| SENESCO TECHNOLOGIES INC Item 1A Risk Factors |
| 16 ______________________________________________________________________ We have a limited operating history and have incurred substantial losses and expect 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 have an accumulated deficit of dlra22cmam369cmam843 at June 30, 2006 |
| We have generated minimal revenues by licensing our technology for certain crops to companies willing to share in our development costs |
| However, our technology may not be ready for widespread 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, commercialization and administrative activities will significantly exceed our revenues during that period |
| In addition, we cannot assure you that we will be able to sell our New Jersey state net operating losses for any specific fiscal year |
| We cannot predict when, if ever, we will become profitable |
| 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 commercial exploitation of technology to identify, isolate, characterize and 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 |
| 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 to successfully commercialize such technology or develop a commercially viable product 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 primary research and development efforts take place at the University of Waterloo in Ontario, Canada, where our technology was discovered, the University of Colorado, Mayo Clinic, the University of Virginia, the University of Pittsburgh, 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, such as the University of Waterloo, 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 |
| 17 ______________________________________________________________________ We have significant future capital needs and may be unable to raise capital when needed, which could force us to delay or reduce our research and development efforts |
| As of June 30, 2006, we had cash and highly-liquid investments valued at dlra1cmam168cmam473 and working capital of dlra858cmam811 |
| In October 2006, we received aggregate net proceeds of dlra2cmam050cmam000 from a private placement of our equity securities |
| Using our available reserves as of June 30, 2006, and the net proceeds from the private equity financing, we believe that we can operate according to our current business plan at least through June 30, 2007 |
| 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 according to 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; · license third parties to develop and commercialize our technology that we would otherwise seek to develop and commercialize ourselves; · seek strategic alliances or business combinations, or attempt to sell our company; or · cease operations |
| 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 20prca 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, as of June 30, 2006, we had 6cmam226cmam021 shares of common stock authorized but unissued, which may be issued from time to time by our board of directors without stockholder approval |
| In connection with our private placement of equity securities, in October 2006, we issued an aggregate of an additional 1cmam986cmam306 shares of common stock and warrants to purchase 1cmam132cmam194 shares of common stock |
| Therefore assuming the exercise of all options and warrants granted as of October 11, 2006, we had 3cmam107cmam521 shares of common stock authorized but unissued, 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 |
| Since our inception, we have financed all of our operations through private equity 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 |
| 18 ______________________________________________________________________ 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 |
| We have been issued ten patents by the US Patent and Trademark Office, or PTO, and eight 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 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 that 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 require licensing and the payment of significant fees or royalties to third parties for the use of their intellectual property in order to enable us to conduct our business |
| 19 ______________________________________________________________________ Our competitors may allege that we are infringing upon their intellectual property rights, forcing us to incur substantial costs and expenses in resulting litigation, the outcome of which would be uncertain |
| Patent law is still evolving relative to the scope and enforceability of claims in the fields in which we operate |
| We are like most biotechnology companies in that our patent protection is highly uncertain and involves complex legal and technical questions for which legal principles are not yet firmly established |
| In addition, if issued, our patents may not contain claims sufficiently broad to protect us against third parties with similar technologies or products, or provide us with any competitive advantage |
| The PTO and the courts have not established a consistent policy regarding the breadth of claims allowed in biotechnology patents |
| The allowance of broader claims may increase the incidence and cost of patent interference proceedings and the risk of infringement litigation |
| On the other hand, the allowance of narrower claims may limit the 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 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 |
| 20 ______________________________________________________________________ We occasionally provide information to research collaborators in academic institutions and request the collaborators to conduct certain tests |
| We cannot assure you that the academic institutions will not assert intellectual property rights in the results of the tests conducted by the research collaborators, or that the academic institutions will grant licenses under such intellectual property rights to us on acceptable terms, if at all |
| If the assertion of intellectual property rights by an academic institution is substantiated, and the academic institution does not grant intellectual property rights to us, these events could limit our ability to commercialize our technology |
| As we evolve from a company primarily involved in the research and development of our technology into one that is also involved in the commercialization of our technology, we may have difficulty managing our growth and expanding our operations |
| As our business grows, we may need to add employees and enhance our management, systems and procedures |
| We will 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 will 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 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 also 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 we fail to successfully establish distribution channels, or if our marketing partners fail to provide adequate levels of sales, our commercialization efforts will be delayed or limited and we will 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 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 21 ______________________________________________________________________ commercialization |
| The establishment of joint ventures and strategic alliances may create future competitors, especially in certain regions abroad where we do not pursue patent protection |
| If we fail to establish beneficial business partners and strategic alliances, our growth will suffer and the continued development of our technology may be harmed |
| Competition in the agricultural and human health 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 agricultural and human health biotechnology companies are engaged in research and development activities relating to senescence and apoptosis |
| 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 |
| Some of our competitors that are involved in apoptosis research include: Amgen; Centocor; Genzyme; OSI Pharmaceuticals, 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 are unable to obtain regulatory approval, we may not be able to continue our operations |
| At present, the US 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 |
| 22 ______________________________________________________________________ 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 US, 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, 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 |
| 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 consumer products |
| The adverse consequences from heightened consumer concern in this regard could affect the markets for 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 |
| 23 ______________________________________________________________________ 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 |
| 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 American Stock Exchange, 5cmam000cmam000 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 15prca or more of the corporation’s outstanding voting stock for a period of three years from the date such stockholder becomes a 15prca 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 outstanding options or issue equivalent options, our board of directors is required to provide accelerated vesting of outstanding options |
| Increasing political and social turmoil, such as terrorist and military actions, increase the difficulty for us and our strategic partners to forecast accurately and plan future business activities |
| Recent political and social turmoil, including the conflict in Iraq and the current crisis in the Middle East, can be expected to put further pressure on economic conditions in the United States and worldwide |
| These political, social and economic conditions may make it difficult for us to plan future business activities |
| Specifically, if the current situation in Israel continues to escalate, our joint venture with Rahan Meristem Ltd |
| could be adversely affected |
| 24 ______________________________________________________________________ Risks Related to Our Common Stock Our management and other affiliates have significant control of our common stock and could significantly influence our actions in a manner that conflicts with our interests and the interests of other stockholders |
| As of June 30, 2006, our executive officers, directors and affiliated entities together beneficially own approximately 41dtta4prca of the outstanding shares of our common stock, assuming the exercise of options and warrants which are currently exercisable or will become exercisable within 60 days of June 30, 2006, held by these stockholders |
| As of October 11, 2006, upon the closing of our private placement of equity securities, our executive officers, directors, and affiliated entities together beneficially own approximately 37dtta2prca 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 October 11, 2006, 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 |
| Our stockholders may experience substantial dilution as a result of the exercise of outstanding options and warrants to purchase our common stock |
| As of June 30, 2006, we have granted options outside of our stock option plan to purchase 10cmam000 shares of our common stock and outstanding warrants to purchase 5cmam860cmam091 shares of our common stock |
| In addition, as of June 30, 2006, we have reserved 3cmam000cmam000 shares of our common stock for issuance upon the exercise of options granted pursuant to our stock option plan, 2cmam516cmam500 of which have been granted, 90cmam000 of which have been exercised, 2cmam426cmam500 of which are outstanding, and 483cmam500 of which may be granted in the future |
| As of October 11, 2006, upon the closing of our private placement of equity securities, we have outstanding warrants to purchase 6cmam982cmam285 shares of our common stock |
| 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 |
| A significant portion of our total outstanding shares of common stock may be sold in the market in the near future, which could cause the market price of our common stock to drop significantly |
| As of June 30, 2006, we had 15cmam477cmam388 shares of our common stock issued and outstanding, of which approximately 1cmam595cmam651 shares are registered pursuant to a registration statement on Form S-3, which was declared effective on June 17, 2005, and the remainder of which are either eligible to be sold under SEC Rule 144 or are in the public float |
| In addition, we have registered 965cmam380 shares of our Common Stock underlying warrants previously issued on the Form S-3 registration statement that was declared effective on June 17, 2005, and we registered 3cmam000cmam000 shares of our common stock underlying options granted or to be granted under our stock option plan |
| As of October 11, 2006, upon the closing of our private placement of equity securities, we had 17cmam473cmam694 shares of our common stock issued and outstanding |
| 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 American Stock Exchange and currently has a limited trading market |
| The American Stock Exchange requires us to meet minimum financial requirements in order to maintain our listing |
| Currently, we believe that we meet the continued listing requirements of the American Stock Exchange |
| We cannot assure you that an active trading market will develop or, if developed, will 25 ______________________________________________________________________ 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 |
| If our common stock is delisted from the American Stock 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 American Stock Exchange requires us to meet minimum financial requirements in order to maintain our listing |
| Currently, we believe that we meet the continued listing requirements of the American Stock Exchange |
| If we do not continue to meet the continued listing requirements, we could be delisted |
| If we are delisted from the American Stock 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 dlra5dtta00 per share or with an exercise price of less than dlra5dtta00 per share, subject to certain exceptions |
| If our common stock becomes a penny stock, additional sales practice requirements would be imposed on broker-dealers that sell such securities to persons other than certain qualified investors |
| For transactions involving a penny stock, unless exempt, a broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to the sale |
| In addition, the rules on penny stocks require delivery, prior to and after any penny stock transaction, of disclosures required by the SEC If our common stock were subject to the rules on penny stocks, the market liquidity for our common stock could be severely and adversely affected |
| Accordingly, the ability of holders of our common stock to sell their shares in the secondary market may also be adversely affected |
| 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; · stock market price and volume fluctuations of publicly-traded companies in general and development companies in particular; and · general political, economic and market conditions |
| 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 |