determine not to
pay any of the dividends in cash, that we will, accordingly, pay such dividends
in shares of common stock. Further, the Securities are each convertible into
shares of common stock and, accordingly, do not require us to deliver a cash
payment upon conversion. On May 25, 2010 our stockholders approved an amendment
to our Certificate of Incorporation to increase the number of authorized shares
of common stock to 250,000,000. We have, accordingly, reserved for issuance such
number of shares of common stock in the event all of the Securities are
converted.
Pursuant
to Section 3.1(g) of the Securities Purchase Agreements, the selling
stockholders represented that at the time of execution of such Securities
Purchase Agreements that such selling stockholder had not entered into any short
sales. We are not otherwise aware whether the selling shareholder has an
existing short position in our common stock.
SELLING
SECURITYHOLDERS
Based on
information provided by the selling securityholders, the table below sets forth
certain information, as of June 16, 2010 unless otherwise noted, regarding the
selling securityholders.
The
shares being offered by the selling securityholders as set forth in the table
below are comprised of (a) shares of common stock issuable upon conversion
and/or redemption of their shares of Series A preferred stock, referred to
below as “offered conversion shares” and (b) shares of common stock
issuable upon exercise of their April 2010 warrants, referred to below as
“offered warrant shares.”
Percentage
ownership of common stock is based on 39,993,979 shares of our common stock
outstanding as of June 16, 2010. In addition, the table below assumes for
calculating each selling securityholder’s beneficial ownership, both prior to
and after this offering, as well as each such selling securityholder’s
percentage ownership following this offering, that options, warrants and
convertible securities held by such securityholder, if any, that are
exercisable or convertible within 60 days as of June 16, 2010 have
been exercised or converted and the shares underlying them added to the number
of shares of our common stock deemed to be outstanding. The calculation of each
selling securityholder’s beneficial ownership and percentage ownership following
this offering also assumes that all future dividend sharesincluded in those that
may be offered by such selling securityholder (but not, unless otherwise noted,
those that may be offered by any other selling securityholder) were issued and
added to the number of shares of our common stock deemed to be outstanding.
|
|
Number of
|
|
Percentage
of
|
|
|
|
|
|
|
|
|
|
shares of
|
|
shares of
|
|
|
|
|
|
|
|
|
|
|
|
|
common
|
|
common
|
|
|
Number
|
|
|
Common stock
|
|
|
|
stock
|
|
stock
|
|
|
of
|
|
|
Beneficially owned after
|
|
|
|
beneficially
|
|
beneficially
|
|
|
offered
|
|
|
the offering
|
|
|
|
owned
|
|
owned
|
|
|
shares
|
|
|
|
|
|
Percentage
|
|
|
|
prior
|
|
prior
|
|
|
being
|
|
|
Number
|
|
|
of
|
|
|
|
to the
|
|
to the
|
|
|
offered
|
|
|
of
|
|
|
outstanding
|
|
Name of selling securityholder
|
|
offering
|
|
offering
|
|
|
(1)
|
|
|
Shares
|
|
|
shares (2)
|
|
Marlin
Capital Marketing LLC (3)
|
|
|
-
|
|
-
|
|
|
1,562,500
|
|
|
|
1,562,500
|
|
|
|
2.0
|
%
|
Linden
Growth Partners Master Fund, L.P. (4)
|
|
|
-
|
|
-
|
|
|
1,093,750
|
|
|
|
1,093,750
|
|
|
|
1.4
|
%
|
Whalehaven
Capital Fund Ltd (5)
|
|
|
-
|
|
-
|
|
|
2,500,000
|
|
|
|
2,500,000
|
|
|
|
3.2
|
%
|
MOG
Capital, LLC (6)
|
|
|
-
|
|
-
|
|
|
3,125,000
|
|
|
|
3,125,000
|
|
|
|
4.0
|
%
|
Iroquois
Master Fund Ltd (7)
|
|
|
208,405
|
|
*
|
|
|
3,125,000
|
|
|
|
3,333,405
|
|
|
|
4.3
|
%
|
Anson
Investments Master Fund, LP (8)
|
|
|
-
|
|
-
|
|
|
625,000
|
|
|
|
625,000
|
|
|
|
*
|
|
Midsummer
Ventures, LP (9)
|
|
|
-
|
|
-
|
|
|
1,562,500
|
|
|
|
1,562,500
|
|
|
|
2.0
|
%
|
Hudson
Bay Fund LP (10)
|
|
|
-
|
|
-
|
|
|
1,281,250
|
|
|
|
1,281,250
|
|
|
|
1.7
|
%
|
Hudson
Bay Overseas Fund, Ltd (11)
|
|
|
-
|
|
-
|
|
|
1,843,750
|
|
|
|
1,843,750
|
|
|
|
2.4
|
%
|
The
Hewlett Fund (12)
|
|
|
-
|
|
-
|
|
|
1,562,500
|
|
|
|
1,562,500
|
|
|
|
2.0
|
%
|
Alpha
Capital Anstalt (13)
|
|
|
-
|
|
-
|
|
|
4,687,500
|
|
|
|
4,687,500
|
|
|
|
6.0
|
%
|
Perceptive
Life Sciences Master Fund, L.P. (14)
|
|
|
-
|
|
-
|
|
|
6,250,000
|
|
|
|
6,250,000
|
|
|
|
7.9
|
%
|
Chestnut
Ridge Partners, LP (15)
|
|
|
-
|
|
-
|
|
|
1,562,500
|
|
|
|
1,562,500
|
|
|
|
2.0
|
%
|
Brio
Capital L.P.(16)
|
|
|
-
|
|
-
|
|
|
1,406,250
|
|
|
|
1,406,250
|
|
|
|
1.8
|
%
|
Next
View Capital, LP (17)
|
|
|
-
|
|
-
|
|
|
1,875,000
|
|
|
|
1,875,000
|
|
|
|
2.4
|
%
|
Pacific
Capital Management, LLC (18)
|
|
|
-
|
|
-
|
|
|
3,125,000
|
|
|
|
3,125,000
|
|
|
|
4.0
|
%
|
Joaquin
B. Viso
|
|
|
-
|
|
-
|
|
|
1,562,500
|
|
|
|
1,562,500
|
|
|
|
2.0
|
%
|
Paul
Klaver
|
|
|
-
|
|
-
|
|
|
1,250,000
|
|
|
|
1,250,000
|
|
|
|
1.6
|
%
|
Michael
Berry
|
|
|
95,000
|
|
*
|
|
|
937,500
|
|
|
|
1,032,500
|
|
|
|
1.4
|
%
|
Harrison
and Andree F. Nesbit
|
|
|
1,200,000
|
|
3.6
|
%
|
|
625,000
|
|
|
|
1,825,000
|
|
|
|
2.4
|
%
|
Nat
T. Harris
|
|
|
-
|
|
-
|
|
|
625,000
|
|
|
|
625,000
|
|
|
|
*
|
|
Tony
Alford
|
|
|
-
|
|
-
|
|
|
875,000
|
|
|
|
875,000
|
|
|
|
1.2
|
%
|
John
T. Boundas
|
|
|
63,700
|
|
*
|
|
|
531,250
|
|
|
|
594,950
|
|
|
|
*
|
|
Marshall
& Ilsley Trust Company N.A.
as
Trustee of Mark D. Johnson IRA
|
|
|
-
|
|
-
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
*
|
|
PTE
Investments, LLC (19)
|
|
|
-
|
|
-
|
|
|
437,500
|
|
|
|
437,500
|
|
|
|
*
|
|
Heart
1, LLC (20)
|
|
|
-
|
|
-
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
*
|
|
Michael
W. Hyder
|
|
|
10,000
|
|
*
|
|
|
218,750
|
|
|
|
228,750
|
|
|
|
*
|
|
Judith
A. Morton
|
|
|
16,000
|
|
*
|
|
|
187,500
|
|
|
|
203,500
|
|
|
|
*
|
|
Thomas
E. Williams
|
|
|
-
|
|
-
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
*
|
|
Clayton
and Delcie Napier JTWROS
|
|
|
-
|
|
-
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
*
|
|
Margaret
M. Lyle
|
|
|
-
|
|
-
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
*
|
|
|
|
Number of
|
|
Percentage
of
|
|
|
|
|
|
|
|
|
|
shares of
|
|
shares of
|
|
|
|
|
|
|
|
|
|
|
|
|
common
|
|
common
|
|
|
Number
|
|
|
Common stock
|
|
|
|
stock
|
|
stock
|
|
|
of
|
|
|
Beneficially owned after
|
|
|
|
beneficially
|
|
beneficially
|
|
|
offered
|
|
|
the offering
|
|
|
|
owned
|
|
owned
|
|
|
shares
|
|
|
|
|
|
Percentage
|
|
|
|
prior
|
|
prior
|
|
|
being
|
|
|
Number
|
|
|
of
|
|
|
|
to the
|
|
to the
|
|
|
offered
|
|
|
of
|
|
|
outstanding
|
|
Name of selling securityholder
|
|
offering
|
|
offering
|
|
|
(1)
|
|
|
Shares
|
|
|
shares (2)
|
|
Frederick
J. Lyle
|
|
|
-
|
|
-
|
|
|
218,750
|
|
|
|
218,750
|
|
|
|
*
|
|
Edward
D. Brown
|
|
|
-
|
|
-
|
|
|
156,250
|
|
|
|
156,250
|
|
|
|
*
|
|
Sheree
Frank
|
|
|
-
|
|
-
|
|
|
156,250
|
|
|
|
156,250
|
|
|
|
*
|
|
Jack
P. Kennedy
|
|
|
-
|
|
-
|
|
|
131,250
|
|
|
|
131,250
|
|
|
|
*
|
|
BMO
Nesbitt Burns ITF Wm.
Michael
Phippen
|
|
|
63,291
|
|
*
|
|
|
312,500
|
|
|
|
375,791
|
|
|
|
*
|
|
Partlet
Holdings Limited (21)
|
|
|
4,166,666
|
|
11.7
|
%
|
|
3,125,000
|
|
|
|
7,291,666
|
|
|
|
9.2
|
%
|
John
V. Winfield
|
|
|
-
|
|
-
|
|
|
1,250,000
|
|
|
|
1,250,000
|
|
|
|
1.6
|
%
|
InterGroup
Corporation (22)
|
|
|
-
|
|
-
|
|
|
937,500
|
|
|
|
937,500
|
|
|
|
1.2
|
%
|
Portsmouth
Square, Inc (22)
|
|
|
-
|
|
-
|
|
|
1,250,000
|
|
|
|
1,250,000
|
|
|
|
1.6
|
%
|
Santa
Fe Financial Corporation (22)
|
|
|
-
|
|
-
|
|
|
625,000
|
|
|
|
625,000
|
|
|
|
*
|
|
Defiance
Fund, Ltd (23)
|
|
|
524,500
|
|
1.6
|
%
|
|
3,125,000
|
|
|
|
3,649,500
|
|
|
|
4.7
|
%
|
Culross
Managed Account Platform SPF, Ltd. (24)
|
|
|
216,100
|
|
*
|
|
|
3,125,000
|
|
|
|
3,341,100
|
|
|
|
4.3
|
%
|
Northern
Rivers Innovation Fund LP (25)
|
|
|
-
|
|
-
|
|
|
2,187,500
|
|
|
|
2,187,500
|
|
|
|
2.8
|
%
|
Northern
Rivers Innovation RSP Fund (26)
|
|
|
-
|
|
-
|
|
|
312,500
|
|
|
|
312,500
|
|
|
|
*
|
|
Hugh
Charles Cleland
|
|
|
-
|
|
-
|
|
|
187,500
|
|
|
|
187,500
|
|
|
|
*
|
|
Hugh
John Charles Cleland
|
|
|
-
|
|
-
|
|
|
375,000
|
|
|
|
375,000
|
|
|
|
*
|
|
Ronald
K. Stack
|
|
|
41,500
|
|
*
|
|
|
187,500
|
|
|
|
229,000
|
|
|
|
*
|
|
Charles
T. Parker
|
|
|
35,100
|
|
*
|
|
|
200,000
|
|
|
|
235,100
|
|
|
|
*
|
|
Dhananjaya
Dvivedi
|
|
|
331,128
|
|
*
|
|
|
625,000
|
|
|
|
956,128
|
|
|
|
1.3
|
%
|
Christopher
Woodman
|
|
|
-
|
|
-
|
|
|
312,500
|
|
|
|
312,500
|
|
|
|
*
|
|
Ladenburg
Thalmann & Co. Inc. (27)
|
|
|
74,184
|
|
*
|
|
|
929,688
|
|
|
|
1,003,872
|
|
|
|
1.3
|
%
|
Midtown
Partners & Co., LLC (28)
|
|
|
22,000
|
|
*
|
|
|
150,000
|
|
|
|
172,000
|
|
|
|
*
|
|
TOTAL
|
|
|
7,067,574
|
|
|
|
|
65,435,938
|
|
|
|
72,503,512
|
|
|
|
|
|
*Less
than 1%.
|
(1)
|
Represents,
for each selling securityholder, its offered conversion shares, offered
warrant shares.
|
|
(2)
|
Pursuant
to the certificate of designation for our Series A preferred stock
and the April 2010 warrants, no holder of such securities is permitted to
convert its shares of Series A preferred stock or April 2010 warrants
to the extent that any such conversion or exercise would result in its
beneficial ownership of more than 4.99% which may be increased to 9.99%
upon notice to the Company, of our outstanding common stock after giving
effect to such conversion or
exercise.
|
|
(3)
|
Marlin
Capital Marketing is owned by Michael and Betsey Brauser, as tenants by
the entirety and GRQ Consultants. Barry Honig is the sole owner
of GRQ consultant. Barry Honig and Michael Brauser are
co-manager of Marlin Capital Marketing and share voting and investment
control over these securities. Each of Mr. Honig and Brauser
disclaims beneficial ownership over these securities. Marlin
Capital Marketing is not a broker-dealer or in any way affiliated with any
broker-dealer.
|
|
(4)
|
Linden
Capital Management IV is the general partner of Linden Growth Partners
Master Fund, L.P. and has voting and investment control over these
securities. Paul Coviello is the President of Linden Capital
Management IV. Mr Coviello disclaims beneficial ownership over
these securities. Linden Growth Partners Master Fund, L.P. is
not a broker-dealer or in any way affiliated with any broker-dealer.
|
|
(5)
|
Arthur
Jones and Trevor Williams, as Directors of Whalehaven Capital Fund Ltd.
have voting and investment control over such securities. Messers.
Mazzella, Jones and Trevor disclaim beneficial ownership over these
securities.
Whalehaven
Capital Fund Ltd. is not a broker-dealer or in any way affiliated with any
broker-dealer.
|
|
(6)
|
Alphabet
Partners, L.P. is the investment manager of MOG Capital,
LLC. Jason Adler is the managing member of Alphabet Partners,
LP. and has investment and voting control over these
securities. Mr. Adler disclaims beneficial ownership over these
securities. Alphabet Partners, L.P. is a NASD member and
received the securities in the ordinary course of business and at the time
of receiving the securities, had no agreements or understandings, directly
or indirectly, with any person to distribute
them.
|
|
(7)
|
Joshua
Silverman has voting and investment control over the shares of common
stock and warrants to purchase common stock held by Iroquois Master Fund,
Ltd. Mr. Silverman disclaims beneficial ownership over these
securities. Iroquois Master Fund, Ltd. is not a broker dealer or in any
way affiliated with any broker
dealer.
|
|
(8)
|
Frigate
Ventures, LP is the investment manager of Anson Investments Master Fund
LP, and has voting and investment control over these
securities. Bruce Winson is the managing member of Admiralty
Advisors, LLC, the general partner of Frigate Ventures,
LP. Bruce Winson disclaims beneficial ownership over these
securities. Anson Investments Master Fund, LP. is not a broker dealer or
in any way affiliated with any broker
dealer.
|
|
(9)
|
Midsummer
Capital, LLC (“Midsummer Capital”) is the investment advisor to Midsummer
Ventures, LP. By virtue of such relationship, Midsummer Capital may be
deemed to have dispositive power over the shares owned by Midsummer
Ventures, LP. Midsummer Capital disclaims beneficial ownership of such
shares. Mr. Michel Amsalem and Mr. Joshua Thomas have delegated authority
from the members of Midsummer Capital with respect to the shares of common
stock owned by Midsummer Ventures, LP. Messrs. Amsalem and Thomas may be
deemed to share dispositive power over the shares of common stock held by
Midsummer Ventures, LP. Messrs. Amsalem and Thomas disclaim beneficial
ownership of such shares of common stock, and neither person has any legal
right to maintain such delegated authority. Midsummer Ventures, LP is not
a broker dealer or in any way affiliated with any broker
dealer.
|
|
(10)
|
Hudson
Bay Capital Management, L.P., is the investment manager of Hudson Bay Fund
LP, has voting and investment power over these
securities. Sander Gerber is the managing member of Hudson Bay
Capital GB LLC, which is the general partner of Hudson Bay Capital
Management, L.P. Sander Gerber disclaims beneficial ownership
over these securities. Hudson Bay Capital Management, L.P. is
not a broker dealer or in any way affiliated with any broker
dealer.
|
|
(11)
|
Hudson
Bay Capital Management, L.P., is the investment manager of Hudson Bay
Overseas Fund Ltd., has voting and investment power over these
securities. Sander Gerber is the managing member of Hudson Bay
Capital GB LLC, which is the general partner of Hudson Bay Capital
Management, L.P. Sander Gerber disclaims beneficial ownership
over these securities. Hudson Bay Capital Management, L.P. is not a broker
dealer or in any way affiliated with any broker
dealer.
|
|
(12)
|
Martin
Chop has voting and investment control over the shares of common stock and
warrants to purchase common stock held by The Hewlett Fund. Mr.
Chop disclaims beneficial ownership over these securities. The Hewlett
Fund is not a broker dealer or in any way affiliated with any broker
dealer.
|
|
(13)
|
Konrad
Ackerman is the director of Alpha Capital Anstalt Mr. Konrad Ackerman,
Director, has voting and dispositive power over the shares held by Alpha
Capital. Mr. Ackerman may be deemed to beneficially own the shares of
Common Stock held by Alpha Capital. Mr. Ackerman disclaims beneficial
ownership of such shares.
Alpha
Capital Anstalt is not a broker dealer or in any way affiliated with any
broker dealer.
|
|
(14)
|
Perceptive
Advisores LLC, the investment manager of Perceptive Life Sciences Master
Fund, Ltd., has voting and investment power over these
securities. Joseph E. Edelman is the managing member of
Perceptive Advisors LLC. Mr. Edelman disclaims beneficial
ownership over these securities. Perceptive Life Sciences
Master Fund, L.P. is not a broker dealer or in any way affiliated with any
broker dealer.
|
|
(15)
|
Kenneth
Pasternak is the managing member of Chestnut Ridge Capital, LLC, which is
the General Partner of Chestnut Ridge Partners, LP and has voting and
investment power over these securities. Mr. Pasternak disclaims
beneficial ownership over these securities. Chestnut Ridge Partners, LP is
not a broker dealer or in any way affiliated with any broker
dealer.
|
|
(16)
|
Shaye
Hirsch has voting and investment control over the shares of common stock
and warrants to purchase common stock held by Brio Capital
LP. Mr. Hirsch disclaims beneficial ownership over these
securities. Brio Capital LP is not a broker dealer or in any way
affiliated with any broker dealer.
|
|
(17)
|
Next
View Partners LLC, the general partner of Next View Capital, LP, has
voting and investment power over these securities. Stewart
Flink is the sole manager of Next View Partners LLC. Mr. Flink
disclaims beneficial ownership over these securities. Next View Capital,
LP is not a broker dealer or in any way affiliated with any broker dealer.
|
|
(18)
|
Pacific
Capital Management, LLC ("PCM") is a Delaware limited liability
company. Its investment manager is JMG Capital Management, Inc
(the "Manager"), a California corporation that has voting and dispositive
power over PCM's' investments, including the
securities. Jonathan M. Glaser is the Executive Officer and
Director of the Manager and has sole investment discretion over PCM's
portfolio holdings. Pacific Capital Management, LLC is not a broker dealer
or in any way affiliated with any broker
dealer.
|
|
(19)
|
PTE
Investments is a limited liability company. Reginald Powell is
the managing member of PTE Investments, LLC. and has voting and investment
control over the securities. Reginald Powell disclaims
beneficial ownership of the securities. PTE Investments, LLC is not a
broker dealer or in any way affiliated with any broker
dealer.
|
|
(20)
|
The
members of Heart 1, LLC are Frederick Scruggs, Ron Lovelace, Joseph Tubbs,
James Windle, Dale Abrahames, Allen Leath, William Shumate, and Richared
Read. Mr. Scruggs has voting and investment power over these
securities. Mr. Scruggs disclaims beneficial ownership over
these securities. Heart
1
is affiliated with Mass Mutual Investor Services who is a NASD
member. Heart 1 received the securities in the ordinary course
of business and at the time of receiving the securities had no agreements
or understandings, directly or indirectly, with any person to distribute
them.
|
|
(21)
|
Partlet
Holdings Limited is a holding company of The Candor Trust. Each of Robert
M. Blackie, Julie Coward, Leitia Cummins and Frank Gee are on the Board of
Directors of Partlet Holdings Limited. While each of Robert M. Blackie,
Julie Coward, Leitia Cummins and Frank Gee have voting and investment
control over the securities, each disclaims beneficial ownership of the
securities. Partlet Holdings Limited is not a broker dealer or in any way
affiliated with any broker dealer.
|
|
(22)
|
John
V. Winfield is the Chairman, President and CEO of the InterGroup
Corporation and its subsidiaries, Portsmouth Square, Inc., and Sante Fe
Corporation. In those capacities, Mr. Winfield has voting and
investment control over the securities owned by the InterGroup
Corporation, Portsmouth Square, Inc. and Sante Fe
Corporation. Mr. Winfield disclaims beneficial ownership over
these securities. InterGroup Corporation is not a broker dealer
or in any way affiliated with any broker
dealer.
|
|
(23)
|
Defiance
Capital, LLC., is the investment manager of Defiance Fund, Ltd., has
voting and investment power over these securities. Francois
Parenteau is the managing member of Defiance Capital, LLC, and disclaims
beneficial ownership of these securities. Defiance Fund,
Ltd is not a broker dealer or in any way affiliated with any
broker dealer.
|
|
(24)
|
Culross
Global Asset Management Limited, the investment manager to the Culross
Defiance Segregated Portfolio, a segregated portfolio of Culross Managed
Account Platform SPC Limited, has voting and investment power over these
securities. Defiance Capital, LLC is the investment advisor to
Culross Global Asset Management Limited with respect to the Culross
Defiance Segregated Portfolio. Culross Managed Account Platform
SPF, Ltd. is not a broker dealer or in any way affiliated with any broker
dealer.
|
|
(25)
|
BluMont
Capital Corporation is the investment manager of Northern Rivers
Innovation Fund LP, and has voting and investment power over these
securities. Victor Koloshuk, Stephen Johnson and Veronika
Hirsch are on the Board of Directors of BluMont Capital Corporation and
each disclaims beneficial ownership over these securities. Northern Rivers
Innovation Fund LP is not a broker dealer or in any way affiliated with
any broker dealer.
|
|
(26)
|
BluMont
Capital Corporation is the investment manager of Northern Rivers
Innovation RSP Fund, and has voting and investment power over these
securities. Victor Koloshuk, Stephen Johnson and Veronika Hirsh
are on the Board of Directors of BluMont Capital Corporation and each
disclaims beneficial ownership over these securities. Northern Rivers
Innovation RSP Fund is not a broker dealer or in any way affiliated with
any broker dealer.
|
|
(27)
|
Represents
929,688 shares of common stock that may be purchased upon exercise of
presently exercisable warrants. Ladenburg Thalmann & Co.
Inc. is a NASD member and received the securities in the ordinary course
of business and at the time of receiving the securities, had no agreements
or understandings, directly or indirectly, with any person to distribute
them. Ladenburg Thalmann & Co. Inc. was entitled to receive
these securities as partial compensation for its services as placement
agent. These securities are subject to a 180-day lock-up
agreement in accordance with the requirements of FINRA Rule
5110(g)(1).
|
|
(28)
|
Represents
150,000 shares of common stock that may be purchased upon exercise of
presently exercisable warrants. Midtown Partners & Co., LLC. is a NASD
member and received the securities in the ordinary course of business and
at the time of receiving the securities, had no agreements or
understandings, directly or indirectly, with any person to distribute
them. Midtown Partners & Co., LLC was entitled to receive these
securities for its services as partial compensation for its services as
placement agent. These securities are subject to a 180-day lock-up
agreement in accordance with the requirements of FINRA Rule 5110 (g)(1).
|
We are registering 65,435,938 shares
pursuant to this registration statement, which includes all of the shares of
common stock issuable underlying securities issued in our private placement that
closed on March 25, 2010 to purchasers who are not our affiliates. Specifically,
such amount includes 32,178,125 shares of common stock which are issuable to
non-affiliates upon conversion of the preferred stock as well as 32,178,125
shares of common stock issuable upon exercise of the warrants to non-affiliates
and 1,079,688 shares of common stock issuable upon the exercise of the warrants
issued to the placement agents. Such amount does not include any dividends which
may be paid in shares of common stock to holders of the preferred stock at our
discretion.
Relationships
Between the Issuer and the Selling Shareholders
2009
Partlet Transaction
On July 9, 2009, the Company entered
into a Securities Purchase Agreement, also referred to herein as the Partlet
Securities Purchase Agreement, with Partlet Holdings Ltd., which is an
accredited investor, pursuant to which the Company issued and sold an aggregate
of 1,111,111 shares of the Company’s common stock at $0.90 per share and each of
a Series A warrant, also referred to herein as the Partlet Series A Warrant, and
a Series B warrant, also referred to herein as the Partlet Series B Warrant
(collectively the Partlet Series A Warrant and Partlet Series B Warrant shall be
referred to herein as the “Partlet Warrants”).
The Partlet Series A Warrant entitles
the holder to purchase 1,000,000 shares of the Company’s common stock at $0.01
per warrant share. The Partlet Series A Warrant has a term of seven years and is
exercisable immediately after the date of grant. The Series A Warrant was
exercised by Partlet Holdings Ltd. And the Company received net proceeds of
$10,000
The Partlet Series B Warrant entitles
the holder to purchase 2,055,555 shares of the Company’s common stock at $0.60
per warrant share. The Partlet Series B Warrant has a term of seven years and is
not exercisable until after the six-month anniversary after the date of grant.
As a result of the transaction, the
Company received gross proceeds equal to $1,010,000. A copy of each of the
Partlet Securities Purchase Agreement and Partlet Warrants were filed as
exhibits 10.1, 4.1 and 4.2 respectively to the Company’s periodic report on Form
8-K on July 10, 2009.
On January 3, 2005, the Company entered
into a one-year consulting agreement with Michael Berry, Ph.D., which was
extended for a six month term until June 30, 2006. Under the terms of the
agreement, Dr. Berry received a consulting fee of $8,000 per month and a seven
year warrant with an exercise price of $7.00. Effective July 1, 2006, the
consulting agreement was further extended through March 31, 2007 and the
consulting fee was reduced from $8,000 per month to $1,000 per month. The
consulting agreement terminated on April, 2007.
Prior
Registration Statements of the Selling Stockholders
The following table illustrates the
number of shares of the Company’s common stock registered for resale by the
Purchaser in this registration statement and in prior registration statements.
Total Number of
Shares Outstanding
Prior to the Offering
Held by Non-Affiliates
|
|
Number of Shares
Registered for
Resale by the
Selling Shareholder
in Prior
Registration
Statements
|
|
|
Number of Shares
Previously Registered
for Resale by the
Selling Shareholder
that Continue to be
Held by the Selling
Shareholder
(1)
|
|
|
Number of Shares that
have been Sold in
Registered Resale
Transactions by the
Selling Shareholder
|
|
|
Number of Shares
Registered for
Resale in this
Registration
Statement
|
|
24,077,808
|
|
1,117,505
|
|
|
526,869
|
|
|
|
416,810
|
|
|
|
65,435,938
|
|
(1)
|
Excludes
173,826 warrants that have expired without being exercised.
|
PLAN
OF DISTRIBUTION
Each
selling securityholder of the common stock and any of their pledgees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock covered hereby on the NYSE Amex or any other stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated
prices. A selling securityholder may use any one or more of the
following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
|
|
·
|
in
transactions through broker-dealers that agree with the selling
securityholder to sell a specified number of such shares at a stipulated
price per share;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
·
|
a
combination of any such methods of sale;
or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
selling securityholder may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
Broker-dealers
engaged by the selling securityholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or
discounts from the selling securityholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with FINRA Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with FINRA IM-2440.
In
connection with the sale of the common stock or interests therein, the selling
securityholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
securityholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The
selling securityholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative
securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling securityholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each selling
securityholder has informed the Company that it does not have any written or
oral agreement or understanding, directly or indirectly, with any person to
distribute the common stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent
(8%).
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to
indemnify the selling securityholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.
Because
selling securityholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. The selling
securityholders have advised us that there is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the
selling securityholders.
We agreed
to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the selling securityholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule
144, without the requirement for the Company to be in compliance with the
current public information under Rule 144 under the Securities Act or any other
rule of similar effect or (ii) all of the shares have been sold pursuant to this
prospectus or Rule 144 under the Securities Act or any other rule of similar
effect. The resale shares will be sold only through registered or
licensed brokers or dealers if required under applicable state securities laws.
In addition, in certain states, the resale shares of common stock covered hereby
may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the selling securityholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of shares of the common stock by the selling
securityholders or any other person. We will make copies of this
prospectus available to the Selling Stockholders and have informed them of the
need to deliver a copy of this prospectus to each purchaser at or prior to the
time of the sale (including by compliance with Rule 172 under the Securities
Act).
LEGAL
MATTERS
Morgan,
Lewis & Bockius LLP of Princeton, New Jersey has passed upon the validity of
the securities being offered by this prospectus.
EXPERTS
The
financial statements and schedule of Senesco Technologies, Inc. as of June 30,
2009 and 2008 and for the years then ended incorporated by, reference in this
prospectus and in the registration statement of which this prospectus forms a
part, have been audited by McGladrey & Pullen, LLP, independent registered
public accounting firm, and are incorporated herein in reliance upon the report
of McGladrey & Pullen, LLP given upon their authority as experts in
accounting and auditing.
The
financial statements for the year ended June 30, 2007 and cumulative amounts
from July 1, 1998 (inception) to June 30, 2007 incorporated in this prospectus
by reference to the Annual Report on Form 10-K for the year ended June 30, 2009,
have been so incorporated in reliance on the report of Goldstein Golub Kessler
LLP, independent public accounting firm, given on the authority of said firm as
experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We are
subject to the informational requirements of the Securities Exchange Act of 1934
and we file reports and other information with the SEC.
You may
read and copy any of the reports, statements, or other information we file with
the SEC at the SEC’s Public Reference Section at 100 F Street, N.E., Washington,
D.C. 20549 at prescribed rates. Information on the operation of the Public
Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC
maintains a Web site at http://www.sec.gov that contains reports, proxy
statements and other information regarding issuers that file electronically with
the SEC.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
We have
filed with the SEC, Washington, D.C., a registration statement on Form S-3 under
the Securities Act, covering the securities offered by this prospectus. This
prospectus does not contain all of the information that you can find in our
registration statement and the exhibits to the registration statement.
Statements contained in this prospectus as to the contents of any contract or
other document referred to are not necessarily complete and in each instance
such statement is qualified by reference to each such contract or document filed
or incorporated by reference as an exhibit to the registration
statement.
The SEC
allows us to “incorporate by reference” the information we file with them. This
means that we can disclose important information to you by referring you to
other documents that are legally considered to be part of this prospectus, and
later information that we file with the SEC will automatically update and
supersede the information in this prospectus and the documents listed below. We
incorporate by reference the documents listed below, and any future filings made
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until the selling securityholders sell all the offered
shares:
|
(a)
|
Our Annual
Report on Form 10-K, as amended and restated on Form 10-K/A, for the
fiscal year ended June 30, 2009 (Commission File No. 001-31326), filed on
September 28, 2009, with such amended and restated 10-K/A filed on October
28, 2009, pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), in which there is set forth
the audited financial statements for the Registrant’s fiscal year ended
June 30, 2009;
|
|
(b)
|
Our Quarterly
Report on Form 10-Q for each of the quarters ended September 30, 2009 and
December 31, 2009
and
March 31, 2010
;
|
|
(c)
|
Our Current
Reports on Form 8-K, filed with the Commission on July 10, 2009, July 10,
2009, July 30, 2009, November 4, 2009, November 9, 2009, November 16,
2009, November 25, 2009, January 11, 2010, January 19, 2010,
February 4, 2010, February 22, 2010, February 22, 2010, February 22, 2010,
March 4, 2010, March 5, 2010, March 29, 2010, April 5, 2010, April 8, 2010
(as amended by Form 8-K/A on April 8, 2010)
,
May 5, 2010, May 25, 2010, May 28, 2010
; and
|
|
(d)
|
Our registration
statement on Form 8-A filed with the Commission on May 14, 2002, in which
there is described the terms, rights and provisions applicable to the
Registrant’s outstanding common
stock.
|
All
reports and definitive proxy or information statements filed pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
registration statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
de-registers all securities then remaining unsold, shall be deemed to be
incorporated by reference into this registration statement and to be a part
hereof from the date of filing of such documents. Unless expressly
incorporated into this registration statement, a report furnished on Form 8-K
under the Exchange Act shall not be incorporated by reference into this
registration statement. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this registration statement to the extent that a
statement contained herein or in any subsequently filed document which also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
registration statement.
We
have not authorized anyone else to provide you with information different
from that contained or incorporated by reference in this prospectus. This
prospectus is not an offer to sell nor is it a solicitation of an offer to
buy any security in any jurisdiction where the offer or sale is not
permitted. Neither the delivery of this prospectus nor any sale made under
this prospectus shall, under any circumstances, imply that there has been
no change in our affairs since the date of this prospectus or that the
information contained in this prospectus or incorporated by reference
herein is correct as of any time subsequent to its
date.
|
|
65,435,938
shares of
common
stock
|
|
|
Senesco
Technologies, Inc.
PROSPECTUS
June
23, 2010
|
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