SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File No. 0-22307
SENESCO TECHNOLOGIES, INC.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 84-1368850
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
34 Chambers Street, Princeton, New Jersey 08542
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(Address of Principal Executive Offices) (Zip Code)
(609) 252-0680
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(Issuer's Telephone Number, Including Area Code)
Check whether the Issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes: X No:
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State the number of shares outstanding of each of the Issuer's classes of
common stock, as of March 31, 2000:
Class Number of Shares
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Common Stock, $.01 par value 6,400,926
Transitional Small Business Disclosure Format (check one):
Yes: No: X
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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TABLE OF CONTENTS
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Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.......................................... 1
CONDENSED CONSOLIDATED BALANCE SHEET as of March 31, 2000
(unaudited) and June 30, 1999.................................... 2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the
Three Months Ended March 31, 2000 and March 31, 1999, For
the Nine Months Ended March 31, 2000 and March 31, 1999 and
From Inception on July 1, 1998 through March 31, 2000
(unaudited)...................................................... 3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
From Inception on July 1, 1998 through March 31, 2000
(unaudited)...................................................... 4
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the Nine
Months Ended March 31, 2000 and March 31, 1999, and From
Inception on July 1, 1998 through March 31, 2000 (unaudited)..... 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)...................................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Plan of Operation........................................ 12
Liquidity and Capital Resources.................................. 18
Results of Operations............................................ 20
PART II OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.................... 22
Item 5. Other Information............................................ 23
Item 6. Exhibits and Reports on Form 8-K............................. 25
SIGNATURES ............................................................. 26
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PART I. FINANCIAL INFORMATION.
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Item 1. Financial Statements.
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission, although Senesco Technologies, Inc. (the
"Company") and its subsidiary, Senesco, Inc., a New Jersey corporation
("Senesco"), believe that the disclosures are adequate to assure that the
information presented is not misleading in any material respect.
The results of operations for the interim periods presented herein are not
necessarily indicative of the results to be expected for the entire fiscal year.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
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CONDENSED CONSOLIDATED BALANCE SHEET
------------------------------------
March 31, June 30,
2000 1999
----------- --------
(unaudited)
ASSETS
------
CURRENT ASSETS:
Cash......................................... $ 151,204 $ 946,691
Prepaid expense.............................. $ 28,783 $ 12,542
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Total Current Assets.................... $ 179,987 $ 959,233
Equipment, net............................... 74,284 72,274
Intangible assets, net....................... 74,702 42,383
Security deposit............................. 10,863 10,863
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TOTAL ASSETS............................ $ 339,836 $ 1,084,753
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable............................. 236,188 169,733
Accrued expenses............................. 75,202 2,854
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Total Current Liabilities............... 311,390 172,587
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Grant payable................................ 10,573 --
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TOTAL LIABILITIES....................... 321,963 172,587
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STOCKHOLDERS' EQUITY:
Preferred stock, authorized 5,000,000
shares, $0.01 par value, no shares
issued and outstanding...................... -- --
Common stock, authorized 20,000,000
shares, $0.01 par value, 6,400,926
issued and outstanding ..................... 64,008 4,659
Capital in excess of par..................... 4,246,658 2,076,502
Deficit accumulated during the
development stage........................... (2,991,223) (1,168,995)
Deferred compensation related to
issuance of options and warrants............ (1,301,570) --
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Total Stockholders' Equity.................. 17,873 912,166
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.. $ 339,836 $ 1,084,753
============== ==============
See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the Three For the Three For the Nine For the Nine July 1, 1998
Months Ended Months Ended Months Ended Months Ended through
March 31, March 31, March 31, March 31, March 31,
2000 1999 2000 1999 2000
------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue.............................. $ -- $ -- $ -- $ -- $ --
Operating Expenses:
General and administrative......... 541,727 275,305 1,339,722 546,964 2,322,119
Research and development........... 285,650 142,922 482,459 151,922 655,920
------- ------- ---------- ------- ----------
Total Operating Expenses............. 827,377 418,227 1,822,181 698,886 2,978,039
Interest expense, net................ 47 8,543 47 10,892 13,184
Net Loss............................. $(827,424) $(426,770) $(1,822,228) $(709,778) $(2,991,223)
========= ========= =========== ========= ===========
Net Loss Per Share................... $ (0.13) $ (0.09) $ (0.29) $ (0.25) --
========= ========= =========== ========= ===========
Basic Weighted Average
Number of Shares Outstanding...... 6,307,907 4,606,682 6,244,058 2,868,906 --
========= ========= ========= ========= ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
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FROM INCEPTION ON JULY 1, 1998 THROUGH MARCH 31, 2000 (unaudited)
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<TABLE>
<CAPTION>
Deferred
Deficit Compensation
Accumulated Related to the
During the Issuance of
Capital in Excess Development Options
Common Stock of Par Value Stage and Warrants Total
----------------- ----------------- ----------- --------------- -----
Shares Amount
------ ------
<S> <C> <C> <C> <C> <C> <C>
Common stock outstanding............... 999,898 $ 1,500 $ (1,500) $ -- $ -- $ --
Contribution of capital through
payment of expenses.................... -- -- 85,179 -- -- 85,179
Issuance of common stock in reverse
merger on January 22, 1999 at $0.0015
per share.............................. 1,700,000 2,550 (2,550) -- -- --
Issuance of common stock for cash on
May 21, 1999 at
$5.26875 per share..................... 379,597 569 1,995,413 -- -- 1,995,982
Issuance of common stock for
placement fees on May 21, 1999 at
$0.0015 per share...................... 26,572 40 (40) -- -- --
Fair market value of options
and warrants granted on September 7,
1999................................... -- -- 484,603 -- (304,157) 180,446
Two for one stock split,
reincorporation, and change in
par value to $0.01 effective
September 30, 1999..................... 3,106,067 57,462 (57,462) -- -- --
Fair market value of warrants granted
on October 1, 1999..................... -- -- 325,000 -- (262,200) 62,800
Fair market value of warrants granted
on December 15, 1999................... -- -- 911,213 -- (735,213) 176,000
Issuance of common stock for cash on
January 26, 2000 at $2.867647 per
share.................................. 17,436 174 49,826 -- -- 50,000
Issuance of common stock for cash on
January 31, 2000 at $2.87875 per
share.................................. 34,737 347 99,653 -- -- 100,000
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock for cash on
February 4, 2000 at $2.934582 per
share.................................. 85,191 852 249,148 -- -- 250,000
Issuance of common stock for cash on
March 15, 2000 at $2.527875 per
share.................................. 51,428 514 129,486 -- -- 130,000
Legal fees associated with private
placements for the quarter ended
March 31, 2000......................... -- -- (21,311) -- -- (21,311)
Net loss............................... -- -- -- (2,991,223) -- (2,991,223)
-------- ---------- ----------- ------------- ------------ ----------
Balance at March 31, 2000.............. 6,400,926 $ 64,008 $ 4,246,658 $ (2,991,223) $(1,301,570) $ 17,873
========= ========== ============= ============= =========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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(A DEVELOPMENT STAGE COMPANY)
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
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(unaudited)
<TABLE>
<CAPTION>
From Inception
For the Nine Months For the Nine on July 1, 1998
Ended Months Ended through
March 31, March 31, March 31,
2000 1999 2000
------------------- ------------- ---------------
<S> <C> <C> <C>
Cash flows used in operating activities:
Net loss....................................................... $(1,822,228) $(709,778) $(2,991,223)
Adjustments to reconcile net loss
to cash used in operating activities:
Capital contributed through payment of expenses
by stockholder.............................................. -- 85,179 85,179
Issuance of stock options and warrants for services............ 419,246 -- 419,246
Depreciation and amortization.................................. 13,405 2,162 17,408
Increase in operating assets:
Prepaid expense................................................ (16,241) -- (28,783)
Patent costs................................................... (34,798) (53,809) (77,933)
Security deposit............................................... -- (10,863) (10,863)
Increase in operating liabilities:
Accounts payable............................................... 66,455 274,474 236,188
Accrued expenses............................................... 72,348 9,597 75,202
---------- -------- ----------
Net cash used in operating activities.......................... (1,301,813) (403,038) (2,275,579)
---------- -------- ----------
Cash flows from investing activity:
Purchase of equipment.......................................... (12,936) (29,854) (88,461)
----------- -------- --------
Cash flows provided by financing activities:
Proceeds from grant............................................ 10,573 -- 10,573
Proceeds from loans............................................ -- 432,892 --
Net proceeds from issuance of common stock..................... 508,689 -- 2,504,671
---------- -------- ---------
Cash flows provided by financing activities.................... 519,262 432,892 2,515,244
---------- -------- ---------
Net (decrease) increase in cash................................ (795,487) -- 151,204
Cash at beginning of period.................................... 946,691 -- --
Cash at end of period.......................................... $ 151,204 -- $ 151,204
========== ========= ============
Supplemental disclosures of cash flow information:
Interest paid.................................................. $ -- $ -- $ 22,270
========== ========== ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
NOTE 1 - BASIS OF PRESENTATION:
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the year ended June
30, 1999.
In the opinion of the Company's management, the accompanying unaudited
consolidated financial statements contain all adjustments, consisting solely of
those which are of a normal recurring nature, necessary to present fairly its
financial position as of March 31, 2000, the results of its operations for the
three month periods ended March 31, 2000 and 1999, the results of its operations
and cash flows for the nine month periods ended March 31, 2000 and 1999 and for
the period from inception on July 1, 1998 through March 31, 2000.
Interim results are not necessarily indicative of results for the full
fiscal year.
Senesco, a wholly-owned subsidiary of the Company, was incorporated on
November 24, 1998 and is the successor entity to Senesco, L.L.C., a New Jersey
limited liability company, which was formed on June 25, 1998 but commenced
operations on July 1, 1998. This transfer was accounted for at historical cost
in a manner similar to a pooling of interest with the recording of net assets
acquired at their historical book value.
Senesco is a development stage company that was organized to commercially
exploit technology acquired and developed in connection with the identification
and characterization of genes which control the aging of fruits, flowers,
vegetables and crops.
NOTE 2 - LOSS PER SHARE:
Net loss per common share is computed by dividing the loss by the weighted
average number of common shares outstanding during the period. Since September
7, 1999, the Company has had outstanding options and warrants to purchase its
common stock, $0.01 par value per share (the "Common Stock"), however, shares to
be issued upon the exercise of options and warrants are not included in the
computation of loss per share as their effect is anti-dilutive.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
NOTE 3 - SIGNIFICANT EVENTS:
In July 1999, a Joint Venture, to which the Company is a 50% owner, applied
for and received a conditional grant from the Israel - United States Binational
Research and Development Foundation (the "BIRD Foundation"). This agreement will
allow the Joint Venture to receive $340,000 over a four-year period. During the
nine months ended March 31, 2000, the Company received $10,573 from the BIRD
Foundation for research and development expenses the Company has incurred which
are associated with the research and development efforts of the Joint Venture.
Grants received from the BIRD Foundation will be paid back only upon the
commercial success of the Joint Venture, as defined in this Form 10-QSB.
On September 7, 1999, pursuant to the Company's 1998 Stock Incentive Plan
(the "Plan"), the Company granted options to purchase an aggregate of 407,000
shares of the Company's Common Stock as follows: (i) 200,000 options to
Directors of the Company, with one-half of the options vesting on September 7,
1999 and one-half of the options vesting on June 30, 2000, 40,000 of such
options were granted at an exercise price equal to $3.85, and the remaining
160,000 options were granted at an exercise price equal to $3.50; (ii) 30,000
options to members of the Company's Scientific Advisory Board at an exercise
price equal to $3.50 per share, vesting upon the completion of a one year term
on January 31, 2000; (iii) 90,000 options to executive officers of the Company,
with 36,666 options vesting on the date of grant, 20,000 options vesting on June
30, 2000, 16,667 options vesting on the first anniversary from the date of
grant, and 16,667 options vesting on the second anniversary from the date of
grant, 40,000 of such options were granted at an exercise price equal to $3.85,
and the remaining 50,000 options were granted at an exercise price equal to
$3.50; and (iv) 87,000 options to the Company's employees and consultants, at an
exercise price equal to $3.50 per share, with 16,334 options vesting on the date
of grant, 5,000 options vesting on July 15, 2000, 24,000 options vesting on the
first anniversary from the date of grant, 23,998 options vesting on the second
anniversary from the date of grant, and 17,668 options vesting on the third
anniversary from the date of grant.
On September 7, 1999, the Company granted to their patent counsel as
partial consideration for services rendered, options to purchase 10,000 shares
of the Company's Common Stock, at an exercise price equal to $3.50 per share,
with 3,332 options vesting on the date of grant, 3,334 options vesting on the
first anniversary of the date of grant, and 3,334 options vesting on the second
anniversary of the date of grant. Such options were granted outside of the
Company's Plan.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
Christopher Forbes, a director of the Company, is Vice-Chairman of Forbes,
Inc., which publishes Forbes Magazine, a leading business publication. Forbes,
Inc. has provided and will continue to provide the Company with advertising,
introductions to strategic alliance partners and, from time to time, use of its
office space, entertainment facilities and various other support services. The
value of the past and future services are approximately $205,000. In recognition
of the these past services and services to be provided in the future, the Board
of Directors approved and granted to Forbes, Inc., a warrant to purchase 80,000
shares of Common Stock, at an exercise price equal to $3.50 per share, which was
the closing bid on the NASD OTC Bulletin Board on the date of grant. Such
warrant vests as follows: 20,000 on the date of grant and 20,000 on each of the
first, second and third anniversary of the date of grant.
On September 29, 1999, the Board of Directors of the Company approved and
declared a 2-for-1 forward stock split (the "Stock Split"). Stockholders of
record as of the close of business on October 8, 1999 received one (1)
additional share of the Company's Common Stock for every one (1) share of Common
Stock held on that date. The Stock Split became effective on the NASD OTC
Bulletin Board on October 25, 1999. Certain share and per share amounts provided
in the foregoing financial statements and the following text have been restated
to reflect the Stock Split as of September 29, 1999.
On September 30, 1999, the Board of Directors of the Company approved the
reincorporation of the Company solely for the purpose of changing its state of
incorporation from the state of Idaho to the state of Delaware.
On October 1, 1999, the Board of Directors of the Company ratified the
Advisory and Consulting Agreement with the Parenteau Corporation, Inc.
("Parenteau") which was dated as of January 22, 1999 (the "Consulting
Agreement"). The Consulting Agreement provides for, among other things, that
Parenteau will provide financial consulting and other related services to the
Company for a term of one year, in exchange for the issuance of warrants. The
Company has agreed to renew the Consulting Agreement until January 22, 2001.
Pursuant to the terms of the Consulting Agreement, the Company has granted to
Parenteau warrants to purchase an aggregate of 100,000 shares of the Company's
Common Stock, at an exercise price equal to $3.50. Such warrants vest as
follows: 20,000 shares on October 1, 1999, 30,000 shares on September 30, 2000,
30,000 shares on September 30, 2001 and 20,000 shares on December 31, 2001.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
-----------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
On December 15, 1999, the Board of Directors of the Company approved the
Investor Relations Agreement (the "Investor Relations Agreement") with Strategic
Growth International, Inc. ("SGI") for a term of two (2) years; provided,
however, the Company has the right to terminate the agreement on each of the
following dates upon thirty (30) days written notice: January 14, 2000, June 14,
2000, December 14, 2000 and June 14, 2001. The Investor Relations Agreement
provides for, among other things, that SGI will serve as the Company's financial
public relations firm, in exchange for the issuance of warrants with piggy-back
registration rights for a period of three (3) years from the date of the
agreement and demand registration rights for a period of one year beginning
eighteen (18) months from the date of the agreement. In recognition of services
rendered, and to be rendered, the Company has granted to SGI warrants to
purchase an aggregate of 300,000 shares of the Company's Common Stock, at an
exercise price equal to $3.50. Such warrants vest as follows: 100,000 shares on
December 15, 1999, 66,666 shares on June 15, 2000, 66,667 shares on December 15,
2000 and 66,667 shares on June 15, 2001. Notwithstanding the foregoing, in the
event the Company terminates the agreement as provided above, the Company has
the right to rescind any remaining unvested warrants.
In December 1999, the Company initiated a private placement of shares of
its restricted Common Stock (the "December Private Placement"). The Company did
not engage a placement agent for the sale of such securities. During the quarter
ended March 31, 2000, the Company issued an aggregate of 188,792 shares of the
Company's restricted Common Stock for a net purchase price of $508,689 (which is
net of $21,311 in legal fees) in connection with the December Private Placement.
The Company also executed Common Stock Purchase Agreements with each purchaser
of Common Stock (the "Stock Purchase Agreements"). Pursuant to the Stock
Purchase Agreements, the purchase price per share of Common Stock was equal to
80% of the average closing bid and ask prices of the Company's Common Stock
during the twenty (20) trading days ending three days prior to the Closing Date
(as defined therein). In addition, the Company entered into Registration Rights
Agreements with each purchaser (the "Registration Rights Agreement"). The
Registration Rights Agreements provides for, among other things, a demand
registration right beginning one year from the final Closing Date of the
December Private Placement, as well as piggy-back registration rights for a
three-year period from the Closing Date. Certain directors of the Company
participated in the December Private Placement. Specifically, such directors of
the Company purchased, in the aggregate, 52,173 shares of restricted Common
Stock on the same terms and conditions as all purchasers thereunder.
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SENESCO TECHNOLOGIES, INC. AND SUBSIDIARY
-----------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
On February 14, 2000, pursuant to the Plan, the Company granted options to
purchase an aggregate of 25,000 shares of its Common Stock to an executive
officer of the Company at an exercise price equal to $3.375 per share. Such
options vest as follows: (i) 4,167 options vest on the date of grant, (ii) 4,167
options vest six months from the date of grant, (iii) 8,333 options vest on the
first anniversary from the date of grant, and (iv) 8,333 options vest on the
second anniversary from the date of grant.
On March 30, 2000, the Company entered into a financial advisory and
investment banking agreement with an investment bank which will provide the
Company with financial advice and will also provide the Company with investment
banking services on an exclusive basis for a six (6) month term (the "Investment
Banking Agreement"). Pursuant to the Investment Banking Agreement, the
investment bank will receive (i) a consulting fee of $7,500 per month, of which,
$22,500 is payable upon the execution of the Investment Banking Agreement and
$22,500 is payable on June 30, 2000 and, (ii) a warrant to purchase 100,000
shares of the Company's Common Stock with certain registration rights (the
"Warrant"). The Warrant will vest 100% on the date of grant.
In addition, in order to raise additional capital, the Company engaged such
investment bank as its exclusive placement agent to sell shares of restricted
Common Stock.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATION.
OVERVIEW
History and Organization
On March 27, 1997, Nava Leisure USA, Inc., an Idaho Corporation ("Nava"),
voluntarily registered its common stock under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in order to make
information concerning itself more readily available to the public. On January
22, 1999, Senesco, Inc., a New Jersey corporation ("Senesco"), merged with and
into a wholly-owned subsidiary of Nava, and the stockholders of Senesco received
newly issued, unregistered and restricted common stock of Nava such that the
stockholders of Senesco acquired a majority of Nava's outstanding common stock
(the "Merger"). Pursuant to the Merger, Nava changed its name to Senesco
Technologies, Inc. (herein referred to as the "Company"), and Senesco remained a
wholly-owned subsidiary of the Company.
On September 29, 1999, the Company declared a 2-for-1 stock split (the
"Stock Split") of its common stock (the "Common Stock") which became effective
on the NASD OTC Bulletin Board on October 25, 1999. All share amounts and per
share prices stated herein have been adjusted to reflect such Stock Split.
On September 30, 1999, the Company reincorporated from the state of Idaho
to the state of Delaware.
Business of the Company
The business of the Company is currently operated through Senesco, its
wholly-owned subsidiary. The primary business of the Company is the development
and commercial exploitation of potentially significant technology involving the
identification and isolation of genes that the Company believes control the
aging (senescence) of all plant tissues (flowers, fruits and vegetables) and to
increase yield in horticultural and agronomic crops.
Senescence in plant tissues is the natural aging of these tissues. Loss of
cellular membrane integrity is an early event during the senescence of all plant
tissues that prompts the deterioration of fresh flowers, fruits and vegetables.
This loss of integrity, which is attributable to the formation of lipid
metabolites in membrane bilayers that "phase-separate," causes the membranes to
become "leaky." A decline in cell function ensues, leading to deterioration and
eventual death (spoilage) of the tissue. A delay in senescence increases shelf
life which extends the plant's growth timeframe and allows the plant to devote
more time to the photosynthetic process. The Company believes that the
additional energy gained in this period leads directly to increased seed
production, and therefore increases crop yield.
Contrary to the Company's technology, the technology presently utilized by
the industry for increasing the shelf life of flowers, fruits and vegetables
relies on reducing ethylene biosynthesis, and hence only has application to a
limited number of plants that are ethylene-sensitive. Current industry
technology for attempting to increase crop yield relies on delaying leaf
senescence which has also proven ineffective up to this time.
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The Company's research and development program focuses on the discovery and
development of new gene technologies which aim to confer positive traits on
fruits, flowers, vegetables and agronomic crops. To date, the Company has
isolated and characterized the senescence-induced lipase gene, deoxyhypusine
synthase ("DHS") gene and Factor 5A gene in certain species of plants. The
Company's initial goal is to inhibit the expression of (or "silence") these
genes to delay senescence thereby demonstrating "proof of concept" in each
category and then license the technology to strategic partners.
The Company is currently working with tomato, carnation, Arabidopsis (a
model plant which produces oil in a manner similar to canola) and banana plants,
and it has obtained "proof of concept" for the lipase and DHS genes in
Arabidopsis and for the DHS gene in tomato. Near-term research and development
initiatives include: (i) silencing the Factor 5A gene in Arabidopsis, (ii)
silencing the Factor 5A gene in tomato, (iii) silencing the DHS and Factor 5A
genes in carnation and (iv) silencing the lipase, DHS and Factor 5A genes in
banana.
Subsequent initiatives include: (i) expanding the lipase, DHS and Factor 5A
gene technology into a variety of other commercially viable agricultural crops
such as canola, lettuce and strawberries, and (ii) developing transgenic plants
that possess new beneficial traits such as drought and disease protection. The
Company's strategy focuses on various plants to allow flexibility that will
accommodate different plant reproduction strategies among the various sectors of
the broad agricultural and horticultural markets. There can be no assurance,
however, that the Company's research and development efforts will be successful,
or if successful, that the Company will be able to commercially exploit its
technology.
The Company's research and development is performed by third party
researchers at the discretion of the Company pursuant to various research
agreements. The primary research and development effort takes place at The
University of Waterloo in Ontario, Canada. Additional research and development
is performed at the University of California, Davis and Hebrew University in
Rehovot, Israel as well as through the Company's Joint Venture with Rahan
Meristem in Israel.
Worldwide Target Markets
The Company's technology embraces crops that are reproduced both through
seeds and propagation. Propagation means that the plant does not produce fertile
seeds and must reproduce through cuttings from the parent plant which are
planted and become new plants. The Company plans to enter into licensing
agreements and strategic relationships with a variety of companies on a
crop-by-crop basis. The Company also plans to enter into joint ventures where it
will have more direct control over commercialization activities in the end use
market for species which have well established channels of distribution.
-13-
<PAGE>
Joint Venture
On May 14, 1999, the Company entered into a joint venture agreement with
Rahan Meristem Ltd., an Israeli company ("Rahan"), engaged in the worldwide
export marketing of banana germ-plasm (the "Joint Venture"). The Company has
contributed, by way of a limited, exclusive world-wide license to the Joint
Venture, access to its technology, discoveries, inventions, know-how (patentable
or otherwise), pertaining to plant genes and their cognate expressed proteins
that are induced during senescence (plant aging) for the purpose of developing,
on a joint basis, genetically altered banana plants which will result in a
"longer shelf life" banana. Rahan has contributed its technology, inventions and
know-how with respect to banana plants. The Joint Venture is equally owned by
each of the parties. There can be no assurance, however, that the Company's
Joint Venture will be successful, or if successful, that the Company will be
able to commercially exploit its technology.
The Joint Venture applied for and received a conditional grant that totals
$340,000 over a four year period from the Israel - U.S. Binational Research and
Development (the "BIRD") Foundation (the "BIRD Grant"). The Joint Venture has
received a conditional grant in the first year equal to $94,890 which
constitutes 50% of the Joint Venture's year one research and development budget.
Pursuant to the BIRD Grant, such grant, along with certain royalty payments,
shall only be repaid to the BIRD Foundation upon the commercial success of the
Joint Venture's technology, which success is measured based upon certain
benchmarks and/or milestones achieved by the Joint Venture. These benchmarks are
reported periodically to the Foundation by the Joint Venture. To date, the
Company has received $10,573 from the BIRD Foundation for research and
development expenses the Company has incurred which are associated with the
research and development efforts of the Joint Venture. The Company expects to
receive the second installment of the BIRD Grant in the near future.
Intellectual Property
Research and Development Agreement
The inventor of the Company's technology, John E. Thompson, Ph.D., is the
Dean of Science at the University of Waterloo in Waterloo, Ontario and was
recently appointed as the Executive Vice President of Research and Development
of the Company. Dr. Thompson is also a stockholder of the Company and owns
13.68% of the outstanding shares of the Company's Common Stock as of March 31,
2000. Senesco entered into a three-year research and development agreement,
dated as of September 1, 1998, with Dr. Thompson and the University of Waterloo
(the "Research and Development Agreement"). The Research and Development
Agreement provides that the University of Waterloo will perform research and
development under the direction of Senesco, and Senesco will pay for the cost of
this work and make certain payments totaling $1,185,000 Canadian (as specified
therein). In return for these payments, the Company has all rights to the
intellectual property derived from the research.
The Company's future research and development program focuses on the
discovery and development of new gene technologies which aim to extend shelf
life and to confer other positive traits on fruits, flowers, vegetables and row
crops. Over the next twelve months, the Company plans the following research and
development initiatives: (A) the isolation of new genes in the arabidopsis plant
and tomato plant at the University of Waterloo; (B) the isolation of new genes
in the carnation plant pursuant to an informal agreement with Dr. Sasha
Vainstein of Hebrew University; and (C) the isolation of new genes
-14-
<PAGE>
in the banana plant through the Joint Venture. Transgenic plants that possess
new beneficial traits such as drought and disease protection will then be
developed in each of these varieties. The Company also plans to expand its
research and development initiative beyond these four plants into a variety of
other crops.
Patent Applications
Dr. Thompson and his colleagues, Dr. Yuwen Hong and Dr. Katalin Hudak,
filed a patent application on June 26, 1998 (the "Original Patent Application")
to protect their invention, which is directed to methods for controlling
senescence in plants. By assignment dated June 25, 1998 and recorded with the
United States Patent and Trademark Office (the "PTO") on June 26, 1998, Drs.
Thompson, Hong and Hudak assigned all of their rights in and to the Original
Patent Application and any other applications filed in the United States or
elsewhere with respect to the invention and/or improvements thereto to Senesco,
L.L.C. The Company succeeded to the assignment and ownership of the Original
Patent Application. Drs. Thompson, Hong and Hudak filed an amendment to the
Original Patent Application on February 16, 1999 (the "Amended Patent
Application" and together with the Original Patent Application, the "First
Patent Application") titled "DNA Encoding A Plant Lipase, Transgenic Plants and
a Method for Controlling Senescence in Plants." The Amended Patent Application
serves as a continuation of the Original Patent Application. Concurrent with the
filing of the Amended Patent Application with the PTO and as in the case of the
Original Patent Application, Drs. Thompson, Hong and Hudak assigned all of their
rights in and to the Amended Patent Application and any other applications filed
in the United States or elsewhere with respect to such invention and/or
improvements thereto to Senesco. Drs. Thompson, Hong and Hudak have received
shares of restricted Common Stock of the Company in consideration for the
assignment of the First Patent Application. The inventions, which were the
subject of the First Patent Application, include a method for controlling
senescence of plants, a vector containing a cDNA whose expression regulates
senescence, and a transformed microorganism expressing the lipase of cDNA.
Management believes that the inventions provide a means for delaying
deterioration and spoilage, which could greatly increase the shelf-life of
fruits, vegetables, and flowers by silencing or substantially repressing the
expression of the lipase gene induced coincident with the onset of senescence.
The Company filed a second patent application (the "Second Patent
Application", and together with the First Patent Application, collectively, the
"Patent Applications") on July 6, 1999, titled "DNA Encoding A Plant
Deoxyhypusine Synthase, Transgenic Plants and A Method for Controlling
Programmed Cell Death in Plants." The inventors named on the patent are Drs.
John E. Thompson, Tzann-Wei Wang and Dongen Lily Lu. Concurrent with the filing
of the Second Patent Application with the PTO and as in the case of the First
Patent Application, Drs. Thompson, Wang and Lu assigned all of their rights in
and to the Second Patent Application and any other applications filed in the
United States or elsewhere with respect to such invention and/or improvements
thereto to Senesco. Drs. Thompson, Wang and Lu have received options to purchase
Common Stock of the Company in consideration for the assignments of the Second
Patent Application. The inventions include a method for the genetic modification
of plants to control the onset of either age-related or stress-induced
senescence, an isolated DNA molecule encoding a senescence induced gene, and an
isolated protein encoded by the DNA molecule.
-15-
<PAGE>
Currently, the Company is in the process of drafting certain patent applications
for new senescence technology that should be filed with the PTO in the near
future. There can be no assurance that patent protection will be granted with
respect to the Patent Applications, or any other applications, or that, if
granted, the validity of such patents will not be challenged. Furthermore, there
can be no assurance that claims of infringement upon the proprietary rights of
others will not be made, or if made, could be successfully defended against.
Competition
The Company's competitors in the field of delaying plant senescence are
companies that develop and produce transgenic plants in which ethylene
biosynthesis has been silenced. Such companies include: Agritope Inc.; Dekalb
Genetics; AgrEvo; Bionova Holding Corporation; and Garst Seed Company, among
others. The Company believes that its proprietary technology is unique and,
therefore, places the Company at a competitive advantage in the industry.
However, there can be no assurance that its competitors will not develop a
similar product with superior properties or at greater cost-effectiveness than
the Company.
Government Regulation
At present, the U.S. federal government regulation of biotechnology is
divided among three agencies. The U.S. Department of Agriculture (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
Environmental Protection Agency (the "EPA") regulates activity related to the
invention of plant pesticides and herbicides, which may include certain kinds of
transgenic plants. The Food and Drug Administration (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 market
place.
The Company believes that its current activities, which to date have been
confined to research and development efforts, do not require licensing or
approval by any governmental regulatory agency. The Company may be required,
however, to obtain such licensing or approval from the governmental regulatory
agencies described above prior to the commercialization of its genetically
engineered plants. There can be no assurance that such licensing or approval by
any governmental regulatory agency will be obtained in a timely manner, if at
all. In addition, government regulations are subject to change and, in such
event, there can be no assurance that the Company may not be subject to
additional regulations or require such licensing or approval in the future.
-16-
<PAGE>
Employees
The Company currently has seven employees, four of whom are currently
executive officers and are involved in the management of the Company.
The officers are assisted by a Scientific Advisory Board made up of
prominent experts in the field of transgenic plants. A. Carl Leopold, Ph.D.
serves as Chairman of the Scientific Advisory Board. He is currently a member
and a W.H. Crocker Scientist Emeritus of the Boyce Thompson Institute for Plant
Research at Cornell University. Dr. Leopold has held numerous academic
appointments and memberships, including staff member of the Science and
Technology Policy Office during the Nixon and Ford Administrations, and
positions with the National Science Foundation and the National Aeronautics and
Space Administration. Alan B. Bennett, Ph.D., and William R. Woodson, Ph.D. are
the other members of the Scientific Advisory Board. Dr. Bennett is the Associate
Dean of the College of Agricultural and Environmental Sciences at the University
of California, Davis. His research interests include: the molecular biology of
tomato fruit development and ripening; the molecular basis of membrane
transport; and cell wall disassembly. Dr. Woodson is the Associate Dean of
Agriculture and Director of Agricultural Research Programs at Purdue University.
He has been a visiting professor at many universities worldwide including the
John Innis Institute in England and the Weizmann Institute of Science in Israel.
Dr. Woodson is a world-recognized expert in horticultural science and serves on
numerous international and national committees and professional societies.
In addition to his service on the Scientific Advisory Board, the Company
utilizes Dr. Bennett as a consultant experienced in the transgenic plant
industry.
Furthermore, pursuant to the Research and Development Agreement, the
majority of the Company's research and development activities are conducted at
the University of Waterloo under the supervision of Dr. Thompson. The Company
utilizes the University's substantial research staff including graduate and
post-graduate researchers.
The Company anticipates hiring additional employees in the over the next
twelve months to meet needs created by possible expansion of its marketing
activities and product development.
Safe Harbor Statement
Certain statements included in this Form 10-QSB, including, without
limitation, statements regarding the anticipated growth in the markets for the
Company's services, the continued development of the Company's genetic
technology, the approval of the Company's Patent Applications, the possibility
of governmental approval in order to sell or offer for sale to the general
public a genetically engineered plant or plant product, the successful
implementation of the Joint Venture with Rahan, the success of the Research and
Development Agreement, statements relating to the Company's Patent Applications,
the anticipated longer term growth of the Company's business, and the timing of
the projects and trends in future operating performance, are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. The factors discussed herein and others expressed from time
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<PAGE>
to time in the Company's filings with the Securities and Exchange Commission
could cause actual results and developments to be materially different from
those expressed in or implied by such statements. The Company does not undertake
to update any forward-looking statements.
LIQUIDITY AND CAPITAL RESOURCES
Overview
As of March 31, 2000, the Company's cash balance was $151,204, and the
Company's working capital deficiency was $131,403. As of March 31, 2000, the
Company had a tax loss carry-forward of $2,991,223 to off-set future taxable
income. There can be no assurance, however, that the Company will be able to
take advantage of any or all of such tax loss carry-forward, if at all, in
future fiscal years.
Financing Needs
To date, the Company has not generated any revenues. The Company has not
been profitable since inception, may incur additional operating losses in the
future, and may require additional financing to continue the development and
subsequent commercialization of its technology. While the Company does not
expect to generate significant revenues from the sale of products in the near
future, the Company may enter into licensing or other agreements with marketing
and distribution partners that may result in license fees, revenues from
contract research, or other related revenue.
The Company expects its capital requirements to increase significantly over
the next several years as it commences new research and development efforts,
undertakes new product developments, increases sales and administration
infrastructure and embarks on developing in-house business capabilities and
facilities. The Company's future liquidity and capital funding requirements will
depend on numerous factors, including, but not limited to, the levels and costs
of the Company's research and development initiatives and the cost and timing of
the expansion of the Company's sales and marketing efforts.
In order to fund its research and development and commercialization
efforts, including the hiring of additional employees, during the quarter ended
March 31, 2000, the Company consummated a private placement of 188,792 shares of
its Common Stock for a net purchase price of $508,689, which is net of $21,311
in legal fees (the "December Private Placement"). See "Part II, Item 5. Other
Information." Certain directors of the Company participated in the December
Private Placement on the same terms and conditions as all purchasers thereunder.
In addition, the Company has engaged a placement agent to conduct an additional
private placement of restricted shares of Common Stock. The Company anticipates
that it will only be able to fund its operations over the next twelve (12)
months if it is successful in consummating the current private placement, or if
the Company can otherwise raise additional capital.
On March 30, 2000, the Company entered into a financial advisory and
investment banking agreement with an investment bank which will provide the
Company with financial advice and will also provide the Company with investment
banking services on an exclusive basis.
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<PAGE>
In addition, the Company anticipates receiving additional funds from the
BIRD Grant to assist in funding its Joint Venture. See "Management's Discussion
and Analysis of Financial Condition and Plan of Operation."
YEAR 2000 ISSUES
The Company believes that material Year 2000 compliance problems would have
arisen on or immediately after January 1, 2000. As of the date hereof, the
Company is not aware of any Year 2000-related problems associated with its
internal systems or software or that of its vendors, suppliers, manufacturers,
distributors and marketing partners. It is possible, however, that further Year
2000-related problems will arise in the future.
Other than time spent by the Company's own personnel, to date the Company
has not incurred any significant costs in identifying and remediating Year 2000
problems.
-19-
<PAGE>
RESULTS OF OPERATIONS
Nine Months Ended March 31, 2000 and Nine Months Ended March 31, 1999
- ---------------------------------------------------------------------
The Company is a development stage company, and revenues for each of the
nine month periods ended March 31, 2000 and March 31, 1999 were $0. Operating
expenses in each of the nine month periods ended March 31, 2000 and March 31,
1999 were comprised of general and administrative expenses, sales and marketing
expenses and research and development expenses. Operating expenses for the nine
month periods ended March 21, 2000 and March 31, 1999 were approximately
$1,822,181 and $698,886, respectively, an increase of approximately $1,123,295,
or 160.7%.
General and administrative expenses in each of the nine month periods ended
March 31, 2000 and March 31, 1999 consisted primarily of professional salaries
and benefits, depreciation and amortization, professional and consulting
services, office rent and corporate insurance. General and administrative
expenses were approximately $1,339,722 in the nine month period ended March 31,
2000 and approximately $546,964 in the nine month period ended March 31, 1999.
The increase during the nine month period ended March 31, 2000 of approximately
$792,758, or 144.9%, from the corresponding nine month period in 1999, resulted
primarily from increases in expensing of options and warrants, payroll expenses
and professional services.
Research and development expenses in each of the nine month periods ended
March 31, 2000 and March 31, 1999 consisted of professional salaries and
benefits, fees associated with Research and Development Agreement and allocated
overhead charged to research and development projects. Research and development
expenses during each of nine month periods ended March 31, 2000 and March 31,
1999 were approximately $482,459 and $151,922, respectively. The increase during
the nine month period ended March 31, 2000 of approximately $330,537, or 217.6%,
from the nine month period ended March 31, 1999, resulted primarily from
increases in the cost of research activities pursuant to the Research and
Development Agreement with the University of Waterloo.
Three Months Ended March 31, 2000 and Three Months Ended March 31, 1999
- -------------------------------------------------------------------------
The Company is a development stage company, and revenues for each of the
three month periods ended March 31, 2000 and March 31, 1999 were $0. Operating
expenses in each of the three month periods ended March 31, 2000 and March 31,
1999 were comprised of general and administrative expenses, sales and marketing
expenses and research and development expenses. Operating expenses for the three
month periods ended March 21, 2000 and March 31, 1999 were approximately
$827,377 and $418,227, respectively, an increase of approximately $409,150, or
97.8%.
General and administrative expenses in each of the three month periods
ended March 31, 2000 and March 31, 1999 consisted primarily of professional
salaries and benefits, depreciation and amortization, professional and
consulting services, office rent and corporate insurance. General and
administrative expenses were approximately $541,727 in the three month period
ended March 31, 2000 and approximately $275,305 in the three month period ended
March 31, 1999. The increase during the three month period ended March 31, 2000
of approximately
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<PAGE>
$266,422, or 96.8%, from the corresponding three month period in 1999, resulted
primarily from increases in expensing of options and warrants, payroll expenses
and professional services.
Research and development expenses in each of the three month periods ended
March 31, 2000 and March 31, 1999 consisted of professional salaries and
benefits, fees associated with Research and Development Agreement and allocated
overhead charged to research and development projects. Research and development
expenses during each of three month periods ended March 31, 2000 and March 31,
1999 were approximately $285,650 and $142,922, respectively. The increase during
the three month period ended March 31, 2000 of approximately $142,728, or 99.9%,
from the three month period ended March 31, 1999, resulted primarily from
increases in the cost of research activities pursuant to the Research and
Development Agreement with the University of Waterloo.
Period From Inception on July 1, 1998 through March 31, 2000
- ------------------------------------------------------------
The Company is a development stage company. From inception through March
31, 2000, the Company had no revenues.
The Company has incurred losses each year since inception and has an
accumulated deficit of approximately $2,991,223 at March 31, 2000. The Company
expects to continue to incur losses over, approximately, the next two to three
years from expenditures on research, product development, marketing and
administrative activities.
The Company does not expect to generate significant revenues from product
sales for, approximately, the next two to three years during which the Company
will engage in significant research and development efforts. However, the
Company may enter into licensing or other agreements with marketing and
distribution partners that may result in license fees, revenues from contract
research, and other related revenues. No assurance can be given, however, that
such research and development efforts will result in any commercially viable
products, or that any licensing or other agreements with marketing and
distribution partners will be entered into and result in revenues. Successful
future operations will depend on the Company's ability to transform its research
and development activities into commercializable products.
-21-
<PAGE>
PART II. OTHER INFORMATION.
---------------------------
Item 2. Changes in Securities and Use of Proceeds.
During the quarter ended March 31, 2000, the Company issued an aggregate of
188,792 shares of its restricted Common Stock to accredited investors in
connection with the December Private Placement. Certain directors of the Company
participated in the December Private Placement. Specifically, such directors of
the Company purchased, in the aggregate, 52,173 shares of restricted Common
Stock on the same terms and conditions as all purchasers thereunder. See "Item
5. Other Information."
On February 14, 2000, pursuant to the Company's 1998 Stock Incentive Plan
(the "Plan"), the Company granted options to purchase an aggregate of 25,000
shares of its Common Stock to an executive officer of the Company at an exercise
price equal to $3.375 per share. Such options vest as follows: (i) 4,167 options
vest on the date of grant, (ii) 4,167 options vest six months from the date of
grant, (iii) 8,333 options vest on the first anniversary from the date of grant,
and (iv) 8,333 options vest on the second anniversary from the date of grant.
No underwriter was employed by the Company in connection with the issuance
of the securities described above. The Company believes that the issuance of the
foregoing securities was exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended (the "Act"), as transactions not involving a
public offering and such securities having been acquired for investment and not
with a view to distribution. No public offering was involved and the securities
were acquired only by accredited investors and only for investment and not with
a view to distribution. Appropriate legends have been affixed to the foregoing
securities, and all recipients had adequate access to information about the
Company.
-22-
<PAGE>
Item 5. Other Information.
Investment Banking Agreement
On March 30, 2000, the Company entered into a financial advisory and
investment banking agreement with an investment bank which will provide the
Company with financial advice and will also provide the Company with investment
banking services on an exclusive basis for a six (6) month term (the "Investment
Banking Agreement"). Pursuant to the Investment Banking Agreement, the
investment bank will receive (i) a consulting fee of $7,500 per month, of which,
$22,500 is payable upon the execution of the Investment Banking Agreement and
$22,500 is payable on June 30, 2000 and, (ii) a warrant to purchase 100,000
shares of the Company's Common Stock with certain registration rights (the
"Warrant"). The Warrant will vest 100% on the date of grant.
Private Placements
In December 1999, the Company initiated a private placement of shares of
its restricted Common Stock (the "December Private Placement"). The Company did
not engage a placement agent for the sale of such securities. During the quarter
ended March 31, 2000, the Company issued an aggregate of 188,792 shares of the
Company's restricted Common Stock for a net purchase price of $508,689 (which is
net of $21,311 in legal fees) in connection with the December Private Placement.
The Company also executed Common Stock Purchase Agreements with each purchaser
of Common Stock (the "Stock Purchase Agreements"). Pursuant to the Stock
Purchase Agreements, the purchase price per share of Common Stock was equal to
80% of the average closing bid and ask prices of the Company's Common Stock
during the twenty (20) trading days ending three days prior to the Closing Date
(as defined therein). In addition, the Company entered into Registration Rights
Agreements with each purchaser (the "Registration Rights Agreement"). The
Registration Rights Agreements provides for, among other things, a demand
registration right beginning one year from the final Closing Date of the
December Private Placement, as well as piggy-back registration rights for a
three-year period from the Closing Date. Certain directors of the Company
participated in the December Private Placement. Specifically, such directors of
the Company purchased, in the aggregate, 52,173 shares of restricted Common
Stock on the same terms and conditions as all purchasers thereunder. In
addition, the Company has engaged its investment bank as its exclusive placement
agent to raise additional capital by selling shares of the Company's restricted
Common Stock.
Management Restructuring
On January 10, 2000, the Company completed a partial restructuring of its
executive management. Phillip O. Escaravage, the Company's Founder and former
Chairman, Chief Executive Officer, President and Treasurer became the Vice
Chairman of the Company's Board of Directors. The Company appointed Ruedi
Stalder, a member of the Company's Board of Directors, as its Chairman and Chief
Executive Officer. In addition, the Company appointed
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<PAGE>
Steven Katz, also a member of the Company's Board of Directors, as its
President, Chief Operating Officer and Treasurer.
Each of Messrs. Escaravage, Stalder, and Katz will remain Directors of the
Company. Mr. Stalder has been a member of the Company's Board of Directors since
February 1999. Mr. Katz has been a member of the Company's Board of Directors
since January 1999 and has served as a consultant to the Company since July
1998.
During the quarter ended March 31, 2000, Christopher P. Ahrens resigned as
Secretary of the Company. The Company appointed Sascha P. Fedyszyn, the
Company's Vice President of Corporate Development, as its Secretary. In
addition, the Company appointed Richard Sirkin as its Chief Financial Officer
and Treasurer.
Reconstitution of Compensation and Audit Committees
In connection with the management restructuring, Christopher Forbes, a
current outside director on the Company's Board of Directors since January 1999,
was appointed to serve on the Compensation Committee to replace Mr. Stalder, and
Thomas C. Quick, also a current outside director on the Company's Board of
Directors since February 1999, was appointed to serve on the Audit Committee to
replace Mr. Stalder. Each of the Compensation Committee and Audit Committee are
currently comprised of Mr. Forbes, Mr. Katz and Mr. Quick.
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
27 Financial Data Schedule for the period ended 3/31/00.
(b) Reports on Form 8-K.
On January 18, 2000, the Company filed a report on Form 8-K
relating to the Company's management restructuring.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SENESCO TECHNOLOGIES, INC.
DATE: May 15, 2000 By: /s/ Steven Katz
---------------------------
Steven Katz, President
and Chief Operating Officer
(Principal Executive Officer)
DATE: May 15, 2000 By: /s/ Richard Sirkin
----------------------------
Richard Sirkin, Chief Financial
Officer and Treasurer
(Principal Financial and
Accounting Officer)
-26-
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANICAL STATEMENTS AT MARCH 31, 2000 WHICH ARE INCLUDED
IN THE REGISTRANT'S FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
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