UNITED
STATES


SECURITIES AND
EXCHANGE COMMISSION


WASHINGTON,D.C.
20549




FORM
10-Q




(Mark
One)




x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934For the quarterly period ended
      September 30, 2009




or




o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from _____________ to
  _____________




Commission
File No. 001-31326




SENESCO
TECHNOLOGIES, INC.


(exact
name of registrant as specified in its charter)




Delaware
            84-1368850(State
      or other jurisdiction of
              incorporation
      or organization)
            (IRS
      Employer
              Identification
      No.)





303 George Street, Suite
420


New Brunswick, New Jersey
08901


(Address
of principal executive offices)




(732) 296-8400


(Registrant’s
telephone number, including area code)




Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities 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:
xNo: o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes:
oNo: o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See definitions of “accelerated filer”, “large accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer o
            Accelerated
      filer oSmaller
      reporting company x
            Non-accelerated
      filer o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes:
oNo: x




As of
October 31, 2009, 25,364,053 shares of the issuer’s common stock, par value
$0.01 per share, were outstanding.







SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY




TABLE OF
CONTENTS




PagePART
      I. FINANCIAL INFORMATIONItem
      1. Financial Statements (Unaudited)
              
              
              1CONDENSED
      CONSOLIDATED BALANCE SHEETSas
      of September 30, 2009 and June 30, 2009
              
              
              2CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONSFor
      the Three Months Ended September 30, 2009 and 2008, and From Inception on
      July 1, 1998 through September 30, 2009
              
              
              3CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITYFrom
      Inception on July 1, 1998 through September 30, 2009
              
              
              4CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWSFor
      the Three Months Ended September 30, 2009 and 2008, and From Inception on
      July 1, 1998 through September 30, 2009
              
              
              9NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL  STATEMENTS
              
              
              10Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
              
              
              22Overview
              
              
              22Liquidity
      and Capital Resources
              
              
              35Changes
      to Critical Accounting Policies and Estimates
              
              
              37Results
      of Operations
              
              
              38Item
      3. Quantitative and Qualitative Disclosures about Market
    Risk
              
              
              42Item
      4T. Controls and Procedures
              
              
              42PART
      II. OTHER INFORMATIONItem
      1A. Risk Factors
              
              
              43Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
              
              
              57Item
      4. Submission of Matters to a Vote of Security Holders
              
              
              59Item
      5. Other Information
              
              
              60Item
      6. Exhibits
              
              
              61SIGNATURES
              
              
              62




-i-


PART I.  FINANCIAL
INFORMATION.




Item
1. Financial
Statements.




Certain
information and footnote disclosures required under United States 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.  However, Senesco Technologies,
Inc., a Delaware corporation, and its wholly owned subsidiary, Senesco, Inc., a
New Jersey corporation (collectively, “Senesco” or the “Company”), 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.




-1-





SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
BALANCE SHEETS





September
      30,
            
            
            June
      30,2009
            
            
            2009ASSETS
            
            (unaudited)CURRENT
      ASSETS:Cash
      and cash equivalents
            
            $
            275,295
            
            
            $
            380,569Short-term
      investments
            
            
            800,000
            
            
            
            1,050,000Subscriptions
      receivable
            
            
            392,000
            
            
            
            -Prepaid
      expenses and other current assets
            
            
            1,116,516
            
            
            
            1,161,348Total
      Current Assets
            
            
            2,583,811
            
            
            
            2,591,917Property
      and equipment, net
            
            
            6,594
            
            
            
            5,986Intangibles,
      net
            
            
            4,046,985
            
            
            
            3,884,999Deferred
      financing costs
            
            
            488,046
            
            
            
            632,324Security
      deposit
            
            
            7,187
            
            
            
            7,187TOTAL
      ASSETS
            
            $
            7,132,623
            
            
            $
            7,122,413LIABILITIES AND
      STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Accounts
      payable
            
            $
            426,088
            
            
            $
            976,680Accrued
      expenses
            
            
            561,208
            
            
            
            355,937Total
      Current Liabilities
            
            
            987,296
            
            
            
            1,332,617Convertible
      note, net of discount
            
            
            18,179
            
            
            
            6,217Warrant
      liability
            
            
            1,311,975
            
            
            
            -Grant
      payable
            
            
            99,728
            
            
            
            99,728Other
      liability
            
            
            14,028
            
            
            
            16,017TOTAL
      LIABILITIES
            
            
            2,431,206
            
            
            
            1,454,579STOCKHOLDERS’
      EQUITY:Preferred
      stock, $0.01 par value; authorized 5,000,000 shares, no shares
      issued
            
            
            —
            
            
            
            —Common
      stock, $0.01 par value; authorized 120,000,000 shares, issued and
      outstanding 24,777,638 and 19,812,043, respectively
            
            
            247,776
            
            
            
            198,120Capital
      in excess of par, net of $88,000 subscription receivable
            
            
            35,861,069
            
            
            
            36,687,846Deficit
      accumulated during the development stage
            
            
            (31,407,428
            )
            
            
            (31,218,132
            )TOTAL
      STOCKHOLDERS’ EQUITY
            
            
            4,701,417
            
            
            
            5,667,834TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            7,132,623
            
            
            $
            7,122,413





See Notes
to Condensed Consolidated Financial Statements.




-2-





SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS


(unaudited)




For
      the Three Months Ended
              September
      30,
            
            
            For
      the Three Months Ended
              September
      30,
            
            
            From
      Inception on July 1, 1998 through
              September
      30,2009
            
            
            2008
            
            
            2009Revenue
            
            $
            —
            
            
            $
            200,000
            
            
            $
            1,450,000Operating
      Expenses:General
      and administrative
            
            
            494,955
            
            
            
            529,865
            
            
            
            24,426,148Research
      and development
            
            
            575,291
            
            
            
            504,386
            
            
            
            12,886,850Total
      Operating Expenses
            
            
            1,070,246
            
            
            
            1,034,251
            
            
            
            37,312,998Loss
      From Operations
            
            
            (1,070,246
            )
            
            
            (834,251
            )
            
            
            (35,862,998
            )Sale
      of state income tax loss, net
            
            
            —
            
            
            
            —
            
            
            
            586,442Fair
      value – warrant liability
            
            
            1,888,133
            
            
            
            —
            
            
            
            6,619,900Other
      noncash income
            
            
            —
            
            
            
            —
            
            
            
            321,259Interest
      income, net
            
            
            347
            
            
            
            23,057
            
            
            
            523,660Amortization
      of debt discount and financing costs
            
            
            (807,914
            )
            
            
            (106,055
            )
            
            
            (1,954,677
            )Interest
      expense on convertible notes
            
            
            (199,616
            )
            
            
            (264,157
            )
            
            
            (1,641,014
            )Net
      Loss
            
            $
            (189,296
            )
            
            $
            (1,181,406
            )
            
            $
            (31,407,428
            )Basic
      and Diluted Net Loss Per Common Share
            
            $
            (0.01
            )
            
            $
            (0.06
            )Basic
      and Diluted Weighted Average Number of Common Shares
      Outstanding
            
            
            22,046,718
            
            
            
            18,379,379




See Notes
to Condensed Consolidated Financial Statements.




-3-


SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


FROM INCEPTION ON JULY 1,
1998 THROUGH SEPTEMBER 30, 2009


(unaudited)




Common
      Stock
            
            
            Capital
      in Excess of Par Value
            
            
            Deficit
      Accumulated During the Development Stage
            
            
            TotalShares
            
            
            AmountCommon
      stock outstanding
            
            
            2,000,462
            
            
            $
            20,005
            
            
            $
            (20,005
            )
            
            
            —
            
            
            
            —Contribution
      of capital
            
            
            —
            
            
            
            —
            
            
            
            85,179
            
            
            
            —
            
            
            $
            85,179Issuance
      of common stock in reverse merger on January 22, 1999 at $0.01 per
      share
            
            
            3,400,000
            
            
            
            34,000
            
            
            
            (34,000
            )
            
            
            —
            
            
            
            —Issuance
      of common stock for cash on May 21, 1999 at$2.63437 per
    share
            
            
            759,194
            
            
            
            7,592
            
            
            
            1,988,390
            
            
            
            —
            
            
            
            1,995,982Issuance
      of common stock for placement fees on May 21, 1999 at $0.01 per
      share
            
            
            53,144
            
            
            
            531
            
            
            
            (531
            )
            
            
            —
            
            
            
            —Issuance
      of common stock for cash on January 26, 2000 at $2.867647 per
      share
            
            
            17,436
            
            
            
            174
            
            
            
            49,826
            
            
            
            —
            
            
            
            50,000Issuance
      of common stock for cash on January 31, 2000 at $2.87875 per
      share
            
            
            34,737
            
            
            
            347
            
            
            
            99,653
            
            
            
            —
            
            
            
            100,000Issuance
      of common stock for cash on February 4, 2000 at $2.934582 per
      share
            
            
            85,191
            
            
            
            852
            
            
            
            249,148
            
            
            
            —
            
            
            
            250,000Issuance
      of common stock for cash on March 15, 2000 at $2.527875 per
      share
            
            
            51,428
            
            
            
            514
            
            
            
            129,486
            
            
            
            —
            
            
            
            130,000Issuance
      of common stock for cash on June 22, 2000 at $1.50 per
    share
            
            
            1,471,700
            
            
            
            14,718
            
            
            
            2,192,833
            
            
            
            —
            
            
            
            2,207,551Commissions,
      legal and bank fees associated with issuances for the year ended June 30,
      2000
            
            
            —
            
            
            
            —
            
            
            
            (260,595
            )
            
            
            —
            
            
            
            (260,595
            )Fair
      market value of options and warrants vested during the year ended June 30,
      2000
            
            
            —
            
            
            
            —
            
            
            
            1,475,927
            
            
            
            —
            
            
            
            1,475,927




(continued)




See Notes
to Condensed Consolidated Financial Statements.




-4-


SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


FROM INCEPTION ON JULY 1,
1998 THROUGH SEPTEMBER 30, 2009


(unaudited)




Common
      Stock
            
            
            Capital
      in Excess of Par Value
            
            
            Deficit
      Accumulated During the Development Stage
            
            
            TotalShares
            
            
            AmountFair
      market value of options and warrants vesting during the year ended June
      30, 2001
            
            
            —
            
            
            
            —
            
            
            $
            308,619
            
            
            
            —
            
            
            $
            308,619Issuance
      of common stock and warrants for cash from November 30, 2001 through April
      17, 2002 at $1.75 per unit
            
            
            3,701,430
            
            
            $
            37,014
            
            
            
            6,440,486
            
            
            
            —
            
            
            
            6,477,500Issuance
      of common stock and warrants associated with bridge loan conversion on
      December 3, 2001
            
            
            305,323
            
            
            
            3,053
            
            
            
            531,263
            
            
            
            —
            
            
            
            534,316Commissions,
      legal and bank fees associated with issuances for the year ended June 30,
      2002
            
            
            —
            
            
            
            —
            
            
            
            (846,444
            )
            
            
            —
            
            
            
            (846,444
            )Fair
      market value of options and warrants vested during the year ended June 30,
      2002
            
            
            —
            
            
            
            —
            
            
            
            1,848,726
            
            
            
            —
            
            
            
            1,848,726Fair
      market value of options and warrants vested during the year ended June 30,
      2003
            
            
            —
            
            
            
            —
            
            
            
            848,842
            
            
            
            —
            
            
            
            848,842Issuance
      of common stock and warrants for cash from January 15, 2004 through
      February 12, 2004 at $2.37 per unit
            
            
            1,536,922
            
            
            
            15,369
            
            
            
            3,627,131
            
            
            
            —
            
            
            
            3,642,500Allocation
      of proceeds to warrants
            
            
            —
            
            
            
            —
            
            
            
            (2,099,090
            )
            
            
            —
            
            
            
            (2,099,090
            )Reclassification
      of warrants
            
            
            —
            
            
            
            
            
            
            
            1,913,463
            
            
            
            —
            
            
            
            1,913,463Commissions,
      legal and bank fees associated with issuances for the year ended June 30,
      2004
            
            
            —
            
            
            
            
            
            
            
            (378,624
            )
            
            
            —
            
            
            
            (378,624
            )


(continued)




See Notes
to Condensed Consolidated Financial Statements.




-5-


SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


FROM INCEPTION ON JULY 1,
1998 THROUGH SEPTEMBER 30, 2009


(unaudited)




Common
      Stock
              
              
              Capital
      in Excess of Par Value
              
              
              Deficit
      Accumulated During the Development Stage
              
              
              TotalShares
              
              
              AmountFair
      market value of options and warrants vested during the year ended June 30,
      2004
              
              
              —
              
              
              
              —
              
              
              $
              1,826,514
              
              
              
              —
              
              
              $
              1,826,514Options
      and warrants exercisedduring
      the year ended June 30, 2004 at exercise prices ranging from $1.00 -
      $3.25
              
              
              370,283
              
              
              $
              3,704
              
              
              
              692,945
              
              
              
              —
              
              
              
              696,649Issuance
      of common stock and warrants for cash on May 9, 2005 at $2.11 per
      unit
              
              
              1,595,651
              
              
              
              15,957
              
              
              
              3,350,872
              
              
              
              —
              
              
              
              3,366,829Allocation
      of proceeds to warrants
              
              
              —
              
              
              
              —
              
              
              
              (1,715,347
              )
              
              
              —
              
              
              
              (1,715,347
              )Reclassification
      of warrants
              
              
              —
              
              
              
              —
              
              
              
              1,579,715
              
              
              
              —
              
              
              
              1,579,715Commissions,
      legal and bank fees associated with issuance on May 9,
      2005
              
              
              —
              
              
              
              —
              
              
              
              (428,863
              )
              
              
              —
              
              
              
              (428,863
              )Options
      and warrants exercised during the year ended June 30, 2005 at exercise
      prices ranging from $1.50 to $3.25
              
              
              84,487
              
              
              
              844
              
              
              
              60,281
              
              
              
              —
              
              
              
              61,125Fair
      market value of options and warrants vested during the year ended June 30,
      2005
              
              
              —
              
              
              
              —
              
              
              
              974,235
              
              
              
              —
              
              
              
              974,235Fair
      market value of options and Warrants granted and vested During the year
      ended June 30,2006
              
              
              —
              
              
              
              —
              
              
              
              677,000
              
              
              
              —
              
              
              
              677,000Warrants
      exercised during the year ended June 30, 2006 at an exercise price of
      $0.01
              
              
              10,000
              
              
              
              100
              
              
              
              —
              
              
              
              —
              
              
              
              100Issuance
      of common stock and warrants for cash on October 11, 2006 at $1.135 per
      unit
              
              
              1,986,306
              
              
              
              19,863
              
              
              
              2,229,628
              
              
              
              —
              
              
              
              2,249,491Commissions,
      legal and bank  fees associated with issuance on October 11,
      2006
              
              
              —
              
              
              
              —
              
              
              
              (230,483
              )
              
              
              —
              
              
              
              (230,483
              )




(continued)




See Notes
to Condensed Consolidated Financial Statements




-6-


SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


FROM INCEPTION ON JULY 1,
1998 THROUGH SEPTEMBER 30, 2009


(unaudited)


Common
      Stock
            
            
            Capital
      in Excess of Par Value
            
            
            Deficit
      Accumulated During the Development Stage
            
            
            TotalShares
            
            
            AmountFair
      market value of options and warrants vested during the year ended June 30,
      2007
            
            
            —
            
            
            
            —
            
            
            $
            970,162
            
            
            
            —
            
            
            $
            970,162Warrants
      exercised during the year ended June 30, 2007 at an exercise price of
      $0.01
            
            
            10,000
            
            
            $
            100
            
            
            
            —
            
            
            
            —
            
            
            
            100Fair
      market value of options and warrants vested during the year ended June 30,
      2008
            
            
            —
            
            
            
            —
            
            
            
            1,536,968
            
            
            
            —
            
            
            
            1,536,968Allocation
      of proceeds from issuance of convertible notes and warrants from September
      21, 2007 through June 30, 2008
            
            
            —
            
            
            
            —
            
            
            
            9,340,000
            
            
            
            —
            
            
            
            9,340,000Issuance
      of common stock in lieu of cash payment for interest during the year ended
      June 30, 2008
            
            
            345,867
            
            
            
            3,458
            
            
            
            430,696
            
            
            
            —
            
            
            
            434,154Convertible
      notes converted into common stock during the year ended June 30,
      2008
            
            
            555,556
            
            
            
            5,556
            
            
            
            430,952
            
            
            
            —
            
            
            
            436,508Fair
      market value of options and warrants vested during the
      year  ended June 30, 2009
            
            
            —
            
            
            
            —
            
            
            
            506,847
            
            
            
            —
            
            
            
            506,847Cashless
      exercise of warrants during the year ended June 30, 2009 at an exercise
      price of $0.74
            
            
            2,395
            
            
            
            24
            
            
            
            (24
            )
            
            
            —
            
            
            
            —Issuance
      of common stock in lieu of cash payment for interest during the year ended
      June 30,2009
            
            
            1,271,831
            
            
            
            12,718
            
            
            
            944,526
            
            
            
            —
            
            
            
            1,007,244Convertible
      notes converted into common stock during the year ended June 30,
      2009
            
            
            50,000
            
            
            
            500
            
            
            
            44,433
            
            
            
            —
            
            
            
            44,933





(continued)





See Notes
to Condensed Consolidated Financial Statements




-7-


SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


FROM INCEPTION ON JULY 1,
1998 THROUGH SEPTEMBER 30, 2009


(unaudited)




Common
      Stock
            
            
            Capital
      in Excess of Par Value
            
            
            Deficit
      Accumulated During the Development Stage
            
            
            TotalShares
            
            
            AmountIssuance
      of common stock in connection with the Company’s short term incentive plan
      during the year ended June 30, 2009
            
            
            112,700
            
            
            
            1,127
            
            
            
            (1,127
            )
            
            
            —
            
            
            
            —Cumulative
      effect of change in accounting principle –implementation of FASB ASC
      815.40
            
            
            —
            
            
            
            —
            
            
            
            (7,931,875
            )
            
            
            4,731767
            
            
            
            (3,200,108
            )Issuance
      of common stock and warrants for cash during the three months ended
      September 30, 2009 at $0.90 per unit
            
            
            1,700,000
            
            
            
            17,000
            
            
            
            1,425,000
            
            
            
            —
            
            
            
            1,442,000Issuance
      of common stock and warrants for satisfaction of accounts payable during
      the three months ended September 30, 2009
            
            
            194,444
            
            
            
            1,944
            
            
            
            259,588
            
            
            
            —
            
            
            
            261,532Warrants
      exercised for cash during the three months ended September 30, 2009 at an
      exercise price of $0.01
            
            
            950,000
            
            
            
            9,500
            
            
            
            —
            
            
            
            —
            
            
            
            9,500Legal
      and regulatory  fees associated with issuances during the three
      months ended September 30, 2009
            
            
            —
            
            
            
            —
            
            
            
            (175,862
            )
            
            
            —
            
            
            
            (175,862
            )Issuance
      of common stock in lieu of cash payment for interest during the three
      months ended September 30, 2009
            
            
            415,867
            
            
            
            4,159
            
            
            
            195,457
            
            
            
            —
            
            
            
            199,616Convertible
      notes converted into common stock during the three months ended September
      30, 2009
            
            
            1,705,284
            
            
            
            17,053
            
            
            
            634,621
            
            
            
            —
            
            
            
            651,674Fair
      market value of options and warrants vested during the three months ended
      September 30, 2009
            
            
            —
            
            
            
            —
            
            
            
            34,527
            
            
            
            —
            
            
            
            34,527Net
      loss
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            $
            (36,139,195
            )
            
            
            (36,139,195
            )Balance
      at September 30, 2009
            
            
            24,777,638
            
            
            $
            247,776
            
            
            $
            35,861,069
            
            
            $
            (31,407,428
            )
            
            $
            4,701,417




See Notes
to Condensed Consolidated Financial Statements.




-8-


SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS


(unaudited)




For
      the Three Months Ended
              September
      30,
            
            
            From
      Inception on July 1, 1998 through
              September
      30,2009
            
            
            2008
            
            
            2009Cash
      flows from operating activities:Net
      loss
            
            $
            (189,296
            )
            
            $
            (1,181,406
            )
            
            $
            (31,407,428
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Noncash
      capital contribution
            
            
            —
            
            
            
            —
            
            
            
            85,179Noncash
      conversion of accrued expenses into equity
            
            
            —
            
            
            
            —
            
            
            
            131,250Noncash
      income related to change in fair value of warrant
liability
            
            
            (1,888,133
            )
            
            
            —
            
            
            
            (6,941,159
            )Issuance
      of common stock and warrants for interest
            
            
            199,616
            
            
            
            264,157
            
            
            
            1,650,329Share-based
      compensation expense
            
            
            34,527
            
            
            
            76,524
            
            
            
            10,237,471Depreciation
      and amortization
            
            
            27,853
            
            
            
            26,280
            
            
            
            600,294Amortization
      of convertible note discount
            
            
            663,637
            
            
            
            133
            
            
            
            1,214,854Amortization
      of deferred financing costs
            
            
            144,278
            
            
            
            105,922
            
            
            
            739,823Loss
      on extinguishment of debt
            
            
            86,532
            
            
            
            —
            
            
            
            86,532(Increase)
      decrease in operating assets:Prepaid
      expense and other current assets
            
            
            44,832
            
            
            
            (603,685
            )
            
            
            (1,116,516
            )Security
      deposit
            
            
            —
            
            
            
            —
            
            
            
            (7,187
            )Increase
      (decrease) in operating liabilities:Accounts
      payable
            
            
            (375,592
            )
            
            
            129,758
            
            
            
            601,088Accrued
      expenses
            
            
            205,271
            
            
            
            72,617
            
            
            
            561,208Other
      liability
            
            
            (1,989
            )
            
            
            (1,761
            )
            
            
            14,028Net
      cash used in operating activities
            
            
            (1,048,464
            )
            
            
            (1,111,461
            )
            
            
            (23,550,234
            )Cash
      flows from investing activities:Patent
      costs
            
            
            (189,332
            )
            
            
            (158,322
            )
            
            
            (4,475,695
            )Redemptions
      (Purchases) of investments, net
            
            
            250,000
            
            
            
            (1,950,000
            )
            
            
            (800,000
            )Purchase
      of property and equipment
            
            
            (1,116
            )
            
            
            -
            
            
            
            (178,179
            )Net
      cash provided by (used in) investing activities
            
            
            59,552
            
            
            
            (2,108,322
            )
            
            
            (5,453,874
            )Cash
      flows from financing activities:Proceeds
      from grant
            
            
            —
            
            
            
            —
            
            
            
            99,728Proceeds
      from issuance of bridge notes
            
            
            —
            
            
            
            —
            
            
            
            525,000Proceeds
      from issuance of common stock, net and exercise of options and
      warrants
            
            
            883,638
            
            
            
            —
            
            
            
            19,966,456Proceeds
      from issuance of convertible notes and warrants, net
            
            
            —
            
            
            
            —
            
            
            
            9,340,000Deferred
      financing costs
            
            
            —
            
            
            
            —
            
            
            
            (651,781
            )Net
      cash provided by financing activities
            
            
            883,638
            
            
            
            —
            
            
            
            29,279,403Net
      (decrease) increase in cash and cash equivalents
            
            
            (105,274
            )
            
            
            (3,219,783
            )
            
            
            275,295Cash
      and cash equivalents at beginning of period
            
            
            380,569
            
            
            
            5,676,985
            
            
            
            —Cash
      and cash equivalents at end of period
            
            $
            275,295
            
            
            $
            2,457,202
            
            
            $
            275,295Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
            
            $
            —
            
            
            $
            —
            
            
            $
            22,317Supplemental
      schedule of noncash financing activity:Conversion
      of convertible notes into common stock, net
            
            $
            653,400
            
            
            $
            —
            
            
            $
            1,198,400Conversion
      of bridge notes into stock
            
            $
            —
            
            
            $
            —
            
            
            $
            534,316Allocation
      of convertible debt proceeds to warrants and beneficial conversion
      feature
            
            $
            —
            
            
            $
            —
            
            
            $
            9,340,000Warrants
      issued for financing costs
            
            $
            —
            
            
            $
            —
            
            
            $
            639,645Issuance
      of common stock for interest on convertible notes
            
            $
            199,616
            
            
            $
            264,157
            
            
            $
            1,650,329Issuance
      of common stock in settlement of accounts payable
            
            $
            175,000
            
            
            $
            —
            
            
            $
            175,000





See Notes
to Condensed Consolidated Financial Statements.




-9-


SENESCO TECHNOLOGIES, INC.
AND SUBSIDIARY


(A DEVELOPMENT STAGE
COMPANY)


NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


(unaudited)




Note
1 - Basis of Presentation:




The
financial statements included herein have been prepared by Senesco Technologies,
Inc. (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 United States generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations.  These
unaudited condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in the Company’s Annual Report on Form 10-K for the fiscal year ended
June 30, 2009.




In the
opinion of the Company’s management, the accompanying unaudited condensed
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 September 30, 2009, the results of its operations for
the three-month periods ended September 30, 2009 and 2008, cash flows for the
three-month periods ended September 30, 2009 and 2008, and the results of its
operations and cash flows for the period from inception on July 1, 1998 through
September 30, 2009.




Interim
results are not necessarily indicative of results for the full fiscal
year.




Note
2 – Liquidity:




There is
substantial doubt about the Company’s ability to continue as a going concern due
to its limited assets, capital and recurring losses as explained in the
following paragraphs.




As shown
in the accompanying consolidated financial statements, the Company has a history
of losses with a deficit accumulated during the development stage from July 1,
1998 (inception) through September 30, 2009 of
$31,407,428.  Additionally, the Company has generated minimal revenues
by licensing its technology for certain crops to companies willing to share in
its development costs. In addition, the Company’s technology may not be ready
for commercialization for several years. The Company expects to continue to
incur losses for the next several years because it anticipates that its
expenditures on research and development, and administrative activities will
significantly exceed its revenues during that period. The Company cannot predict
when, if ever, it will become profitable.




As of
September 30, 2009, the Company had cash and investments in the amount of
$1,075,295, which consisted of money market funds and U.S. treasury bills plus
an additional $480,000 in stock subscriptions receivable.  The Company
estimates that such amount will cover its expenses for approximately the next
three months from September 30, 2009.  The accompanying financial
statements do not include any adjustment from the outcome of this
uncertainty.




These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  The Company’s continuation as a going concern is
dependent upon its ability to ultimately attain profitable operations, generate
sufficient cash flow to meet its obligations and  obtain additional
financing as may be required to comply with regulatory
requirements.  The outcome of these uncertainties cannot be
assured.




-10-




The
Company will need additional capital and plans to raise additional capital
through the placement of debt instruments or equity or both.  However,
the Company may not be able to obtain adequate funds for its operations when
needed or on acceptable terms.  If the Company is unable to raise
additional funds, it will need to do one or more of the following:




·
            delay,
      scale-back or eliminate some or all of its research and product
      development programs;


·
            license
      third parties to develop and commercialize products or technologies that
      it would otherwise seek to develop and commercialize
    itself;


·
            seek
      strategic alliances or business
combinations;


·
            attempt
      to sell the Company;


·
            cease
      operations; or


·
            declare
      bankruptcy.




Note
3 – Intangible Assets:




The
Company conducts research and development activities, the cost of which is
expensed as incurred, in order to generate patents that can be licensed to third
parties in exchange for license fees and royalties.  Because the
patents are the basis of the Company’s future revenue, the patent costs are
capitalized.   The capitalized patent costs represent the outside
legal fees incurred by the Company to submit and undertake all necessary efforts
to have such patent applications issued as patents.




The
length of time that it takes for an initial patent application to be approved is
generally between four to six years.  However, due to the unique
nature of each patent application, the actual length of time may
vary.  If a patent application is denied, the associated cost of that
application would be written off.  However, the Company has not had
any patent applications denied as of September 30,
2009.  Additionally, should a patent application become impaired
during the application process, the Company would write down or write off the
associated cost of that patent application.




Issued
patents and agricultural patent applications pending are being amortized over a
period of 17 years, the expected economic life of the patent.




The
Company assesses the impairment in value of intangible assets whenever events or
circumstances indicate that their carrying value may not be
recoverable.  Factors the Company considers important which could
trigger an impairment review include the following:




·
            significant
      negative industry trends;


·
            significant
      underutilization of the assets;


·
            significant
      changes in how the Company uses the assets or its plans for their use;
      and


·
            changes
      in technology and the appearance of competing
  technology.




If the
Company’s review determines that the future discounted cash flows related to
these assets will not be sufficient to recover their carrying value, the Company
will reduce the carrying values of these assets down to its estimate of fair
value and continue amortizing them over their remaining useful
lives.  To date, the Company has not recorded any impairment of
intangible assets.




-11-




Note
4 - 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.  Shares to be issued
upon the exercise of the outstanding options and warrants aggregating 26,480,205
and 23,518,284 as of September 30, 2009 and 2008, respectively, are not included
in the computation of net loss per share, as their effect is
anti-dilutive.  Additionally, as of September 30, 2009, 15,528,096
shares to be issued upon the conversion of convertible notes are not included in
the computation of diluted net loss per share, as their effect is
anti-dilutive.




Note
5 – Share-Based Transactions:




The terms
and vesting schedules for share-based awards vary by type of grant and the
employment status of the grantee.  Generally, the awards vest based
upon time-based conditions.




The fair
value of each stock option and warrant granted or vesting has been determined
using the Black-Scholes model.  The material factors incorporated in
the Black-Scholes model in estimating the value of the options and warrants
include the following:




Three
      Months Ended September 30,2009
            
            2008Estimated
      life in years
            3.5-5.5
            
            4-6Risk-free
      interest rate (1)
            1.3%–1.8%
            
            2.98%Volatility
            100%
            
            100%Dividend
      paid
            None
            
            None





(1)
            Represents
      the interest rate on a U.S. Treasury security with a maturity date
      corresponding to that of the option
term.




The
economic values of the options will depend on the future price of the Company’s
common stock, par value $0.01 (the “Common Stock”), which cannot be forecast
with reasonable accuracy.




A summary
of changes in the stock option plan for the three month period ended September
30, 2009 is as follows:




Number
      of Options
            
            
            Weighted-Average
      Exercise PriceOutstanding
      at July 1, 2009
            
            
            4,550,412
            
            
            $
            1.70Granted
            
            
            —
            
            
            
            —Exercised
            
            
            —
            
            
            
            —Expired
            
            
            (229,000
            )
            
            
            3.50Outstanding
      at September 30, 2009
            
            
            4,321,412
            
            
            $
            1.60Exercisable
      at September 30, 2009
            
            
            3,438,412
            
            
            $
            1.80




-12-




A summary
of changes to the non-vested stock options for the three month period ended
September 30, 2009 is as follows:




Weighted-AverageNumber
      of Options
            
            
            Grant-Date
                Fair
      ValueNon-vested
      stock options at July 1, 2009
            
            
            883,000
            
            
            $
            0.66Granted
            
            
            —
            
            
            
            —Vested
            
            
            —
            
            
            
            —Expired
            
            
            
            
            
            
            —Non-vested
      stock options at September 30, 2009
            
            
            883,000
            
            
            $
            0.66





As of
September 30, 2009, the aggregate intrinsic value of stock options outstanding
was $996, with a weighted-average remaining term of 6.0 years.  The
aggregate intrinsic value of stock options exercisable at that same date was
$996, with a weighted-average remaining term of 5.3 years.  As of
September 30, 2009, the Company has 4,887,472 shares available for future stock
option grants.




As of
September 30, 2009, total compensation expense not yet recognized related to
stock option grants and restricted stock units amounted to approximately
$63,000, which will be
recognized over the next 15 months, and an additional $640,000 which may be
recognized as achievement of certain target goals under the Company’s Long-Term
Incentive Program become probable over the next 18 months.




Short-Term
Incentive Program




On
November 19, 2008, upon recommendation of the Company’s Compensation Committee,
the Board adopted a Short-Term Equity Incentive Program for each of Bruce C.
Galton, John E. Thompson, Ph.D., Joel Brooks, Richard Dondero and Sascha
Fedyszyn.  The Programs are intended to ensure the achievement of
certain goals of the Company, continuity of the Company’s executive management,
and to align the interests of the executive management with those of the
shareholders.




Pursuant
to and as defined in the Short-Term Equity Incentive Program, each executive
would be awarded shares of the Company’s Common Stock, or options to acquire
shares of the Company’s Common Stock, if the Company achieves certain target
goals relating to research, financing, licensing, investor relations and other
administrative items during the fiscal year ending June 30, 2009.




The
number of eligible shares and options to be awarded to the executive is based
upon the following weightings:




1.
            25%
      of eligible shares and options for contributions relating to the Company’s
      Human Health Objectives;




2.
            15%
      of eligible shares and options for contributions relating to the Company’s
      Finance Objectives;




-13-




3.
            20%
      of eligible shares and options for contributions relating to the Company’s
      Agricultural Licensing Objectives;




4.
            25%
      of eligible shares and options for contributions relating to the Company’s
      Investor Relations, Intellectual Property and Website Administration;
      and




5.
            15%
      of the eligible shares and options relating to the Company’s
      Organizational Objectives.




If the
target goals are achieved by the Company, the executive officers would be
awarded the following number of shares and options for the fiscal year ended
June 30, 2009:




Number of Shares
            
            
            Number of
              Options(1)Bruce
      C. Galton
            
            
            66,000
            
            
            
            —John
      E. Thompson, Ph.D.
            
            
            —
            
            
            
            48,000Joel
      Brooks
            
            
            28,000
            
            
            
            —Richard
      Dondero
            
            
            —
            
            
            
            80,000Sascha
      P. Fedyszyn
            
            
            42,000
            
            
            
            —Total
            
            
            136,000
            
            
            
            128,000





(1)
            Such
      options are exercisable at a strike price of $0.60, which represents the
      closing price of the common stock on November 18,
  2008.




As of
September 30, 2009, the Company has determined that the achievement of the
target goals is probable.  The total amount of compensation expense in
connection with the short-term incentive program in the amount of $140,480 had
been recorded ratably over the seven and one-half month period from November 19,
2008 through June 30, 2009.




In
October 2009, after a review of each of the factors that compromise the
short-term award program, the compensation committee determined that the
executive officers had partially achieved the previously granted short-term
performance milestones, and accordingly, determined to vest, effective two
trading days following the Company’s filing of this quarterly report on
Form 10-Q for the quarter ended September 30, 2009, the foregoing
RSUs/options as follows:




Mr. Galton
will receive shares of common stock underlying his 49,500 RSUs;


Mr. Brooks
will receive shares of common stock underlying his 26,600 RSUs;


Mr. Fedyszyn
will receive shares of common stock underlying his 39,900 RSU;


Dr. Thompson
received 48,000 options; and


Mr. Dondero
received 76,000 options.




Long-Term
Incentive Program




On
December 13, 2007, upon recommendation of the Company’s Compensation Committee,
the Board adopted a Long-Term Equity Incentive Program for the members of the
executive management team.  The Long-Term Equity Incentive Program is
intended to ensure the achievement of certain goals of the Company, continuity
of the Company’s executive management, and to align the interests of the
executive management with those of the shareholders.




-14-




Pursuant
to and as defined in the Long-Term Equity Incentive Program, each executive
would be awarded shares of the Company’s Common Stock and options to acquire
shares of the Company’s Common Stock if the Company achieves certain target
goals relating to its Multiple Myeloma research project over
the  three fiscal year period from the date of adoption.




The
number of eligible shares and options to be awarded to the executives is based
upon the following weightings:




1.
            20%
      of the eligible shares upon the execution of a research agreement to
      conduct a phase I/II clinical trial at a research
  facility;




2.
            20%
      of the eligible shares upon the filing and acceptance by the FDA of an
      investigational new drug application;
and




3.
            60%
      of the eligible shares upon the successful completion of a FDA approved
      phase I/II clinical trial .




If the
target goals are achieved by the Company, the executive officers would be
awarded the following number of shares and options :




Goal
      1
            
            
            Goal
      2
            
            
            Goal
      3Number of
      SharesBruce
      C. Galton
            
            
            25,000
            
            
            
            25,000
            
            
            
            75,000Joel
      Brooks
            
            
            10,000
            
            
            
            10,000
            
            
            
            30,000Sascha
      P. Fedyszyn
            
            
            10,000
            
            
            
            10,000
            
            
            
            30,000Total
      number of shares
            
            
            45,000
            
            
            
            45,000
            
            
            
            135,000Number of
      Options(1)John
      E. Thompson, Ph.D.
            
            
            50,000
            
            
            
            50,000
            
            
            
            150,000Richard
      Dondero
            
            
            60,000
            
            
            
            60,000
            
            
            
            180,000Total
      number of options
            
            
            110,000
            
            
            
            110,000
            
            
            
            330,000





(1)
            Such
      options are exercisable at a strike price of $0.99, which represents the
      closing price of the common stock on December 12,
  2007.




As of
September 30, 2009, the Company is not able to determine if the achievement of
the target goals under the Long-Term Equity Incentive Program are probable and,
therefore, has not yet begun to recognize any of the $640,000 compensation
expense that was computed on the date of adoption of the Long-Term Equity
Incentive Program.  The Company will begin recognizing such
compensation expense ratably over the remaining term of the Long-Term Equity
Incentive Program at such time that the Company is able to determine that the
achievement of the target goals are probable.




Note 6 – Revenue
Recognition:




The
Company receives certain nonrefundable upfront fees in exchange for the transfer
of its technology to licensees.  Upon delivery of the technology, the
Company has no further obligations to the licensee with respect to the basic
technology transferred and, accordingly, recognizes revenue at that
time.  The Company may, however, receive additional payments from its
licensees in the event such licensees achieve certain development or
commercialization milestones in their particular field of use.  Other
nonrefundable upfront fees and milestone payments, where the milestone payments
are a function of time as opposed to achievement of specific achievement-based
milestones, are deferred and amortized ratably over the estimated research
period of the license.  Milestone payments, which are contingent upon
the achievement of certain research goals, are recognized as revenue when the
milestones, as defined in the particular agreement, are achieved.




-15-




Note
7 –Convertible Notes and Stockholders Equity:




Convertible
Notes





During
the year ended June 30, 2008, the Company issued $5,000,000 of convertible notes
and warrants to YA Global Investments L.P. (“YA Global”) and $5,000,000 of
convertible notes and warrants to Stanford Venture Capital Holdings, Inc.
(“Stanford”), for aggregate gross proceeds in the amount of
$10,000,000.  The convertible notes were and are convertible into the
Company’s Common Stock at a fixed price of $0.90 per share, subject to certain
adjustments (the “Fixed Conversion Price”), through August 1, 2009 and December
20, 2009, respectively, at which time the convertible notes may convert into
shares of the Company’s Common Stock at the lower of the fixed conversion price
or 80% of the lowest daily volume-weighted average price (the “VWAP”) of the
common stock during the five trading days prior to the conversion date. In July
and September 2009, the fixed conversion price was adjusted to $0.85 and $0.83,
respectively, due to the issuance of common stock and
warrants.   The maturity date of each of the convertible notes
for YA Global and Stanford is December 30, 2010 and December 31, 2010,
respectively.




The
convertible notes accrue interest on their outstanding principal balances at an
annual rate of 8%.  The Company has the option to pay interest in cash
or, upon certain conditions, common stock.  If the Company pays
interest in Common Stock, the stock will be valued at a 10% discount to the
average daily VWAP for the five day trading period prior to the interest payment
date (the “Interest Shares”).




At the
Company’s option, it can redeem a portion of, or all of, the principal owed
under the convertible notes by providing the investors with at least 30 business
days’ written notice, provided that, at the time of receipt of the notice,
either: (A)(i) the VWAP of the Common Stock exceeds 130% of the Fixed Conversion
Price for at least 20 of 30 prior trading days, and (ii) there is an
effective registration statement for the resale of the Common Stock that will be
issued under the redemption or (B) it redeems a portion, or all, of the
principal owed at a 20% premium above the principal then outstanding and any
accrued interest thereupon.  If the Company redeems all or any of the
principal outstanding under the convertible notes, it will pay an amount equal
to the principal being redeemed plus accrued interest.




The
Company has the option to force the investors to convert 50% and 100% of its
then-outstanding convertible notes if its Common Stock price exceeds 150% and
175% of the Fixed Conversion Price, respectively, for any 20 out of 30 trading
days; provided that such forced conversion meets certain conditions (the “Call
Option”).  If the Company exercises its Call Option prior to the third
anniversary of the signing date, it will issue additional warrants to the
investor equal to 50% of the number of shares underlying the convertible note
subject to the forced conversion.  These warrants will be exercisable
at the fixed conversion price and will have the same maturity as the other
warrants issued under the financing.




-16-




The
Company’s obligations under the convertible notes are secured by all of its and
its subsidiary’s assets and intellectual property, as evidenced by certain
security agreements and certain patent security agreements by and between the
Company and each of YA Global and Stanford.  Pursuant to a
subordination agreement, YA Global is the senior secured creditor.




The
conversion rate of each convertible note is subject to adjustment for certain
events, including dividends, stock splits, combinations and the sale of the
Company’s Common Stock or securities convertible into or exercisable for the
Company’s Common Stock at a price less than the then applicable conversion or
exercise price.




The
investors have a right of first refusal on any future funding that involves the
issuance of the Company’s capital stock for so long as a portion of the
convertible notes are outstanding.




Pursuant
to the Registration Rights Agreement, the Company filed an initial registration
statement on October 12, 2007 to register 3,333,333 shares of common stock,
underlying the convertible notes, issuable to YA Global, and such registration
statement became effective on November 1, 2007.




The
convertible notes and warrants issued to YA Global are subject to a maximum cap
of 30,500,000 on the number of shares of common stock that can be issued upon
the conversion of the convertible notes, the exercise of the warrants and the
issuance of interest shares.




The
convertible notes and warrants issued to Stanford are subject to a maximum cap
of 31,888,888 on the number of shares of common stock that can be issued upon
the conversion of the convertible notes, the exercise of the warrants and the
issuance of interest shares.




Currently,
the number of shares of common stock issuable upon conversion of the remaining
$8,801,600 of convertible notes outstanding and shares of common stock to be
issued upon exercise of the warrants outstanding at September 30, 2009
represents, in the aggregate, approximately 29,442,000 shares, plus an estimated
additional 2,200,000 shares (based upon the stock price at September 30, 2009)
for the payment of interest in stock under the convertible notes.




As of
September 30, 2009, the outstanding balance of the convertible notes was
$18,179, which is comprised of notes with an aggregate face amount of $8,801,600
less unamortized debt discount of $8,783,421.  Debt discount
associated with the convertible notes is amortized to interest expense, using
the effective yield method, over the remaining life of the convertible
notes.  Upon conversion of the convertible notes into Common Stock,
any unamortized debt discount relating to the portion converted will be charged
to interest.  Total charges to interest for amortization of debt
discount were $663,322 for the three month period ended September 30,
2009.




The costs
associated with the issuances in the amount of $1,291,427 have been recorded as
deferred financing costs and are being amortized ratably over the term of the
convertible notes.  The balance of deferred financing costs as of
September 30, 2009 amounted to $488,046.




-17-




Effective
July 1, 2009, the Company adopted the provisions of FASB ASC 815.40,
“Determining Whether an Instrument (or Embedded Feature) is Indexed to an
Entity’s Own Stock.  FASB ASC 815.40 applies to any freestanding
financial instruments or embedded features that have the characteristics of a
derivative, as defined by SFAS No. 133, “Accounting for Derivative Instruments
and Hedging Activities”, and to any freestanding financial instruments that are
potentially settled in an entity’s own common stock.  As a result of
adopting FASB ASC 815.40, as of July 1, 2009, 6,941,666 of the Company’s issued
and outstanding common stock warrants previously accounted for as equity
pursuant to the derivative treatment exemption should no longer be accounted for
as equity.  As such, effective July 1, 2009, the Company reclassified
the fair value of these common stock purchase warrants, which have exercise
price reset features, from equity to a liability.  On July 1, 2009,
using the black sholes valuation model, the Company reclassified, as a
cumulative effect adjustment, the difference in fair value of $4,731,767, which
represents the difference between the fair value on the dates of issuance of
$7,931,875 and the fair value on July 1, 2009 of $3,200,108 from additional paid
in capital to deficit accumulated during the development
stage.  Additionally, the Company recorded a warrant liability in the
amount of $3,200,108 to recognize the fair value of such warrants at July
1, 2009. The effect on the net loss for the three month period ending September
30, 2008, would have been a reduction of $3,311,174 which would have resulted in
net income of $2,129,768. The effect on the basic net loss per common share
would have been a reduction of $0.18, which would have resulted in basic net
income per common share of $0.12.  On September 30, 2009, the
Company revalued the warrants, using the black sholes valuation model, and the
resulting liability to $1,311,975,  The change in value of the
liability of $1,888,133 was recorded as income for the three months ended
September 30, 2009 (which reduced the basic and diluted net loss per share by
$0.09).  The assumptions used to value the warrants were as
follows:




July
      1,
                2009
            
            
            September
      30,
                2009Estimated
      life in years
            
            
            3
            
            
            
            2.75Risk-free
      interest rate (1)
            
            
            1.57
            %
            
            
            1.45
            %Volatility
            
            
            100
            %
            
            
            100
            %Dividend
      paid
            
            None
            
            
            None





(1)
            Represents
      the interest rate on a U.S. Treasury security with a maturity date
      corresponding to that of the option
term.




Common
Stock




Transaction with Partlet
Holdings




On July
9, 2009, the Company entered into a Securities Purchase Agreement (the “Partlet
Securities Purchase Agreement”) with Partlet Holdings Ltd., which is an
accredited investor, pursuant to which the Company issued an aggregate of
1,111,111 shares (the “Shares”) of the Company’s common stock at $0.90 per share
and each of a Series A warrant (the “Partlet Series A Warrant”) and a Series B
warrant (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
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 from the date of grant.




-18-




On July 9, 2009, the Company closed
on $950,000 of aggregate proceeds of the private placement and, on that date,
issued (i) a total of 1,055,555 Shares (ii) a Partlet Series A Warrant to
purchase 950,000 shares of the Company’s common stock, which was exercised on
July 14, 2009, and (iii) a Partlet Series B Warrant to purchase 1,952,778 shares
of the Company’s common stock.  On September 30, 2009, the Company
closed on the remaining $50,000 in proceeds upon the Company receiving approval
from the Company’s stockholders and the NYSE Amex Exchange for certain aspects
of the transaction.





Transaction with Each of
Robert and Tim Forbes


On July
29, 2009, the Company entered into a Securities Purchase Agreement, (the “Forbes
Securities Purchase Agreement”) with each of Robert Forbes and Timothy Forbes,
each of whom is an accredited investor, pursuant to which the Company issued an
aggregate of 444,444 shares of common stock at $0.90 (the “Shares”) per share
and each of a Series A warrant, (the “Forbes Series A Warrants”), and a Series B
warrant (the “Forbes Series B Warrants”).  Each of Robert Forbes and
Timothy Forbes are the brothers of Christopher Forbes who is a director of
Senesco.  Mr. Christopher Forbes will not be deemed to be the
beneficial owner of, nor will he have a pecuniary interest in the Shares or
Warrants issued to his brothers.




The
Forbes Series A Warrants entitle the holders to purchase, in the aggregate, up
to 400,000 shares of the Company’s common stock at $0.01 per warrant
share.  The Forbes Series A Warrants have a term of seven years and are
exercisable immediately after the date of grant.




The
Forbes Series B Warrants entitle the holders to purchase, in the aggregate, up
to 405,556 shares of the Company’s common stock at $0.60 per warrant
share.  The Forbes Series B Warrants have a term of seven years and are not
exercisable until after the six-month anniversary from the date of
grant.




Transaction with Insiders
and Affiliates


On July
29, 2009, the Company entered into a Securities Purchase Agreement, (the
“Affiliate’s Securities Purchase Agreement”) with each of Harlan W. Waksal,
M.D., Rudolf Stalder, Christopher Forbes, David Rector, John N. Braca, Jack Van
Hulst, Warren Isabelle and the Thomas C. Quick Charitable Foundation (the
“Affiliate Investors”) each of whom is an accredited investor, pursuant to which
the Company issued an aggregate of 144,444 Shares of the Company’s common stock
at $0.90 per share and each of a Series A warrant, (the “Affiliate’s Series A
Warrants”), and a Series B warrant (the “Affiliate’s Series B
Warrants”).  Each of Harlan W. Waksal, M.D., Rudolf Stalder,
Christopher Forbes, David Rector, John N. Braca, Jack Van Hulst and Warren
Isabelle serve on the Company’s board.  The Thomas C. Quick Charitable
Foundation is an affiliate of our board member Thomas C. Quick.




The
Affiliate’s Series A Warrants entitle the holders to purchase in the aggregate,
up to 130,000 shares of the Company’s common stock at $0.01 per warrant
share.  The Affiliates Series A Warrants have a term of seven years and are
exercisable immediately after the date of grant.




The
Affiliate’s Series B Warrants entitle the holders to purchase, in the aggregate,
up to 131,807 shares of the Company’s common stock at $0.60 per warrant
share.  The Affiliate’s Series B Warrants have a term of seven years and
are not exercisable until after the six-month anniversary from the date of
grant.




-19-




Transaction with Cato
Research Ltd.


On July
29, 2009, the Company entered into a Securities Agreement with Cato Holding
Company (“Cato”), who is an accredited investor, pursuant to which the Company
issued an aggregate of 194,444 Shares of the Company’s common stock at $0.90 per
share and each of a Series A warrant (the “Cato Series A Warrant”) and a Series
B warrant (the “Cato Series B Warrant”).  The Shares were issued to
Cato in exchange for debt that was owed by us to Cato Research Ltd. in the
amount of $175,000.  Cato Research Ltd. is an affiliate of
Cato.




The Cato
Series A Warrant entitles the holder to purchase in the aggregate, up to 175,000
shares of the Company’s common stock at $0.01 per warrant share.  The Cato
Series A Warrant has a term of seven years and is exercisable immediately after
the date of grant.




The Cato
Series B Warrant entitles the holder to purchase, in the aggregate, up to
177,431 shares of the Company’s common stock at $0.60 per warrant share. 
The Cato Series B Warrant has a term of seven years and is not exercisable until
after the six-month anniversary from the date of grant.




The
foregoing transactions were closed upon the Company receiving approval from
the Company’s stockholders and the NYSE Amex Exchange for certain aspects of the
transactions on September 30, 2009 and
$480,000 of the proceeds were recorded as a subscription receivable; of which,
$392,000 was received in October 2009. The balance of $88,000 has been recorded
as a reduction to additional paid in capital and is expected to be received by
the end of November 2009.




As a
result of the transaction with Cato, the Company valued the common stock and
warrants issued to Cato in the amount of $261,532 and recorded a loss on the
extinguishment of debt in the amount of $86,532 during the three month period
ended September 30, 2009.




Note
8 – Income Taxes:




No
provision for income taxes has been made for the three month periods ended
September 30, 2009 and 2008 given the Company’s losses in 2009 and 2008 and
available net operating loss carryforwards.  A benefit has not been
recorded as the realization of the net operating losses is not assured and the
timing in which the Company can utilize its net operating loss carryforwards in
any year or in total may be limited by provisions of the Internal Revenue Code
regarding changes in ownership of corporations.




Note
9 – Effects of New Accounting Pronouncements Applicable to the
Company




FASB
ASC 808-10 – Accounting for Collaborative Arrangements




This
pronouncement defines a collaborative arrangement as a contractual arrangement
that involves a joint operating activity that involves two or more parties who
are both active participants in the activity and exposed to significant risks
and rewards dependent on the commercial success of the activity.  The
pronouncement also defines how the costs incurred and revenues generated from
transactions with third parties should be recorded and presented in each
entity’s income statement.  This pronouncement is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years, and shall be applied
retrospectively to all prior periods presented for all collaborative
arrangements existing as of the effective date.  The Company does not
believe that this pronouncement will have any material effect on its financial
statements.




-20-




Note
10 – Subsequent Events:




The
Company has evaluated subsequent events through November 16, 2009, the date
these financial statements were filed, and determined that there were no events
or transactions occurring subsequent to September 30, 2009 that would have a
material impact on the Company’s consolidated financial statements and that
there were no events or transactions occurring subsequent to September 30, 2009
that would require disclosure.




-21-


Item
2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.




The
following discussion and analysis should be read in conjunction with our
condensed consolidated financial statements and the related notes thereto
included in this Quarterly Report on Form 10-Q.  The discussion and
analysis may contain forward-looking statements that are based upon current
expectations and entail various risks and uncertainties.  Our actual
results and the timing of events could differ materially from those anticipated
in the forward-looking statements as a result of various factors, including
those set forth under “Factors That May Affect Our Business, Future Operating
Results and Financial Condition” and elsewhere in this report.




Overview




Our
Business




The
primary business of Senesco Technologies, Inc., a Delaware corporation
incorporated in 1999, and its wholly-owned subsidiary, Senesco, Inc., a New
Jersey corporation incorporated in 1998, collectively referred to as “Senesco,”
“we,” “us” or “our,” is to utilize our patented and patent-pending genes,
primarily eucaryotic translation initiation Factor 5A, or Factor 5A, and
deoxyhypusine synthase, or DHS, and related technologies for inhibition in human
health applications to develop novel approaches to treat inflammatory diseases
and cancer.


In
agricultural applications we are developing and licensing Factor 5A, DHS and
Lipase to enhance the quality and productivity of fruits, flowers, and
vegetables and agronomic crops through the control of cell death, referred to
herein as senescence, and growth in plants.




Human
Health Applications




We
believe that our gene technology could have broad applicability in the human
health field, by either inhibiting or inducing apoptosis.  Inhibiting
apoptosis may be useful in preventing or treating a wide range of inflammatory
and ischemic diseases attributed to premature 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.




We have
commenced preclinical in-vivo and in-vitro research to
determine the ability of Factor 5A to regulate key execution genes,
pro-inflammatory cytokines, receptors, and transcription factors, which are
implicated in numerous apoptotic diseases.





Certain
preclinical human health results to date include:




·
            Performing
      efficacy, toxicological and dose-finding studies in mice for our potential
      multiple myeloma drug candidate, SNS-01.  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.




-22-




·
            demonstrated
      significant tumor regression and diminished rate of tumor growth of
      multiple myeloma tumors in SCID mice treated with Factor 5A technology
      encapsulated in nanoparticles;




·
            increased
      median survival by approximately 250% in a tumor model of mice injected
      with melanoma cancer cells;




·
            induced
      apoptosis in both human cancer cell lines derived from tumors and in lung
      tumors in mice;




·
            induced
      apoptosis of cancer cells in a human multiple myeloma cell line in the
      presence of IL-6;




·
            measured
      VEGF reduction in mouse lung tumors as a result of treatment with our
      genes;




·
            decreased
      ICAM and activation of NFkB in cancer cells employing siRNA against Factor
      5A;




·
            increased
      the survival rate in H1N1 mouse influenza survival studies from 14% in
      untreated mice to 52% in mice treated with our siRNA against Factor
      5A.  Additionally, the treated mice reversed the weight loss
      typically seen in infected mice and had other reduced indicators of
      disease severity as measured by blood glucose and liver
      enzymes.




·
            increased
      the survival, while maintaining functionality, of mouse pancreatic islet
      cells isolated for transplantation, using 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




·
            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.




-23-





Accelerating
Apoptosis




The data
from our pre-clinical studies indicate that the up-regulation of Factor 5A
induces cell death in cancer cells through both the p53 (intrinsic) and cell
death receptor (extrinsic) apoptotic pathways. Tumors arise when abnormal cells
fail to undergo apoptosis due to an inability to activate their apoptotic
pathways. Just as the Factor 5A gene appears to facilitate expression of the
entire suite of genes required for programmed cell death in plants, the Factor
5A gene appears to regulate expression of a suite of genes required for
programmed cell death in human cells. Because the Factor 5A gene appears to
function at the initiation point of the apoptotic pathways, both intrinsic and
extrinsic, we believe that our gene technology has potential application as a
means of combating a broad range of cancers.  Based on the results
obtained through our in-vitro studies, we have
found that up-regulating Factor 5A results in: (i) the up-regulation of p53;
(ii) increased inflammatory cytokine production; (iii) increased cell death
receptor formation; and (iv) increased caspase activity.  These
features, coupled with a simultaneous down-regulation Bcl-2, result in apoptosis
of cancer cells.  In addition, our in-vitro studies have shown
that the up-regulation of Factor 5A also down-regulates VEGF, a growth factor
which allows tumors to develop additional vascularization needed for growth
beyond a small mass of cells.




Inhibiting
Apoptosis




Our
preclinical studies indicate that down-regulation of our proprietary Factor 5A
gene may have potential application as a means for controlling the effects of a
broad range of diseases that are attributable to premature cell death, ischemia,
or inflammation. Such inflammatory diseases include glaucoma, heart disease, and
other certain inflammatory diseases such as Crohn’s disease, sepsis and diabetic
retinopathy.  We have performed preclinical research of certain
inflammatory diseases. Using small inhibitory RNA’s, or siRNA’s, against Factor
5A to inhibit its expression, the results of our studies have indicated a
reduction in pro-inflammatory cytokine formation and the formation of receptors
for LPS, interferon-gamma and TNF-alpha.  Our studies have also
indicated that by inhibiting Factor 5A, iNOS, MAPK, NFkB, JAK1 and ICAM are
downregulated, which decreases the inflammatory cytokines formed through these
pathways. Additionally, a mouse study has indicated that our siRNA is comparable
to a steroid and to a prescription anti-TNF drug in its ability to reduce
cytokine response to LPS.  Other mouse studies have also indicated
that the siRNA against Factor 5A (i) protects thymocyte cells from apoptosis and
decreases formation of MPO, TNF-a, MIP-1alpha, and IL-1 in the lungs of mice
challenged with LPS and (ii) increases the survival rate in which sepsis was
induced by a lethal injection of LPS and (iii) reduces blood serum levels of
inflammatory proteins, such as IL-1, IL-2, IL-6, IL-12, TNF-a, IFNg and
MIP-1alpha, while not effecting IL-10, an anti-inflammatory
cytokine.  Other experiments utilizing siRNA to Factor 5A include
inhibition of or apoptosis during the processing of mouse pancreatic beta islet
cells for transplantation, the inhibition of early inflammatory changes
associated with type-1 diabetes in an in-vivo rat model.




Proteins
required for cell death include p53, interleukins, TNF-a and other cytokines and
caspases.  Expression of these cell death proteins is required for the
execution of apoptosis.  Based on our studies, we believe that
down-regulating Factor 5A by treatment with siRNA inhibits the expression of
p53, a major cell death transcription factor that in turn controls the formation
of a suite of other cell death proteins.  In addition, we believe that
the down-regulation of Factor 5A up-regulates Bcl-2, a suppressor of
apoptosis.




-24-




Human
Health Target Markets




We
believe that our gene technology may have broad applicability in the human
health field, by either inhibiting or accelerating
apoptosis.  Inhibiting apoptosis may be useful in preventing or
treating a wide range of inflammatory and ischemic diseases attributed to
premature apoptosis, including diabetes, diabetic retinopathy and lung
inflammation, among others.  Accelerating apoptosis may be useful in
treating certain forms of cancer because the body’s immune system is not able to
force cancerous cells to undergo apoptosis.




Our
preclinical research has yielded data that we have presented to various
biopharmaceutical companies that may be prospective licensees for the
development and marketing of potential applications of our
technology.  Additionally, we are using the proceeds of our most
recent financing to advance our research in multiple myeloma with the goal of
initiating a Phase I clinical trial, and may select additional human health
indications to bring into clinical trials. We believe that the success of our
future operations will likely depend on our ability to transform our research
and development activities into a commercially feasible technology.




Human
Health Research Program




Our human
health research program, which has consisted of pre-clinical in-vitro and in-vivo experiments designed
to assess the role and method of action of the Factor 5A genes in human
diseases, is being performed by approximately ten (10) third party researchers,
at our direction, at  Mayo Clinic and the University of
Waterloo.




Our
research and development expenses incurred on human health applications were
approximately 75% of our total research and development expenses for the three
months ended September 30, 2009.  Our research and development
expenses incurred on human health applications were approximately 66% of our
total research and development expenses for the three months ended September 30,
2008.  Since inception, the proportion of our research and development
expenses on human health applications has increased, as compared to our research
and development expenses on agricultural applications.  This change is
primarily due to the fact that our research focus on human health has increased
and some of our research costs for plant applications have shifted to our
license partners.




Our
planned future pre-clinical research and development initiatives for human
health include:




·
            Multiple
      Myeloma.  Our objective is to advance our technology for the
      potential treatment of multiple myeloma with the goal of initiating a
      clinical trial.  In connection with the potential clinical
      trial, we have engaged a clinical research organization, or CRO, to assist
      us through the process.  We have also determined the delivery
      system for our technology, contracted for the supply of pharmaceutical
      grade materials to be used in toxicology and human studies, performed
      certain toxicology studies, and have contracted with a third party
      laboratory to conduct additional toxicology studies.  Together
      with the assistance of our CRO, we will have additional toxicology studies
      performed with the goal of filing an investigational new drug application,
      or IND application, with the U.S. Food and Drug Administration, or FDA,
      for their review and consideration in order to initiate a clinical
      trial.  Assuming that we have adequate funding, we estimate that
      it will take approximately twelve (12) months from September 30, 2009 to
      complete these objectives.




-25-




·
            Lung
      Inflammation.  A mouse model system has been conducted to
      illustrate the siRNA to Factor 5A’s ability to reduce morbidity and
      mortality of lung inflammation caused by the up-regulation of
      pro-inflammatory cytokines induced by a
  pathogen.




·
            Other.  We
      may continue to look at other disease states in order to determine the
      role of Factor 5A.




In order
to pursue the above research initiatives, as well as other research initiatives
that may arise, we recently completed private placements in the amount of $1.5
million of common stock and warrants and issued common stock and warrants in
exchange for $0.2 million of accounts payable.  It will be necessary
for us to raise a significant amount of additional working capital in the near
future to continue to pursue some of the above initiatives as well as new
initiatives, if any.  If we are unable to raise the necessary funds,
we may be required to significantly curtail the future development of some of
our research initiatives and we will be unable to pursue other possible research
initiatives.




We may
further expand our research and development program beyond the initiatives
listed above to include other research centers.




Human
Health Competition




Our
competitors in human health that are presently attempting to distribute their
technology have generally utilized one of the following distribution
channels:




·
            Entering
      into strategic alliances, including licensing technology to major
      marketing and distribution partners;
or




·
            developing
      in-house production and marketing
capabilities.




In
addition, some competitors are established distribution companies, which
alleviates the need for strategic alliances, while others are attempting to
create their own distribution and marketing channels.




There are
many large companies and development stage companies working in the field of
apoptosis research including: Amgen Inc., Centocor, Inc., Genzyme Corporation,
OSI Pharmaceuticals, Inc., Novartis AG, Introgen Therapeutics, Inc., Genta,
Incorporated, and Vertex Pharmaceuticals, Inc., amongst others.




-26-




Agricultural
Applications




Our
agricultural research focuses on the discovery and development of certain gene
technologies, which are designed to confer positive traits on fruits, flowers,
vegetables, forestry species and agronomic crops.  To date, we have
isolated and characterized the senescence-induced Lipase gene, DHS, and Factor
5A in certain species of plants. Our goal is to modulate the expression of these
genes in order to achieve such traits as extended shelf life, increased biomass,
increased yield and increased resistance to environmental stresses and disease,
thereby demonstrating proof of concept in each category of crop.




Certain
agricultural results to date include:




·
            longer
      shelf life of perishable produce;




·
            increased
      biomass and seed yield;




·
            greater
      tolerance to environmental stresses, such as drought and soil
      salinity;




·
            greater
      tolerance to certain fungal and bacterial
  pathogens;




·
            more
      efficient use of fertilizer; and




·
            advancement
      to field trials in banana, lettuce, and
trees.




The
technology presently utilized by the industry for increasing the shelf life in
certain flowers, fruits and vegetables relies primarily on reducing ethylene
biosynthesis, and therefore only has application to the crops that are
ethylene-sensitive.  Because Factor 5A, DHS and Lipase are already
present in all plant cells, our technology may be incorporated into crops by
using either conventional breeding methods (non-genetically modified) or
biotechnology techniques.




We have
licensed this technology to various strategic partners and have entered into a
joint venture. We may continue to license this technology, as opportunities
present themselves, to additional strategic partners and/or enter into
additional joint ventures.  Our commercial partners have licensed our
technology for use in turfgrass, canola, corn, soybean, cotton, banana, alfalfa,
rice and certain species of trees and bedding plants, and we have obtained proof
of concept for enhanced post harvest shelf life, seed yield, biomass, and
resistance to disease in several of these plant species.




We have
ongoing field trials of certain trees and bananas with our respective
partners.  The initial field trials conducted with ArborGen over a
three year period in certain species of trees have concluded and the trees have
been harvested for wood quality assessment.  Preliminary data from our
joint field trials show significantly enhanced growth rates in some of the trees
relative to controls.  Selected trees from the field trials were
harvested and their wood chemistry and density was assessed.  There
were no differences in key economic characteristics of wood, such a lignin,
cellulose and specific gravity, between the trees with the enhanced growth
attributes and untreated control trees, which indicates that the faster growth
does not result in lower wood quality.  Additional field trials for
enhanced growth rates and other traits are currently being performed with
ArborGen.




-27-





To date,
banana field trials have indicated that our technology extends the shelf life of
banana fruit by 100%.  In addition to the post harvest shelf life
benefits, an additional field trial generated encouraging disease tolerance data
specific to Black Sigatoka (Black Leaf Streak Disease), for banana plants.
Additional field trials for banana plants are ongoing for the combined traits of
disease resistance and shelf life extension.




Commercialization
by our partners may require a combination of traits in a crop, such as both post
harvest shelf life and disease resistance, or other traits.  Our
near-term research and development initiatives include modulating the expression
of DHS and Factor 5A genes in these plants and then propagation and phenotype
testing of such plants.




Our
ongoing research and development initiatives for agriculture include assisting
our license and joint venture partners to:




·
            further
      develop and implement the DHS and Factor 5A gene technology in banana,
      canola, cotton, turfgrass, bedding plants, rice, alfalfa, corn, soybean
      and trees; and






·
            test
      the resultant crops for new beneficial traits such as increased yield,
      increased tolerance to environmental stress, disease resistance and more
      efficient use of fertilizer.




Agricultural
Target Markets




In order
to address the complexities associated with marketing and distribution in the
worldwide market, we have adopted a multi-faceted commercialization strategy, in
which we have entered into and plan to enter into, as the opportunities present
themselves, additional licensing agreements or other strategic relationships
with a variety of companies or other entities on a crop-by-crop
basis.  We anticipate revenues from these relationships in the form of
licensing fees, royalties,, usage fees, or the sharing of gross
profits.  In addition, we anticipate payments from certain of our
partners, which are described in the Agricultural Development and License
Agreements section of this Form 10-Q, upon our achievement of certain
research and development benchmarks.  This commercialization strategy
allows us to generate revenue at various stages of product development, while
ensuring that our technology is incorporated into a wide variety of
crops.  Our optimal partners combine the technological expertise to
incorporate our technology into their product line along with the ability to
successfully market the enhanced final product, thereby eliminating the need for
us to develop and maintain a sales force.




Because
the agricultural market is dominated by privately held companies or subsidiaries
of foreign owned companies, market size and market share data for the crops
under our license and development agreements is not readily
available.  Additionally, because we have entered into confidentiality
agreements with our license and development partners, we are unable to report
the specific financial terms of the agreements as well as any market size and
market share data that our partners may have disclosed to us regarding their
companies.





-28-




Agricultural
Development and License Agreements




Through
October 31, 2009, we have entered into eight (8) license agreements and one (1)
joint collaboration with established agricultural biotechnology companies or, in
the case of Poet, as more fully described below, an established ethanol company,
as follows:




·
            In
      June 2002, we entered into a three-year worldwide exclusive development
      and option agreement with ArborGen, LLC to develop our technology in
      certain species of trees.  In June 2006, ArborGen exercised
      their option to license our technology and in December 2006, converted the
      development and option agreement into a license agreement, referred to
      herein as the ArborGen Agreement.  To date, the research being
      conducted by ArborGen has proceeded according to
      schedule.  ArborGen has seen promising positive growth responses
      in greenhouse-grown seedlings.  These initial greenhouse data
      led to the initiation of field trials by ArborGen in the second half of
      calendar 2004.  At the end of the 2005 growing season, certain
      trees which were enhanced by our technology had approximately double the
      increase in volume relative to control trees.  Further field
      trials are ongoing to support these data and to analyze the growth rates
      of trees which incorporate our technology. Under the ArborGen Agreement,
      we have received an upfront payment and benchmark payments and we may
      receive additional benchmark payments upon achievement of certain
      development milestones and royalties upon
    commercialization.




·
            In
      September 2002, we entered into an exclusive development and license
      agreement with Cal/West Seeds, referred to herein as the Cal/West License,
      to commercialize our technology in certain varieties of
      alfalfa.  The Cal/West License will continue until the
      expiration of the patents set forth in the agreement, unless terminated
      earlier by either party pursuant to the terms of the
      agreement.  The Cal/West License also grants Cal/West an
      exclusive option to develop our technology in various other forage
      crops.  The Cal/West development effort successfully
      incorporated our technology into their alfalfa seed as of July
      2004.  Seed transformation and greenhouse trait analysis is
      ongoing.  Under the Cal/West License, we have received an
      upfront payment and we may receive benchmark payments as certain
      development milestones are achieved and a royalty upon commercialization
      based upon the volume of alfalfa seed sold that contains our
      technology.




·
            In
      March 2004, we entered into an exclusive development and license agreement
      with The Scotts Company, referred to herein as the Scotts Agreement, to
      commercialize our technology in turfgrass and certain species of bedding
      plants.  Scotts is working on incorporating our technology to
      enhance a variety of traits in these plants, including environmental
      stress resistance, disease resistance and enhanced bloom
      properties. We are collaborating with Scotts in the areas of
      ornamental bedding plants and turfgrass.  A large-scale
      greenhouse evaluation of bedding plants was being conducted and additional
      greenhouse testing is planned.  Transformation and initial
      tissue culture screening of events have been undertaken in
      turfgrass.  In tissue culture, turfgrass containing our
      technology has grown more successfully than control turfgrass without our
      technology.  Greenhouse testing of the grass containing our
      technology is the next planned development step. Under the Scotts
      Agreement, we have received an upfront payment and benchmark
      payments.  In January 2006, the development and license
      agreement with The Scotts Company was amended. Due to a change in the
      corporate financial policy at Scotts, Scotts requested to defer certain
      milestone payments, which were to be made on a calendar
      basis.  We agreed and these payments have now been deferred and
      incorporated in the amount to be paid to us upon commercialization.Additionally, the
      commercialization fee has been increased.  All other aspects of
      the agreement remain unchanged, and the project continues to move forward
      without interruption. We may also receive royalties upon commercialization
      from the net sales of turfgrass seed and bedding plants containing our
      technology.




-29-




·
            In
      October 2005, we entered into an agreement with Poet to license our
      proprietary gene technology to Poet to improve aspects of Poet’s ethanol
      production capabilities.  We have developed our work plan to
      incorporate our technology into those aspects of Poet’s ethanol
      production.  We will receive an annual payment for each Poet
      facility that incorporates our technology.  If Poet incorporates
      our technology into each of its facilities, we would be entitled to
      receive an annual payment in excess of
  $1,000,000.




·
            On
      November 8, 2006, we entered into a license agreement with Bayer
      CropScience GmbH for the development and commercialization of
      Canola.  Under the terms of the agreement, we received an
      upfront payment, will receive milestone payments upon the achievement of
      certain development milestones and will receivecommercialization
      fees based upon specified benchmarks.  In August 2008, Bayer
      CropScience GmbH successfully completed the first development milestone
      related to this license.




·
            On
      July 17, 2007 we entered into a license agreement with Bayer CropScience
      AG for the development and commercialization of cotton.  Under
      the terms of the agreement, we received an upfront payment, will receive
      milestone payments upon the achievement of certain development milestones,
      and additionally, upon commercialization, and a royalty on net
      sales.




·
            On
      August 6, 2007 we entered into a license agreement with Monsanto for the
      development and commercialization of corn and soy.  Under the
      terms of the agreement, we received an upfront payment, will receive
      milestone payments upon the achievement of certain development milestones,
      and additionally, upon commercialization, and a royalty on net
      sales.




·
            On
      September 11, 2007 we entered into a license agreement with Bayer
      CropScience AG for the development and commercialization of
      rice.  Under the terms of the agreement, we received an upfront
      payment, will receive milestone payments upon the achievement of certain
      development milestones, and additionally, upon commercialization, and a
      royalty on net sales.




Joint
Venture




On May
14, 1999, we entered into an agreement with Rahan Meristem Ltd., or Rahan
Meristem, an Israeli company engaged in the worldwide export marketing of banana
germplasm, referred to herein as the Rahan Joint Venture.In general,
bananas are grown either for local domestic consumption or grown for
export.  According to the Food and Agriculture Organization of the
United Nations, there were approximately 16 million metric tons of bananas
exported in 2004.  The level of production equates to the fruit of
approximately 480 million banana plants.  A percentage of these plants
are replaced each year with new banana seedlings.Rahan Meristem accounts
for approximately 10% of the worldwide export of enhanced banana
seedlings.




-30-




We have
contributed, by way of a limited, exclusive, worldwide license to the Rahan
Joint Venture, access to our technology, discoveries, inventions and know-how,
whether patentable or otherwise, pertaining to plant genes and their cognate
expressed proteins that are induced during senescence for the purpose of
developing, on a joint basis, genetically enhanced banana plants which will
result in a banana that has a longer shelf life.  Rahan Meristem has
contributed its technology, inventions and know-how with respect to banana
plants.  Rahan Meristem and Senesco have equally shared the expense of
field trials.




All
aspects of the Rahan Joint Venture’s research and development initiative are
proceeding on time.Both the DHS and
lipase genes have been identified and isolated in banana, and the Rahan Joint
Venture is currently in the process of silencing these genes.  Two
Israeli field trials indicated that Senesco’s proprietary technology extends the
shelf life of the banana fruit up to 100%, while allowing the banana fruit to
ripen normally.  Later field trials have indicated what we believe are
promising disease tolerance results and we are currently performing additional
field trials to further assess disease tolerance.  However, as the
banana modified with our technology may be considered a genetically
modified  organism, or GMO, shelf life extension may have to be
combined with disease tolerance to gain acceptance by the
growers.




Agricultural
Research Program




Our
agricultural research and development is performed by three (3) researchers, at
our direction, at the University of Waterloo, where the technology was
developed.  Additional agricultural research and development is
performed by our partners in connection with the Scotts Agreement, the ArborGen
License, the Cal/West License, the Bayer Licenses, the Monsanto License and
through the Rahan Joint Venture.




The
discoverer of our technology, John E. Thompson, Ph.D., is the Associate Vice
President, Research and former Dean of Science at the University of Waterloo in
Ontario, Canada, and is our Executive Vice President and Chief Scientific
Officer.  Dr. Thompson is also one of our directors and owns 2.3% of
the outstanding shares of our common stock, $0.01 par value, as of September 30,
2009.




On
September 1, 1998, we entered into, and have extended through August 31, 2010, a
research and development agreement with the University of Waterloo and Dr.
Thompson as the principal inventor.  The Research and Development
Agreement provides that the University of Waterloo will perform research and
development under our direction, and we will pay for the cost of this work and
make certain payments to the University of Waterloo.  In return for
payments made under the Research and Development Agreements, we have all rights
to the intellectual property derived from the research.




-31-




Agricultural
Competition




Our competitors in both human health
and agriculture that are presently attempting to distribute their technology
have generally utilized one of the following distribution channels:




·
            licensing
      technology to major marketing and distribution
  partners;




·
            entering
      into strategic alliances; or




·
            developing
      in-house production and marketing
capabilities.




In
addition, some competitors are established distribution companies, which
alleviates the need for strategic alliances, while others are attempting to
create their own distribution and marketing channels.




Our competitors in the field of
delaying plant senescence are companies that develop and produce transformed
plants with a variety of enhanced traits.  Such companies include:
Mendel Biotechnology; Renessen LLC; Exelixis Plant Sciences, Inc.; and Syngenta
International AG;among others.




Agricultural
Development Program





Generally,
projects with our licensees and joint venture partner begin by transforming seed
or germplasm to incorporate our technology.  Those seeds or germplasm
are then grown in our partners’ greenhouses.  After successful
greenhouse trials, our partners will transfer the plants to the field for field
trials.  After completion of successful field trials, our partners may
have to apply for and receive regulatory approval prior to initiation of any
commercialization activities.




Generally,
the approximate time to complete each sequential development step is as
follows:




Seed
      Transformation
            approximately
      1 to 2 yearsGreenhouse
            approximately
      1 to 2 yearsField
      Trials
            approximately
      2 to 5 years





The actual amount of time spent on
each development phase depends on the crop, its growth cycle and the success of
the transformation achieving the desired results.  As such, the amount
of time for each phase of development could vary, or the time frames may
change.




The development of our technology
with Poet is different than our other licenses in that we are modifying certain
production inputs for ethanol.  That process involves modifying the
inputs, testing such inputs in Poet’s production process and if successful,
implementing such inputs in Poet’s production process on a plant by plant
basis.




-32-




The
status of each of our projects with our partners is as follows:




Project
            
            Partner
            
            StatusBanana
            
            
            
            Rahan
      Meristem-
      Shelf Life
            
            
            
            Field
      trials-
      Disease Resistance
            
            
            
            Field
      trialsTrees
            
            
            
            Arborgen-
      Growth
            
            
            
            Field
      trialsAlfalfa
            
            Cal/West
            
            GreenhouseCorn
            
            Monsanto
            
            Proof
      of concept ongoingCotton
            
            Bayer
            
            Proof
      of concept ongoingCanola
            
            Bayer
            
            Seed
      transformationRice
            
            Bayer
            
            Proof
      of concept ongoingSoybean
            
            Monsanto
            
            Proof
      of concept ongoingTurfgrass
            
            The
      Scotts Company
            
            GreenhouseBedding
      Plants
            
            The
      Scotts Company
            
            GreenhouseEthanol
            
            Poet
            
            Modify
      inputs




Commercialization
by our partners may require a combination of traits in a crop, such as both
shelf life and disease resistance, or other traits.




Based
upon our commercialization strategy, we anticipate that there may be a
significant period of time before plants enhanced using our technology reach
consumers.  Thus, we have not begun to actively market our technology
directly to consumers, but rather, we have sought to establish ourselves within
the industry through presentations at industry conferences, our website and
direct communication with prospective licensees.




Consistent
with our commercialization strategy, we intend to attract other companies
interested in strategic partnerships or licensing our technology, which may
result in additional license fees, revenues from contract research and other
related revenues.  Successful future operations will depend on our
ability to transform our research and development activities into a commercially
feasible technology.




Intellectual
Property




We
      have twenty (20) issued patents from the United States Patent and
      Trademark Office, or PTO, and twenty-six (26) issued patents from foreign
      countries, thirty-four (34) of which are for the use of our technology in
      agricultural applications and twelve (12) of which relate to human health
      applications.




In
addition to our forty-six (46) patents, we have a wide variety of patent
applications, including divisional applications and continuations-in-part, in
process with the PTO and internationally.  We intend to continue our
strategy of enhancing these new patent applications through the addition of data
as it is collected.




-33-





Government
Regulation





At
present, the U.S. federal government regulation of biotechnology is divided
among three agencies: (i) the U.S. Department of Agriculture regulates the
import, field-testing and interstate movement of specific types of genetic
engineering that may be used in the creation of transformed plants; (ii) the
Environmental Protection Agency regulates activity related to the invention of
plant pesticides and herbicides, which may include certain kinds of transformed
plants; and (iii) the FDA regulates foods derived from new plant
varieties.  The FDA requires that transformed plants meet the same
standards for safety that are required for all other plants and foods in
general.  Except in the case of additives that significantly alter a
food’s structure, the FDA does not require any additional standards or specific
approval for genetically engineered foods but expects transformed plant
developers to consult the FDA before introducing a new food into the market
place.




In
addition, our ongoing preclinical research with cell lines and lab animal models
of human disease is not currently subject to the FDA requirements that govern
clinical trials.  However, use of our technology, if developed for
human health applications, will also be subject to FDA
regulation.  Generally, the FDA must approve any drug or biologic
product before it can be marketed in the United States.  In addition,
prior to being sold outside of the U.S., any products resulting from the
application of our human health technology must be approved by the regulatory
agencies of foreign governments.  Prior to filing a new drug
application or biologics license application with the FDA, we would have to
perform extensive clinical trials, and prior to beginning any clinical trial, we
need to perform extensive preclinical testing which could take several years and
may require substantial expenditures.




We
believe that our current activities, which to date have been confined to
research and development efforts, do not require licensing or approval by any
governmental regulatory agency. However, we, or our licensees, may be required
to obtain such licensing or approval from governmental regulatory agencies prior
to the commercialization of our genetically transformed plants and the
application of our human health technology.




-34-




Liquidity
and Capital Resources




Overview




As of
September 30, 2009, our cash balance and investments, which consisted of money
market funds and U.S. treasury bills, totaled $1,075,295, and we had working
capital of $1,596,515.  As of September 30, 2009, we had a federal tax
loss carryforward of approximately $26,755,000 and a state tax loss
carry-forward of approximately $19,392,000 to offset future taxable income. We
cannot assure you that we will be able to take advantage of any or all of such
tax loss carryforwards, if at all, in future fiscal years.




Contractual
Obligations




The
following table lists our cash contractual obligations as of September 30,
2009:




Payments
      Due by PeriodContractual
      Obligations
            
            Total
            
            
            Less
      than 1 year
            
            
            1 -
      3 years
            
            
            4 -
      5 years
            
            
            More
      than 5 yearsResearch
      and Development Agreements (1)
            
            $
            1,683,733
            
            
            $
            1,683,733
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —Facility,
      Rent and Operating Leases (2)
            
            $
            132,924
            
            
            $
            79,420
            
            
            $
            53,504
            
            
            $
            —
            
            
            $
            —Employment,
      Consulting and Scientific Advisory Board Agreements (3)
            
            $
            338,338
            
            
            $
            335,838
            
            
            $
            2,500
            
            
            $
            —
            
            
            $
            —Total
      Contractual Cash Obligations
            
            $
            2,154,995
            
            
            $
            2,098,991
            
            
            $
            56,004
            
            
            $
            —
            
            
            $
            —





(1)
            Certain
      of our research and development agreements disclosed herein provide that
      payment is to be made in Canadian dollars and, therefore, the contractual
      obligations are subject to fluctuations in the exchange
    rate.




-35-




(2)
            The
      lease for our office space in New Brunswick, New Jersey is subject to
      certain escalations for our proportionate share of increases in the
      building’s operating costs.




(3)
            Certain
      of our consulting agreements provide for automatic renewal, which is not
      reflected in the table, unless terminated earlier by the parties to the
      respective agreements.




We expect
our capital requirements to increase significantly over the next several years
as we commence new research and development efforts, increase our business and
administrative infrastructure and embark on developing in-house business
capabilities and facilities. Our future liquidity and capital funding
requirements will depend on numerous factors, including, but not limited to, the
levels and costs of our research and development initiatives and the cost and
timing of the expansion of our business development and administrative
staff.




Effective
September 1, 2009, we extended our research and development agreement with the
University of Waterloo for an additional one-year period through August 31,
2010, in the amount of approximately $650,400.  Research and
development expenses under this agreement aggregated $160,000 for the three
months ended September 30, 2009 and $169,518 for the three months ended
September 30, 2008 and $5,280,368 for the cumulative period from inception
through September 30, 2009.




Capital
Resources




Since
inception, we have generated revenues of $1,450,000 in connection with the
initial fees and milestone payments received under our license and development
agreements.  We have not been profitable since inception, we will
continue to incur additional operating losses in the future, and we will require
additional financing to continue the development and subsequent
commercialization of our technology.  While we do not expect to
generate significant revenues from the licensing of our technology for the next
one to three years, or longer, we may enter into additional licensing or other
agreements with marketing and distribution partners that may result in
additional license fees, receive revenues from contract research, or other
related revenue.




We
anticipate that, based upon our current cash, investments and subscriptions
receivable, as of September 30, 2009 we will be able to fund our operations for
the next three (3) months. Over the next twelve months, we plan to fund our
research and development and commercialization activities by:




·
            utilizing
      our current cash balance and
investments;




·
            achieving
      some of the milestones set forth in our current licensing
      agreements;




·
            through
      the possible execution of additional licensing agreements for our
      technology; and




·
            through
      the placement of equity or debt
instruments.




We cannot
assure you that we will be able to raise money through any of the foregoing
transactions, or on favorable terms, if at all.




-36-




Changes
to Critical Accounting Policies and Estimates




We
adopted FASB ASC 815.40, “Determining Whether an Instrument (or Embedded
Feature) is Indexed to an Entity’s Own Stock”  for the fiscal year
beginning July 1, 2009.




Except
for the adoption of FASB ASC 815.40, there have been no changes to our critical
accounting policies and estimates as set forth in our Annual Report on Form 10-K
for the fiscal year ended June 30, 2009.




-37-


Results
of Operations




Three
Months Ended September 30, 2009 andThree
Months Ended September 30, 2008




The net
loss for the three month period ended September 30, 2009 was
$189,296.  The net loss for the three month period ended September 30,
2008 was $1,181,406.  Such a change represents a decrease in net loss
of $992,110,or
84%.  This decrease in net loss was primarily the result of an
increase in noncash income related to the change in fair value of a warrant
liability, which was partially offset by an increase in operating expenses and
non-cash expenses associated with the outstanding convertible notes and a
decrease in revenue and interest income.




Revenue




There was
no revenue for the three month period ended September 30, 2009.  Total
revenues of $200,000 for the three month period ended September 30, 2008
consisted of a milestone payment in connection with an agricultural license
agreement.




We
anticipate that we will continue to receive milestone payments in connection
with our current agricultural development and license agreements while we
continue to pursue our goal of attracting other companies to license our
technologies in various other crops.  Additionally, we anticipate that
we will receive royalty payments from our license agreements when our partners
commercialize their crops containing our technology.  However, it is
difficult for us to determine our future revenue expectations because we are a
development stage biotechnology company.  As such, the timing and
outcome of our experiments, the timing of signing new partners and the timing of
our partners moving through the development process into commercialization is
difficult to accurately predict.




Operating
Expenses




Three
      Months Ended September 30,2009
            
            
            2008
            
            
            Change
            
            
            %(in
      thousands, except % values)General
      and administrative
            
            $
            495
            
            
            $
            530
            
            
            $
            (35
            )
            
            
            (6.6
            )%Research
      and development
            
            
            575
            
            
            
            504
            
            
            
            71
            
            
            
            14.1
            %Total
      operating expenses
            
            $
            1,070
            
            
            $
            1,034
            
            
            $
            36
            
            
            
            (3.5
            )%





We expect
operating expenses to increase over the next twelve months as we anticipate that
research and development expenses will increase as we continue to expand our
research and development activities as they relate to the potential clinical
development of SNS01.




-38-




General
and Administrative Expenses




Three
      Months Ended September 30,2009
            
            
            2008
            
            
            Change
            
            
            %(in
      thousands, except % values)Share-based
      compensation
            
            $
            38
            
            
            $
            72
            
            
            $
            (34
            )
            
            
            (47.2
            )%Payroll
      and benefits
            
            
            161
            
            
            
            164
            
            
            
            (3
            )
            
            
            (1.8
            )%Investor
      relations
            
            
            46
            
            
            
            46
            
            
            
            —
            
            
            
            —Professional
      fees
            
            
            122
            
            
            
            142
            
            
            
            (20
            )
            
            
            (14.1
            )%Depreciation
      and amortization
            
            
            28
            
            
            
            26
            
            
            
            2
            
            
            
            7.7
            %Director
      fees
            
            
            43
            
            
            
            28
            
            
            
            15
            
            
            
            53.6
            %Other
      general and administrative
            
            
            57
            
            
            
            52
            
            
            
            5
            
            
            
            9.6
            %Total
      general and administrative
            
            $
            495
            
            
            $
            530
            
            
            $
            (35
            )
            
            
            (6.6
            )%





·
            Share-based
      compensation for the three months ended September 30, 2009 and 2008
      consisted of the amortized portion of the Black-Scholes value of options
      and warrants previously granted to directors, employees and
      consultants.  During the three month periods ended September 30,
      2009 and 2008, there were no option and warrant
  grants.




·
            Professional
      fees decreased primarily due to a decrease in legal and accounting fees
      related to the review of our securities
filings.




·
            Director
      fees increased primarily due to increasing the size of the board of
      directors from eight to ten.




We expect
general and administrative expenses to modestly increase over the next twelve
months primarily due to an increase in payroll and benefits and legal and
accounting fees related to the increased regulatory environment surrounding our
business.




Research
and Development Expenses




Three
      Months Ended September 30,2009
              
              
              2008
              
              
              Change
              
              
              %(in
      thousands, except % values)Share-based
      compensation
              
              $
              (3
              )
              
              $
              4
              
              
              $
              (7
              )
              
              
              (175.0
              )%Loss
      on extinguishment of debt
              
              
              86
              
              
              
              —
              
              
              
              86
              
              
              
              —Other
      research and development
              
              
              492
              
              
              
              500
              
              
              
              (8
              )
              
              
              (1.6
              )%Total
      research and development
              
              $
              575
              
              
              $
              504
              
              
              $
              71
              
              
              
              14.1
              %




·
            Share-based
      compensation consists primarily of the amortized portion of Black-Scholes
      value of options and warrants previously granted to research and
      development consultants and
employees.




·
            Loss
      on extinguishment of debt is in connection with the issuance of common
      stock and warrants to Cato Holding Company in exchange for debt that was
      owed by us to Cato Research Ltd. in the amount of
  $175,000.




-39-




·
            Other
      research and development costs slightly decreased primarily due to a
      decrease in the cost of the research performed at the University of
      Waterloo as a result of the stronger U.S. dollar against the Canadian
      dollar.




The
breakdown of our research and development expenses between our agricultural and
human health research programs is as follows:




Three
      Months Ended September 30,2009
            
            
            %
            
            
            2008
            
            
            %(in
      thousands, except % values)Agricultural
            
            $
            143
            
            
            
            25
            %
            
            $
            170
            
            
            
            34
            %Human
      health
            
            
            432
            
            
            
            75
            %
            
            
            334
            
            
            
            66
            %Total
      research and development
            
            $
            575
            
            
            
            100
            %
            
            $
            504
            
            
            
            100
            %




·
            Agricultural
      research expenses decreased during the three month period ended September
      30, 2009 primarily due to a decrease in the cost of the research performed
      at the University of Waterloo as a result of the stronger U.S. dollar
      against the Canadian dollar.




·
            Human
      health research expenses increased during the three month period ended
      September 30, 2009 primarily as a result of the multiple myeloma
      project.




We expect
the percentage of human health research programs to continue to increase as a
percentage of the total research and development expenses as we continue our
current research projects and begin new human health initiatives, in particular
as they relate to the potential clinical development of SNS01.




Other
noncash income




On July
1, 2009, we adopted FASB ASC 815.40  and recorded a warrant
liability in the amount of $3,200,108 on such date.  At each
reporting period, we are required to revalue the amount of the warrant
liability.  On September 30, 2009, the amount of the warrant liability
was adjusted to $1,311,975 and the difference of $1,888,133 was recorded as
other noncash income.




Amortization
of debt discount, financing costs and interest expense




During
the year ended June 30, 2008, we issued $10,000,000 in convertible notes and
warrants.  The net proceeds of those convertible notes and warrants
were recorded as equity.  The discount on the convertible notes is
being amortized, using the effective yield method, over the term of the
convertible notes.  The related costs of issuance were recorded as
deferred financing costs and are being amortized on a straight line basis over
the term of the convertible notes.




The
increase in the amortization of the debt discount is primarily due to $653,400
of convertible notes being converted into common stock during the three month
period ended September 30, 2009.  The unamortized portion of such
notes was amortized to interest expense.  None of the convertible
notes were converted into common stock during the three month period ended
September 30, 2008.




-40-




At
September 30, 2009, there were $8,801,600 of convertible notes
outstanding.




Interest
Income, net




Interest
income was lower during the three month period ended September 30, 2009 as a
result of lower interest rates and cash balances compared to the three-month
period ended September 30, 2008.




Period From Inception on
July 1, 1998 through September 30, 2009




From
inception of operations on July 1, 1998 through September 30, 2009, we have had
revenues of $1,450,000, which consisted of the initial license fees and
milestone payments in connection with our various development and license
agreements.  We do not expect to generate significant revenues for
approximately the next one to three years, during which time we will continue to
engage in significant research and development efforts.




We have
incurred losses each year since inception and have an accumulated deficit of
$31,407,428 at September 30, 2009.  We expect to continue to incur
losses as a result of expenditures on research and development and
administrative activities.





-41-




Item
3. Quantitative
and Qualitative Disclosures about Market Risk.




Foreign
Currency Risk




Our
financial statements are denominated in United States dollars and, except for
our agreement with the University of Waterloo, which is denominated in Canadian
dollars, all of our contracts are denominated in United States
dollars.  Therefore, we believe that fluctuations in foreign currency
exchange rates will not result in any material adverse effect on our financial
condition or results of operations.  In the event we derive a greater
portion of our revenues from international operations or in the event a greater
portion of our expenses are incurred internationally and denominated in a
foreign currency, then changes in foreign currency exchange rates could effect
our results of operations and financial condition.




Interest
Rate Risk




We
invest in high-quality financial instruments, primarily money market funds and
United States treasury notes, with an effective duration of the portfolio of
less than one year which we believe are subject to limited credit
risk.  We currently do not hedge our interest rate
exposure.  Due to the short-term nature of our investments, which we
plan to hold until maturity, we do not believe that we have any material
exposure to interest rate risk arising from our investments.




Item
4T. Controls
and Procedures.




(a) Evaluation
of disclosure controls and procedures.




The
principal executive officer and principal financial officer have evaluated our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of September 30, 2009.  Based on this
evaluation, they have concluded that our disclosure controls and procedures were
effective to ensure that the information required to be disclosed by us in
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Commission’s rules and forms, and to ensure that information required to
be disclosed by us in the reports that we file or submit under the Securities
Exchange Act of 1934 is accumulated and communicated to our management,
including our principal executive and principal financial officers, to allow
timely decisions regarding required disclosure.




(b) Changes
in internal controls.




No change
in our internal controls over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) occurred during the three month period
ended September 30, 2009 that has materially affected, or is reasonably likely
to materially affect, our internal controls over financial
reporting.




-42-


PART II. OTHER
INFORMATION.




Item
1A.  Risk Factors.




The more
prominent risks and uncertainties inherent in our business are described below.
However, additional risks and uncertainties may also impair our business
operations.  If any of the following risks actually occur, our
business, financial condition or results of operations may suffer.




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 $31,407,428 at September 30, 2009.
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.




In
addition, the financings with YA Global Investments, L.P., referred to herein as
YA Global, and Stanford Venture Capital Holdings, Inc., referred to herein as
Stanford, are secured by all of our assets.  If we default under the
convertible notes, the investors may foreclose on our assets and our
business.  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.




-43-




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;




·
            cease
      operations; or




·
            declare
      bankruptcy.




We
believe that at the projected rate of spending as of September 30, 2009, we
should have sufficient cash and investments to maintain our present operations
for the next three (3) months as of September 30, 2009.




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 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.




-44-




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,
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
September 30, 2009, we had cash and highly-liquid investments of $1,075,295 and
working capital of $1,596,515.  Using our available reserves as of
September 30, 2009, we believe that we can operate according to our current
business plan for the next three (3) months from September 30,
2009.  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;




·
            cease
      operations; or




·
            declare
      bankruptcy.




-45-




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
September 30, 2009, we had 18,332,537 shares of common stock authorized but
unissued and unreserved, which may be issued from time to time by our board of
directors without stockholder approval.  Furthermore, we may need to
issue securities that have rights, preferences and privileges senior to our
common stock.  Failure to obtain financing on acceptable terms would
have a material adverse effect on our liquidity.




Since our
inception, we have financed all of our operations through private equity and
debt financings. Our future capital requirements depend on numerous factors,
including:




·
            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.




-46-




As of
September 30, 2009, we have been issued twenty (20) patents by the PTO and
twenty-six (26) 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.




-47-




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, we require all employees to agree 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 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.




-48-




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.




-49-




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.




-50-




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 and clinical trials 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 clinical trials 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. 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.




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.




-51-




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:




·
            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.




-52-




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 employment agreements with all of our key
employees and a research agreement with Dr. John Thompson, these agreements may
be terminated upon short or no notice.  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 intend to submit a plan by November 30, 2009 to the NYSE
Amex Exchange discussing how we intend to regain compliance with the continued
listing requirements.  If the NYSE Amex Exchange does not accept our
plan or we are unable to meet the plan, it is possible that we will be
delisted.  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.




-53-




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
September 30, 2009, our executive officers, directors and affiliated entities
together beneficially own approximately 59.1% 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 September 30, 2009,
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 the
Company.




-54-




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 the Company.




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
September 30, 2009, we had 24,777,638 shares of our common stock issued and
outstanding, of which approximately 5,319,639 shares are registered pursuant
to  registration statements on Form S-3 and 16,560,555 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.  If 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:




·
            quarterly
      variations in operating results;




·
            the
      progress or perceived progress of our research and development
      efforts;




·
            changes
      in accounting treatments or
principles;




·
            announcements
      by us or our competitors of new technology, product and service offerings,
      significant contracts, acquisitions or strategic
      relationships;




·
            additions
      or departures of key personnel;




·
            future
      offerings or resales of our common stock or other
    securities;




-55-




·
            stock
      market price and volume fluctuations of publicly-traded companies in
      general and development companies in particular;
  and




·
            general
      political, economic and market
conditions.




For
example, during the quarter ended September 30, 2009, our common stock traded
between $0.83 per share and $0.44 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 outstanding convertible debentures, or the exercise of options and warrants
to purchase our common stock.




As of
September 30, 2009, we have outstanding warrants to purchase 22,158,793 shares
of our common stock.  In addition, as of September 30, 2009, we have
reserved 9,208,884 shares of our common stock for issuance upon the exercise of
options granted or available to be granted pursuant to our stock option plan,
all of which may be granted in the future.  The 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. In addition, any shares issued in
connection with the YA Global financing or Stanford financing, as further
discussed elsewhere in this Form 10-Q, can also have a dilutive effect and a
possible material adverse effect on our stock price.  The conversion
price of the warrants are also subject to certain anti-dilution
adjustments.  The agreements with YA Global and Stanford provide for
the potential issuance of up to a total of 62,388,888 shares of our common
stock, of which 13,883,332 shares are included in outstanding warrants noted
above.




-56-


Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.





Transaction
with Partlet Holdings




On July
9, 2009, we entered into a Securities Purchase Agreement, referred to herein as
the Partlet Securities Purchase Agreement, with Partlet Holdings Ltd., which is
an accredited investor, pursuant to which we issued an aggregate of 1,111,111
shares, referred to herein as the  Shares, of our common stock at
$0.90 per share and each of a Series A warrant, referred to herein as the
Partlet Series A Warrant, and a Series B warrant, 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 our
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
Partlet Series B Warrant entitles the holder to purchase 2,055,555 shares of our
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 from the date of grant.




On July 9, 2009, we closed on
$950,000 of aggregate proceeds of the private placement and, on that date,we
issued (i) a total of 1,055,555 Shares (ii) a Partlet Series A Warrant to
purchase 950,000 shares of our common stock, which was exercised on July 14,
2009, and (iii) a Partlet Series B Warrant to purchase 1,952,778 shares of our
common stock.  On September 30, 2009, we closed on the remaining
$50,000 in proceeds upon receiving  approval from our stockholders and
the NYSE Amex Exchange for certain aspects of the transaction





Transaction
with Each of Robert and Tim Forbes


On July
29, 2009, we entered into a Securities Purchase Agreement, referred to herein as
the Forbes Securities Purchase Agreement, with each of Robert Forbes and Timothy
Forbes, each of whom is an accredited investor, pursuant to which we issued an
aggregate of 444,444 shares of common stock at $0.90, referred to herein as the
Shares, per share and each of a Series A warrant, referred to herein as the
Forbes Series A Warrants, and a Series B warrant, referred to herein as the
Forbes Series B Warrants.  Each of Robert Forbes and Timothy Forbes
are the brothers of Christopher Forbes who is a director of our
company.  Mr. Christopher Forbes will not be deemed to be the
beneficial owner of, nor will he have a pecuniary interest in the Shares or
Warrants issued to his brothers.




The
Forbes Series A Warrants entitle the holders to purchase, in the aggregate, up
to 400,000 shares of our common stock at $0.01 per warrant share.  The
Forbes Series A Warrants have a term of seven years and are exercisable
immediately after the date of grant.




The
Forbes Series B Warrants entitle the holders to purchase, in the aggregate, up
to 405,556 shares of our common stock at $0.60 per warrant share.  The
Forbes Series B Warrants have a term of seven years and are not exercisable
until after the six-month anniversary from the date of grant.




Transaction
with Insiders and Affiliates


On July
29, 2009, we entered into a Securities Purchase Agreement, referred to herein as
the Affiliate’s Securities Purchase Agreement, with each of Harlan W. Waksal,
M.D., Rudolf Stalder, Christopher Forbes, David Rector, John N. Braca, Jack Van
Hulst, Warren Isabelle and the Thomas C. Quick Charitable Foundation, referred
to herein as the Affiliate Investors, each of whom is an accredited investor,
pursuant to which we issued an aggregate of 144,444 Shares of the Company’s
common stock at $0.90 per share and each of a Series A warrant, referred to
herein as the Affiliate’s Series A Warrants, and a Series B warrant, referred to
herein as the Affiliate’s Series B Warrants.  Each of Harlan W.
Waksal, M.D., Rudolf Stalder, Christopher Forbes, David Rector, John N. Braca,
Jack Van Hulst and Warren Isabelle serve on our board of
directors.  The Thomas C. Quick Charitable Foundation is an affiliate
of our board member Thomas C. Quick.




-57-




The
Affiliate’s Series A Warrants entitle the holders to purchase in the aggregate,
up to 130,000 shares of our common stock at $0.01 per warrant share.  The
Affiliates Series A Warrants have a term of seven years and are exercisable
immediately after the date of grant.




The
Affiliate’s Series B Warrants entitle the holders to purchase, in the aggregate,
up to 131,807 shares of our common stock at $0.60 per warrant share.  The
Affiliate’s Series B Warrants have a term of seven years and are not exercisable
until after the six-month anniversary from the date of grant.




Transaction
with Cato Research Ltd.


On July
29, 2009, we entered into a Securities Agreement with Cato Holding Company,
referred to herein as Cato, who is an accredited investor, pursuant to which we
issued an aggregate of 194,444 Shares of the Company’s common stock at $0.90 per
share and each of a Series A warrant, referred to herein as the Cato Series A
Warrant and a Series B warrant, referred to herein as the Cato Series B
Warrant.  The Shares were issued to Cato in exchange for debt which
was owed by us to Cato Research Ltd. in the amount of $175,000.  Cato
Research Ltd. is an affiliate of Cato.




The Cato
Series A Warrant entitles the holder to purchase in the aggregate, up to 175,000
shares of our common stock at $0.01 per warrant share.  The Cato Series A
Warrant has a term of seven years and is exercisable immediately after the date
of grant.




The Cato
Series B Warrant entitles the holder to purchase, in the aggregate, up to
177,431 shares of our common stock at $0.60 per warrant share.  The Cato
Series B Warrant has a term of seven years and is not exercisable until after
the six-month anniversary from the date of grant.




The
foregoing proceeds were closed upon receiving approval from our stockholders and
the NYSE Amex Exchange for certain aspects of the transactions on September 30,
2009.




We plan
to use the proceeds of the foregoing financings for funding our research and
development programs and for general corporate purposes.




-58-




Item
4. Submission of Matters to a Vote of Security Holders.




(a)
            A
      special meeting of stockholders was held on September 22,
      2009.




(b)
            There
      were 18,349,719 shares of common stock present at the meeting in person or
      by     proxy, out of a total number of 21,939,339
      shares of common stock issued and outstanding and entitled to vote at the
      meeting.The
      proposals and results of the vote of the stockholders taken at the meeting
      by ballot and by proxy as solicited by us on behalf of our Board of
      Directors were as follows:




(A)
            To
      approve an amendment to the Company’s Certificate of Incorporation to
      increase the total number of authorized shares of common stock, $0.01 par
      value per share, of the Company from 100,000,000 to
      120,000,000:





For
            Against
            Abstain
            Broker
      Non-Votes17,724,922
            618,431
            6,366
            0





(B)
            To
      approve, for purposes of section 713 of the NYSE Amex Company
      Guide, the issuance of the Company’s shares of common stock and warrants
      (and the shares of common stock issuable upon exercise of the warrants),
      which in the aggregate exceed 20% of the Company’s currently outstanding
      shares of common stock, pursuant to the terms and conditions of the
      Securities Purchase Agreement, dated as of July 9, 2009, between
      Partlet Holdings Limited and us, the Securities Purchase Agreement, dated
      as of July 29, 2009, between each of Robert Forbes, Timothy Forbes, Harlan
      W. Waksal, M.D., Rudolf Stalder, Christopher Forbes, David Rector, John N.
      Braca, Jack Van Hulst, Warren Isabelle and the Thomas C. Quick Charitable
      Foundation and the Company and the Securities Purchase Agreement, dated as
      of July 29, 2009, between Cato Holding Company and the
      Company:





For
            Against
            Abstain
            Broker
      Non-Votes11,544,528
            255,219
            6,416
            6,543,556




(C)
            To
      approve, for purposes of section 711 of the NYSE Amex Company
      Guide, the issuance of the Company’s shares of common stock and warrants
      (and the shares of common stock issuable upon exercise of the warrants)
      pursuant to the terms and conditions of the Securities Purchase Agreement,
      dated as of July 29, 2009, to certain of the Company’s insiders and
      affiliates:





For
            Against
            Abstain
            Broker
      Non-Votes11,539,644
            257,394
            9,125
            6,543,556




-59-


Item
5. Other
Information




None




Item
6. Exhibits.




Exhibits.




Exhibit
      No.
            
            Description3.1
            
            Certificate
      of Amendment to the Amended and Restated Certificate of Incorporation of
      Senesco Technologies, Inc. filed with the State of Delaware on September
      22, 2009. (Incorporated by reference to Exhibit 3.3 of Senesco
      Technologies, Inc. Current Report on Form 8-K, filed on July 10,
      2009.)4.1
            
            Form
      of Series A Warrant issued to Partlet Holdings Ltd. (Incorporated by
      reference to Exhibit 4.1 of Senesco Technologies, Inc. Current Report on
      Form 8-K, filed on July 10, 2009.)4.2
            
            Form
      of Series B Warrant issued to Partlet Holdings Ltd. (Incorporated by
      reference to Exhibit 4.2 of Senesco Technologies, Inc. Current Report on
      Form 8-K, filed on July 10, 2009.)4.3
            
            Form
      of Series A Warrant issued to each of Robert Forbes, Timothy Forbes,
      Harlan W. Waksal, M.D., Rudolf Stalder, Christopher Forbes, David Rector,
      John N. Braca, Jack Van Hulst, Warren Isabelle and the Thomas C. Quick
      Charitable Foundation. (Incorporated by reference to Exhibit 4.1 of
      Senesco Technologies, Inc. Current Report on Form 8-K, filed on July 30,
      2009.)4.4
            
            Form
      of Series B Warrant issued to each of Robert Forbes, Timothy Forbes,
      Harlan W. Waksal, M.D., Rudolf Stalder, Christopher Forbes, David Rector,
      John N. Braca, Jack Van Hulst, Warren Isabelle and the Thomas C. Quick
      Charitable Foundation. (Incorporated by reference to Exhibit 4.2 of
      Senesco Technologies, Inc. Current Report on Form 8-K, filed on July 30,
      2009.)4.5
            
            Form
      of Series A Warrant issued to Cato Holding Company. (Incorporated by
      reference to Exhibit 4.1 of Senesco Technologies, Inc. Current Report on
      Form 8-K, filed on July 30, 2009.)4.6
            
            Form
      of Series B Warrant issued to Cato Holding Company. (Incorporated by
      reference to Exhibit 4.2 of Senesco Technologies, Inc. Current Report on
      Form 8-K, filed on July 30, 2009.)10.1
            
            Securities
      Purchase Agreement by and between Senesco Technologies, Inc. and Partlet
      Holdings Ltd. Dated as of July 9, 2009. (Incorporated by reference to
      Exhibit 10.1 of Senesco Technologies, Inc. Current Report on Form 8-K,
      filed on July 10, 2009.)10.2
            
            Securities
      Purchase Agreement by and between Senesco Technologies, Inc. and each of
      Robert Forbes, Timothy Forbes, Harlan W. Waksal, M.D., Rudolf Stalder,
      Christopher Forbes, David Rector, John N. Braca, Jack Van Hulst, Warren
      Isabelle and the Thomas C. Quick Charitable Foundation dated as of July
      29, 2009. (Incorporated by reference to Exhibit 10.1 of Senesco
      Technologies, Inc. Current Report on Form 8-K , filed on July 30,
      2009.)




-60-




10.3
            
            Securities
      Purchase Agreement by and between Senesco Technologies, Inc. and Cato
      Holding Company dated as of July 29, 2009. (Incorporated by reference to
      Exhibit 10.2 of Senesco Technologies, Inc. Current Report on Form 8-K ,
      filed on July 30, 2009.)10.4
            
            Amendment
      to Research Agreement by and among the University of Waterloo, Senesco,
      Inc. and Dr. John E. Thompson, Ph.D., dated August 27, 2009. (Incorporated
      by reference to Exhibit 10.32 of Senesco Technologies, Inc. annual report
      on Form 10-K for the period ended June 30, 2009.)10.5*
            
            Form
      of Stock Option Agreement under the Senesco Technologies, Inc. 2008 Stock
      Incentive Plan (filed herewith)10.6*
            
            Form
      of Restricted Stock Unit Issuance Agreement under the Senesco
      Technologies, Inc. 2008 Stock Incentive Plan (filed
    herewith)31.1
            
            Certification
      of principal executive officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002. (filed herewith)31.2
            
            Certification
      of principal financial and accounting officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002. (filed herewith)32.1
            
            Certification
      of principal executive officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350. (furnished
      herewith)32.2
            
            Certification
      of principal financial and accounting officer pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350. (furnished
      herewith)




*
            A
      management contract or compensating plan or arrangement required to be
      filed as an exhibit




-61-


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:  November
      16, 2009
              By:
              /s/
      Jack Van HulstJack
      Van Hulst,
                President
      andChief
      Executive Officer
                (Principal
      Executive Officer)DATE:  November
      16, 2009
              By:
              /s/
      Joel BrooksJoel
      Brooks,

                Chief
      Financial Officerand
                Treasurer
      (Principal Financial
                and
      Accounting Officer)




-62-