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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 2001.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CELSION CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
52-1256615
(I.R.S. Employer Identification Number)
10220-I OLD COLUMBIA ROAD
COLUMBIA, MD 21046-1705
(410) 290-5390
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
SPENCER J. VOLK
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CELSION CORPORATION
10220-I OLD COLUMBIA ROAD
COLUMBIA, MD 21046-1705
(410) 290-5390
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
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COPIES TO:
ANITA J. FINKELSTEIN
VENABLE, BAETJER, HOWARD & CIVILETTI, LLP
1201 NEW YORK AVENUE, NW
SUITE 1000
WASHINGTON, DC 20005
(202) 962-4800
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please
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check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
[ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
PROPOSED
AMOUNT MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE AGGREGATE PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1) PER UNIT PRICE FEE
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Common stock, par value $0.01 per
share, issuable upon exercise of
Warrants......................... 693,479(2) $0.74(3) $513,174 $128
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Common Stock, par value $0.01 per
share, issuable upon exercise of
Warrants......................... 300,000 $1.75(4) $525,000 $132
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Common Stock, par value $0.01 per
share, issuable upon exercise of
Warrants......................... 150,000 $5.00(5) $750,000 $188
===========================================================================================================
(1) Pursuant to Rule 416 under the Securities Act of 1933, this registration
statement also covers an indeterminate number of additional shares as may be
issued as a result of adjustments to prevent dilution by reason of any stock
split, stock dividend or similar transaction.
(2) Consists of 300,000 share underlying Warrants exercisable at $0.69 per
share, 100,000 shares underlying Warrants exercisable at $0.50 per share and
293,479 shares underlying Warrants exercisable at $0.25 per share.
(3) Calculated pursuant to Rule 457(g) and Rule 457(c) under the Securities Act
of 1933. The above calculation is based on the average of the high and low
prices of the Common Stock on The American Stock Exchange on July 5, 2001.
(4) Calculated pursuant to Rule 457(h) under the Securities Act of 1933 based
upon an exercise price of $1.75 per share.
(5) Calculated pursuant to Rule 457(h) under the Securities Act of 1933 based
upon an exercise price of $5.00 per share.
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OF WHICH THIS
PROSPECTUS IS A PART IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 6, 2001
PRELIMINARY PROSPECTUS
CELSION CORPORATION
1,143,479 SHARES
COMMON STOCK
This Prospectus of Celsion Corporation, a Delaware corporation, or the
Company, relates to the offer and sale from time to time by certain selling
stockholders (the "Selling Stockholders") of up to 1,143,479 shares of the
Company's Common Stock, par value $0.01 per share issuable upon the exercise of
certain Common Stock purchase warrants (the "Warrants"). The shares of Common
Stock offered hereby are referred to as the "Shares." See "Selling Stockholders"
and "Plan of Distribution."
The Company will not receive any proceeds from any sales of Shares by
the Selling Stockholders. However, the Company will receive proceeds upon any
exercise of Warrants, up to a maximum of $1,605,370 if all of the Warrants are
exercised.
The Selling Stockholders or pledgees, donees, transferees or other
successors in interest that receive Shares by way of gift, partnership
distribution or other non-sale transfer, may offer and sell some, all or none of
the Shares under this Prospectus. The Selling Stockholders or their successors
may determine the prices at which they will sell their Shares, which may be at
then prevailing market prices or some other price. In connection with such
sales, the Selling Stockholders or their successors may use brokers or dealers
who may receive compensation or commissions for such sales. The Company has
agreed to bear all expenses in connection with the registration of the Shares.
However, the Selling Stockholders will pay any brokerage commissions, discounts
and fees in connection with the sale of their Shares. A Selling Stockholder's
net proceeds from the sale of Shares will be the sales price of the Shares sold,
less applicable commissions, discounts and fees.
The Common Stock is traded on The American Stock Exchange under the
symbol "CLN." On July [__], 2001, the closing price of the Common Stock on The
American Stock Exchange was [$___].
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INVESTMENT IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 8 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE SHARES FROM THE SELLING STOCKHOLDERS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is July [__], 2001
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TABLE OF CONTENTS
PAGE
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Where You Can Find More Information.........
Summary Information About The Company.......
Risk Factors................................
Cautionary Statement About Forward-Looking
Statements..................................
Use of Proceeds.............................
Plan of Distribution........................
Legal Matters...............................
Experts.....................................
We have informed the Selling Stockholders that the anti-manipulative
rules under the Securities Exchange Act of 1934, including Regulation M, may
apply to their sales of Shares in the market. We have furnished the Selling
Stockholders with a copy of these rules. We have also informed the Selling
Stockholders that they must deliver a copy of this Prospectus with any sale of
their Shares.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with
the U.S. Securities and Exchange Commission, or the SEC. You may read and copy
any document that we have filed at the SEC's Public Reference Room at 450 Fifth
Street, NW, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for
further information about the operation of its public reference facilities. Our
SEC filings are also available to you free of charge at the SEC's web site at
http://www.sec.gov.
We have filed a registration statement on Form S-3 with the SEC that
covers the resale of the Shares offered hereby. This Prospectus is a part of
that registration statement, but does not include all of the information
included in the registration statement. You should refer to the registration
statement for additional information about us and the Shares. Statements that we
make in this Prospectus relating to any document filed as an exhibit to or
incorporated by reference into the registration statement may not be complete.
You should review the referenced document itself for a complete understanding of
its terms.
The SEC allows us to "incorporate by reference" to the information we
file with them, which means that we can disclose important information to you in
this Prospectus by referring you to those documents. The documents that have
been incorporated by reference are an important part of the Prospectus, and you
should be sure to review that information in order to understand the nature of
any investment by you in the Shares. In addition to previously filed documents
that are incorporated by reference, documents that we file with the SEC after
the date of this Prospectus will automatically update the registration
statement. The documents that we have previously filed and that are incorporated
by reference into this Prospectus include the following:
- Our Annual Report on Form 10-K for the fiscal year ended
September 30, 2000;
- Our Proxy Statement relating to the 2001 Annual Meeting of
Stockholders;
- Our Quarterly Report on Form 10-Q for the quarter ended December
31, 2000;
- Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2001;
- Our Current Report on Form 8-K dated December 29, 2000; and
- The description of our Common Stock included in our registration
statement on Form 8-A filed on May 26, 2000.
All documents and reports filed by us pursuant to Sections 13 (a), 13
(c), 14 or 15 (d) of the Securities Exchange Act of 1934 after the date of this
Prospectus and prior to the date that the offering of Shares made hereby is
terminated automatically will be incorporated by reference into this Prospectus.
Any statement contained in a document incorporated or deemed to be incorporated
by reference into this Prospectus shall be modified or superseded for the
purposes of this Prospectus to the extent that a statement contained in this
Prospectus, or in any other subsequently filed document which also is, or is
deemed to be, incorporated by reference, modifies or supersedes that statement.
Any statement modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Prospectus.
We will provide you with copies of any of the documents incorporated by
reference at no charge to you. However, we will not deliver copies of any
exhibits to those documents unless the exhibit itself is specifically
incorporated by reference. If you would like a copy of any document, please
write or call us at:
Celsion Corporation
10220-I Old Columbia Road
Columbia, MD 21046-1705
Attention: Corporate Secretary
(410) 290-5390
You should only rely upon the information included in or incorporated by
reference into this Prospectus or in any Prospectus supplement that is delivered
to you. We have not authorized anyone to provide you with additional or
different information. You should not assume that the information included in or
incorporated by reference into this Prospectus or any Prospectus supplement is
accurate as of any date later than the date on the front of the Prospectus or
Prospectus supplement.
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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
Throughout this Prospectus and the other documents incorporated by
reference into this Prospectus, we make certain "forward-looking" statements.
These statements involve known and unknown risks, uncertainties and other
factors that may cause our or our industry's actual results, levels of activity,
performance, or achievements to be materially different from any future results,
levels of activity, performance or achievements predicted by such
forward-looking statements. Such factors include, among other things, those
listed under "Risk Factors" and as well as those discussed elsewhere in this
Prospectus and the documents incorporated by reference into this Prospectus. In
some cases, you can identify forward-looking statements by terminology such as
"may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue" or the negative of such terms or other
comparable terminology.
Forward-looking statements are only predictions and involve various
risks and uncertainties including:
- unforeseen changes in the course of research and development
activities and in clinical trials;
- possible changes in cost and timing of development and testing,
capital structure and other financial matters;
- changes in approaches to medical treatment;
- introduction of new products by others;
- possible acquisitions of other technologies, assets or
businesses;
- possible actions by customers, suppliers, competitors,
regulatory authorities and others; and
- other risks detailed from time to time in the Company's reports
filed with the SEC.
Actual events or results may differ materially from those contemplated
by this Prospectus and the other documents incorporated by reference into this
Prospectus. In evaluating these statements, you should specifically consider
various factors, including those listed above and outlined under "Risk Factors."
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of such statements. We
are under no duty to update any of the forward-looking statements after the date
of this Prospectus to conform such statements to actual results or
circumstances.
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SUMMARY INFORMATION ABOUT THE COMPANY
This summary highlights selected information contained elsewhere in this
Prospectus and incorporated into this Prospectus by reference. This summary may
not contain all of the information that may be important to you in considering
an investment in our Common Stock. You should read the entire Prospectus,
including "Risk Factors" carefully before making an investment decision.
GENERAL
We develop medical treatment systems primarily to treat breast cancer
and a chronic prostate enlargement condition, common in older males, known as
benign prostatic hyperplasia, or BPH, using minimally invasive focused heat
technology. We have also been working with Duke University on the development of
heat-sensitive liposome compounds for use in the delivery of chemotherapy drugs
to tumor sites and with Memorial Sloan-Kettering Cancer Center on the
development of heat-activated gene therapy compounds.
CELSION BREAST CANCER TECHNOLOGY
Through an exclusive licensing agreement with the Massachusetts
Institute of Technology, or MIT, we have been using a microwave concentration
and focusing technology known as "adaptive phased array," or APA, originally
developed for the U.S. Strategic Defense Initiative, or "Star Wars" program. We
have incorporated this technology in our second generation Microfocus cancer
treatment equipment and are now testing this equipment in the treatment of
breast cancer without the use of radiation. We also intend to use this
technology in the future to develop equipment for the treatment of deep tissue
cancers.
In 1998, we completed preclinical trials of our prototype clinical
breast cancer treatment system at Massachusetts General Hospital, in Boston,
Massachusetts. Animal tests have demonstrated that our APA deep tissue heat
technology can accurately focus heat in a small target area, making it possible
to destroy tumors by heat alone, without the use of radiation.
In January 1999, we received an Investigational Device Exemption, or
IDE, approval from the Food and Drug Administration, or FDA, to permit clinical
testing of our breast cancer treatment system. We also received FDA clearance to
proceed with scheduled Phase I human clinical studies. In August 2000, we
completed treatment of ten patients in the Phase I study at Columbia Hospital in
West Palm Beach, Florida and at Harbor UCLA Medical Center in Torrance,
California, using our breast cancer equipment. We assembled data from the study
and created two protocols - one to investigate whether our treatment can ablate
(remove) small breast cancer tumors and the second to investigate whether our
treatment can shrink large tumors to a size that would permit a lumpectomy
instead of a mastectomy. In December 2000, we received approval from the FDA to
commence Phase II trials for our breast cancer treatment system in December
2000. The Company has enlisted six sites to perform the clinical trials. Four of
the sites - Columbia Hospital in West Palm Beach in Florida; Harbor UCLA
Medical Center in Torrance California; the University of Oklahoma Hospital and
Beth Israel Deaconess Medical Center in Boston Massachusetts - are in the
United States, with the remaining two sites being in Germany (Martin Luther
Halle Klinik fur Diagnostische Radiologie, in Halle) and England (Hammersmith
Hospital in London). The Company anticipates that one or two additional sites
will be established in the United States in the near future. Tests are already
underway in West Palm Beach and are expected to commence shortly at the other
sites. The Company anticipates that these studies will be completed during 2002.
If these trials yield successful outcomes and if we receive final FDA approval,
we anticipate marketing the breast cancer treatment system beginning in 2002, in
conjunction with a strategic partner that we expect to identify and select at a
later stage of the testing and approval process.
CELSION BPH TREATMENT TECHNOLOGY
Our proprietary BPH treatment system is intended to address the problem
of enlarged prostates, an age-related condition common in males over 50. This
system employs a catheter with a proprietary balloon compression device that
delivers computer-controlled transurethral microwave heating to damage and kill
enlarged prostate cells constricting the wall of the urethra. Simultaneously,
the balloon device inflates to expand the urethra wall. The FDA approved an IDE
for our BPH system in June 1998. We conducted a Phase I pilot study of our BPH
system at the Montefiore Medical Center in New York commencing in November 1998,
and between September 1999 and April 2000 we conducted an expanded Phase I study
under a revised protocol. In July 2000, the FDA approved the commencement of
multiple-site Phase II studies to collect the safety and efficacy data necessary
for FDA pre-marketing approval for commercialization. These studies have been
approved by and commenced at the Montefiore Medical Center effective October 18,
2000. The Company has also enrolled the University of Maryland Medical Center,
the Pacific Urology Institute in Santa Monica, California, the Regional Urology
Group in Shreveport, Louisiana, four locations of the Linked Urology Research
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Group (in Arlington, Texas, Kansas City, Kansas, Oklahoma City, Oklahoma and
Atlanta, Georgia) and the Michigan Institute of Urology, where the tests are
expected to commence in the near future. The Company also petitioned and
received approval from the FDA to increase the number of test sites from six to
ten and, should that request be granted, several additional urology practices
have shown interest in participating. The Company expects to complete the sample
of patients treated with its procedure by the end of the summer of 2001. The
Company has also requested the FDA to allow it to file its data by module, which
should accelerate the approval process. The Company expects to complete its
filings with, and request Preliminary Marketing Approval from, the FDA early in
2002. If the Phase II trials procure positive results, and FDA approval is
forthcoming, we intend to begin marketing our BPH system by early 2002. If
confirmed in Phase II studies, we expect that our BPH system will offer a
single-visit, outpatient procedure that can provide rapid relief without
subsequent catheterization. By contrast, a number of other systems and
procedures now available often require post-treatment hospitalization,
catheterization and a lag time of weeks to months before symptomatic problems
are reduced.
DUKE UNIVERSITY/CELSION TECHNOLOGY -- NEW HEAT-SENSITIVE LIPOSOMES
We have been working with Duke University on the development of a class
of liposome compounds that can carry chemotherapy drugs to a tumor site and
release their payload quickly when triggered by targeted heat. This research is
part of a larger Duke University project to develop new temperature-sensitive
liposomes, temperature-sensitive gene promoters and related compounds.
Liposomes are man-made microscopic spheres with a liquid membrane,
developed in the 1980's to encapsulate drugs for targeted delivery. Commercial
liposomes can now encapsulate chemotherapeutic drugs, enabling them to avoid
destruction by the body's immune system and allowing them to accumulate in
tumors. With presently available technology, it often takes two to four hours
for commercial liposomes to release their drug contents. Moreover, the amount of
drugs ultimately deposited in or near and absorbed by tumors is lower than the
amount we believe to be deposited and absorbed by the Duke/Celsion
thermo-liposome technology. We believe that all of these factors severely limit
the clinical efficacy of currently available liposome chemotherapy treatments
when compared with our technology.
The Duke/Celsion thermo-liposome technology is intended to allow the
thermo-liposome to open up and release its drug contents within minutes, thus
creating a clinically significant level of drug concentration for effective
therapy. The Company and Duke University are pursuing further preclinical
evaluation and other development work necessary to gather data for the filing of
an IND. We have contracted with a formulation and manufacturing facility in
Vancouver, Canada for initial production. A formulation for a commercial grade
thermo-liposome has been established and an initial production batch of the
thermo-liposome, encapsulating doxorubicin, a widely used chemotherapeutic drug,
has been manufactured. Large animal studies were commenced in April 2001 at
Dartmouth College and Roswell Park Cancer Institute and it is anticipated that
the National Institutes of Health, or NIH, will also initiate studies in the
near future. If the large animal toxicity study is successfully completed, we
expect to apply to the FDA for an IND during 2001 to begin human clinical trials
for the thermo-liposome. The IND must become effective (meaning that FDA does
not raise objections to it within 30 days of its submission, or that any FDA
objections are satisfactorily addressed) before clinical evaluation of new
pharmaceuticals in patients may begin.
LICENSE AGREEMENT WITH DUKE UNIVERSITY FOR THERMO-LIPOSOME TECHNOLOGY
On November 10, 1999, we entered into a license agreement with Duke
University, under which Duke granted us exclusive rights, subject to certain
exceptions, to commercialize and use Duke's thermo-liposome technology.
In addition, in the July 1, 2000 issue of Cancer Research, a Duke
University research scientist reported on his initial use of heat to activate
gene therapy and to increase the production in animals of Interleukin-12, a
genetic protein, in order to delay tumor growth. On August 8, 2000, we entered
into an agreement with Duke University, under which we received the right,
during a six-month period, to negotiate an exclusive license for this
technology. This option to negotiate an exclusive license for this technology
was subsequently extended until February 7, 2002.
SLOAN-KETTERING/CELSION TECHNOLOGY - HEAT-ACTIVATED GENE THERAPY COMPOUNDS
We have also been working with Sloan-Kettering on the development of a
thermo-genetic technology for cancer treatment that employs a heat-activated
genetic modifier. The modifier is designed to improve the effectiveness of, and
lower the treatment dose for, chemotherapy, heat and radiation treatment of
localized cancers by suppressing the action of the protein responsible for
repair of DNA damage in tumor cells. Preclinical studies in vitro suggest that
the genetic modifier has the potential to reduce significantly the
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levels of the radiation or chemotherapy dose required to destroy a tumor, thus
decreasing the toxicity and associated side effects of such treatment on other
areas of the body.
We are conducting initial preclinical tests with scientists from
Sloan-Kettering to evaluate the safety and efficacy of the modifier in an animal
model. In May 2000, we entered into an exclusive worldwide agreement with
Sloan-Kettering for the commercial rights to this heat-activated gene therapy
technology.
DEVELOPMENT AND MARKETING STRATEGY
Our strategic plan is to employ our expertise and experience in the
medical application of focused microwave heat and our relationships with and
license rights from our institutional research partners to develop minimally
invasive or non-invasive, non-toxic treatment technologies with efficacies
significantly exceeding those available from other sources. Our goals for the
next 12 to 24 months are to:
- complete the development, testing and commercialization of our
second generation technology for the eradication or reduction of
cancerous breast tumors;
- complete the clinical testing and commercialization of our BPH
treatment system; and
- pursue the development and testing of targeted drug delivery via
heat-sensitive liposomes for the purpose of concentrating
chemotherapeutic drugs at tumor sites.
Our goals for the next 18 months and beyond are to:
- continue the development of gene therapy to improve
significantly the effectiveness of radiation and chemotherapy on
tumors; and
- initiate, either alone or with partners, the development of
cost-effective enhancements and variations of our technology,
including a version of our Microfocus equipment for treating
prostate and other cancers and additional potential applications
for heat-sensitive liposome therapy and heat-activated gene
therapy in the treatment of inflammatory, infectious and genetic
diseases.
According to statistics published in the American Cancer Society's A
Cancer Journal for Clinicians, there were an average of 183,000 newly diagnosed
breast cancer cases in each of the years from 1995 through 1999, and breast
cancer is one of the leading causes of death among women in the United States.
Also, industry studies estimate that there are approximately 17 million BPH
sufferers in the United States alone, most of whom currently do not elect
treatment because of the effects and expense of existing surgical and drug
treatment alternatives. These studies estimate the overall costs of BPH therapy
at approximately $2.5 to $3.0 billion annually in the United States and $8.0 to
$10.0 billion worldwide for patients currently seeking treatment. We believe
that the potential applications for heat-activated liposomes and heat-activated
gene modifiers also are substantial, and include cancer chemotherapy and the
treatment of inflammatory and infectious diseases.
OTHER INFORMATION
We were incorporated in Maryland in 1982 as A.Y. Cheung Associates, Inc.
and changed our name to Cheung Laboratories, Inc. in 1984 and to Celsion
Corporation in 1998. In May 2000, we reincorporated in Delaware. Our principal
executive offices and other facilities are located at 10220-I Old Columbia Road,
Columbia, MD 21046-1705, and our telephone number is (410) 290-5390. The
Company's web site is located at www.celsion.com. Information found on our
web site should not be considered a part of this Prospectus.
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RISK FACTORS
You should carefully consider the risks described below before making a
decision to invest in our Common Stock. You should also refer to the other
information in this Prospectus, as well as the information incorporated by
reference into this Prospectus, including our financial statements and the
related notes. The risks and uncertainties described below are not the only ones
that could affect our Company. Additional risks and uncertainties of which we
are unaware or that we currently believe are immaterial also may become
important factors affecting our business. If any of the following risks occur,
our business, results of operations or financial condition could be materially
harmed. As a result, the trading price of our Common Stock could decline, and
you could lose all or part of your investment. The terms the "Company," "we,"
"us" and "our" used throughout this Prospectus all refer to Celsion Corporation.
WE HAVE A HISTORY OF LOSSES AND EXPECT CONTINUED LOSSES FOR THE FORESEEABLE
FUTURE.
Since our inception in 1982, our expenses have substantially exceeded
our revenues, resulting in continuing losses and an accumulated deficit of
($29,586,804) at March 31, 2001, including losses of ($2,436,192) for the year
ended September 30, 1999, ($4,547,215) for the year ended September 30, 2000 and
($2,953,008) for the six months ended March 31, 2001. Because we presently have
no significant source of revenues and are committed to continuing our product
research and development program, we will continue to experience significant
operating losses until and unless we complete the development of new products
and these products have been clinically tested, approved by the FDA, and
successfully marketed. In addition, we have funded our operations for many years
primarily through the sale of our securities and have limited working capital
for our product development and other activities.
WE DO NOT EXPECT TO GENERATE SIGNIFICANT REVENUE IN THE FORESEEABLE FUTURE.
We marketed and sold our original microwave thermotherapy products,
which produced modest revenues from 1990 to 1994, but ceased marketing these
products in 1995. We have devoted our resources in ensuing years to developing a
new generation of thermotherapy products, but we cannot market these products
unless and until we complete clinical testing and obtain all necessary
governmental approvals. Accordingly, we have no current source of revenues, much
less profits, to sustain our present operations, and no revenues will be
available unless and until our new products are clinically tested, approved by
the FDA and successfully marketed. We cannot guarantee that any or all of our
products will be successfully tested, approved by the FDA or marketed at any
time in the foreseeable future or at all.
OUR MICROWAVE HEAT THERAPY TECHNOLOGY IS STILL IN THE INITIAL PHASES OF HUMAN
TESTING AND MAY NOT BE SUFFICIENTLY ACCEPTED BY THE MEDICAL COMMUNITY TO SUSTAIN
OUR BUSINESS.
To date, microwave heat therapy has not been widely accepted in the
United States medical community as an effective cancer treatment, with or
without the concurrent use of radiation. We believe that this is primarily due
to the inability of earlier technology adequately to focus and control heat
directed at specific tissue locations and to conclusions that were drawn from a
widely publicized study by the Radiation Oncology Therapy Group that purported
to show that thermotherapy in conjunction with radiation was only marginally
effective. Subsequent to the publication of this study, the U.S. Health Care
Financing Administration, or HCFA (now known as the Centers for Medicare and
Medicaid Services or CMS), established a low medical reimbursement rate for all
thermotherapy equipment designed to be used in conjunction with radiation. While
we believe our new technology is capable of overcoming the limitations of the
earlier technology, the medical community may not embrace the perceived
advantages of our "adaptive phased array," or APA, focused heat therapy without
more extensive testing and clinical experience than we will be able to provide.
To date, our new cancer treatment technology has been subjected only to Phase I
testing on humans, with Phase II trials currently under way. Similarly, our
treatment system for benign prostatic hyperplasia, or BPH, is currently in Phase
II trials. Accordingly, our technology may not prove as effective in practice as
we anticipate based on preliminary testing. If further testing and clinical
practice do not confirm the safety and efficacy of our technology or, even if
further testing and practice produce positive results but the medical community
does not view this new form of heat therapy as effective and desirable, our
efforts to market our new products may fail, with material adverse consequences
to our business. We intend to petition CMS for new reimbursement codes for both
breast cancer and BPH treatments. The success of our business model depends
significantly upon our ability to petition successfully for the new
reimbursement codes. However, we cannot offer any assurances as to when, if
ever, CMS may establish such new reimbursement codes or whether, if established,
such codes will be at levels sufficient for us to carry out our business plan
effectively.
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IF WE ARE NOT ABLE TO OBTAIN NECESSARY FUNDING, WE WILL NOT BE ABLE TO COMPLETE
THE DEVELOPMENT, TESTING AND COMMERCIALIZATION OF OUR TREATMENTS AND PRODUCTS.
We will need substantial additional funding in order to complete the
development, testing and commercialization of our cancer treatment and BPH
products, as well as other potential new products. We currently plan to expend
approximately $7.0 million in the fiscal year ending September 30, 2001, of
which approximately $2.7 million had been expended through the quarter ended
March 31, 2001. As of that date, we had available a total of approximately $6.1
million to fund such expenditures for the remainder of the fiscal year. It is
our current intention both to increase the pace of development work on our
present products and to make a significant commitment to thermosensitive
liposome and gene therapy research and development projects. The increase in the
scope of present development work and the commitment to these new projects will
require additional external funding, at least until we are able to begin
marketing our products. We do not have any committed sources of financing and
cannot offer any assurances that additional funding will be available in a
timely manner, on acceptable terms or at all.
If adequate funding is not available, we may be required to delay, scale
back or eliminate certain aspects of our operations or attempt to obtain funds
through unfavorable arrangements with partners or others that may force us to
relinquish rights to certain of our technologies, products or potential markets
or that could impose onerous financial or other terms. Furthermore, if we cannot
fund our ongoing development and other operating requirements, particularly
those associated with our obligation to conduct clinical trials under our
licensing agreements, we will be in breach of these licensing agreements and
could therefore lose our license rights, which could have material adverse
effects on our business.
OUR BUSINESS IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND WE MAY NOT BE
ABLE TO SECURE THE GOVERNMENT APPROVALS NEEDED TO DEVELOP AND MARKET OUR
PRODUCTS.
The FDA and similar government agencies in foreign countries impose
substantial requirements before permitting the introduction of medical products,
including lengthy and detailed laboratory and clinical testing procedures,
sampling activities and other costly and time-consuming procedures. Satisfaction
of these requirements typically takes several years or more and varies
substantially based upon the type, complexity and novelty of the product. For
medical systems such as our breast cancer treatment product, the FDA has thus
far required data from a Phase I clinical feasibility and safety demonstration
using at least ten patients. For a Phase II patient study that addresses safety
and efficacy, we are being required to test 173 patients in order to support an
application for commercialization approval. Similarly, the BPH treatment system
will require data from a Phase II study involving 120 patients subject to
treatment using our system, as well as an additional 40 patients using an
alternative drug treatment.
Government regulation, including the need for FDA approval, may delay
marketing of our new products for a considerable period of time, impose costly
procedures upon our activities and provide an advantage to larger companies that
compete with us. There can be no assurance that we will receive FDA or other
regulatory approvals for any products we develop on a timely basis or at all.
Any delay in obtaining, or failure to obtain, necessary approvals would
materially and adversely affect the marketing of any of our contemplated
products and our ability to generate revenue. Further, regulation of
manufacturing facilities by federal, state, local and other authorities is
subject to change. Any additional regulation could result in limitations or
restrictions on our ability to utilize any of our technologies, thereby
adversely affecting our business.
OUR BUSINESS DEPENDS ON LICENSE AGREEMENTS TO USE PATENTED TECHNOLOGIES THAT WE
HAVE ENTERED INTO WITH THIRD PARTIES. THE LOSS OF ANY OF OUR RIGHTS UNDER THESE
AGREEMENTS COULD IMPAIR OUR ABILITY TO DEVELOP AND MARKET OUR PRODUCTS.
Currently, we have two utility patents pending in the U.S. Patent &
Trademark Office. One is directed to our breast cancer treatment system, and the
other is directed to our BPH treatment system. However, even when our pending
applications mature into U.S. patents, our business still would depend on
license agreements that we have entered into with third parties until the third
parties' patents expire.
Our success will depend, in substantial part, on our ability to maintain
our rights under license agreements granting us rights to use patented
technology. We have entered into exclusive license agreements with MIT, for APA
technology and with MMTC, Inc., or MMTC, a privately owned developer of medical
devices, for microwave balloon catheter technology. We have also entered into a
license agreement with Duke University, under which we have exclusive rights to
commercialize medical treatment products and procedures based on Duke
University's thermo-liposome technology and a license agreement with Memorial
Sloan-Kettering Cancer Center under which we have rights to commercialize
certain gene therapy products. The MIT, MMTC, Duke University and
Sloan-Kettering agreements each contains license fee, royalty and/or research
support provisions, testing and regulatory milestones, and other performance
requirements that we must meet by certain deadlines. If we were
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to breach these or other provisions of our license and research agreements, we
could lose our ability to use the applicable technology, as well as compensation
for our efforts in developing or exploiting the technology. Also, loss of our
rights under the MIT license agreement would prevent us from proceeding with
most of our current product development efforts, which are dependent on licensed
APA technology. Any such loss of rights and access to technology would have a
material adverse effect in our business.
Further, we cannot guarantee that any patent or other technology rights
licensed to us by others will not be challenged or circumvented successfully by
third parties, or that the rights granted will provide adequate protection to
us. We are aware of patent applications and issued patents belonging to others,
and it is not clear whether any of these patents or applications, or other
patent applications of which we may not have any knowledge, will require us to
alter our potential products or processes, pay licensing fees or cease certain
activities. Litigation, which could result in substantial costs, may also be
necessary to enforce any patents issued to or licensed by us or to determine the
scope and validity of others' claimed proprietary rights. We also rely on trade
secrets and confidential information that we seek to protect, in part, by
confidentiality agreements with our corporate partners, collaborators, employees
and consultants. We cannot guarantee that these agreements will not be breached,
that we will have adequate remedies for any such breach or that our trade
secrets will not otherwise become known or will not be discovered independently
by competitors.
TECHNOLOGIES FOR THE TREATMENT OF CANCER ARE SUBJECT TO RAPID CHANGE AND THE
DEVELOPMENT OF TREATMENT STRATEGIES THAT ARE MORE EFFECTIVE THAN OUR
THERMOTHERAPY TECHNOLOGY COULD RENDER OUR TECHNOLOGY OBSOLETE.
Various methods for treating cancer are the subject of extensive
research and development. Many possible treatments that are being researched, if
successfully developed, may not require, or may supplant, the use of our
thermotherapy technology. These alternate treatment strategies include the use
of radio frequency, laser and ultrasound energy sources. The successful
development and acceptance of any or all of these alternative forms of treatment
could render our technology obsolete.
WE MAY NOT BE ABLE TO HIRE OR RETAIN KEY OFFICERS OR EMPLOYEES WHOM WE NEED TO
IMPLEMENT OUR BUSINESS STRATEGY.
Our success depends on the continued contributions of our executive
officers, scientific and technical personnel and consultants, and on our ability
to attract new personnel as we seek to implement our business strategy. During
our operating history, we have assigned many key responsibilities to a
relatively small number of individuals. The competition for qualified personnel
is intense, and the loss of services of certain key personnel or our inability
to attract additional personnel to fill critical positions as we implement our
business strategy could adversely affect our business.
THE SUCCESS OF OUR PRODUCTS MAY BE HARMED IF THE GOVERNMENT, PRIVATE HEALTH
INSURERS AND OTHER THIRD-PARTY PAYORS DO NOT PROVIDE SUFFICIENT COVERAGE OR
REIMBURSEMENT.
Our ability to commercialize our thermotherapy technology successfully
will depend in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health insurers and other third-party
payors. The reimbursement status of newly approved medical products is subject
to significant uncertainty. We cannot guarantee that adequate third-party
insurance coverage will be available for us to establish and maintain price
levels sufficient for realization of an appropriate return on our investment in
developing new therapies. Government, private health insurers and other
third-party payors are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for new therapeutic
products approved for marketing by the FDA. Accordingly, even if coverage and
reimbursement are provided by government, private health insurers and
third-party payors for uses of our products, the market acceptance of these
products would be adversely affected if the reimbursement available proves to be
unprofitable for health care providers.
WE FACE INTENSE COMPETITION AND THE FAILURE TO COMPETE EFFECTIVELY COULD
ADVERSELY AFFECT OUR ABILITY TO DEVELOP AND MARKET OUR PRODUCTS.
There are many companies and institutions engaged in research and
development of thermotherapy technologies, both for cancer and prostate disease
products, that seek treatment outcomes similar to those we are pursuing. In
addition, a number of companies and institutions are pursuing alternative
treatment strategies through the use of microwave, infrared, and radio
frequency, laser and ultrasound energy sources, all of which appear to be in the
early stages of development and testing. We believe that the level of interest
by others in investigating the potential of thermotherapy and alternative
technologies will continue and may increase. Potential competitors engaged in
all areas of cancer and prostate treatment research in the United States and
other countries include, among others, major pharmaceutical and chemical
companies, specialized technology companies, and universities and other research
institutions. Most of our competitors and potential competitors have
substantially greater financial, technical, human and other
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resources, and may also have far greater experience, than we do, both in
preclinical testing and human clinical trials of new products and in obtaining
FDA and other regulatory approvals. One or more of these companies or
institutions could succeed in developing products or other technologies that are
more effective than the products and technologies we have been or are
developing, or which would render our technology and products obsolete and
non-competitive. Furthermore, if we are permitted to commence commercial sales
of products, we will also be competing, with respect to manufacturing efficiency
and marketing, with companies having substantially greater resources and
experience in these areas.
LEGISLATIVE AND REGULATORY CHANGES AFFECTING THE HEALTH CARE INDUSTRY COULD
ADVERSELY AFFECT OUR BUSINESS.
There have been a number of federal and state proposals during the last
few years to subject the pricing of health care goods and services to government
control and to make other changes to the United States health care system. It is
uncertain which legislative proposals, if any, will be adopted (or when) or what
actions federal, state, or private payors for health care treatment and services
may take in response to any health care reform proposals or legislation. We
cannot predict the effect health care reforms may have on our business and we
can offer no assurances that any of these reforms will not have a material
adverse effect on our business.
WE MAY BE SUBJECT TO SIGNIFICANT PRODUCT LIABILITY CLAIMS AND LITIGATION.
Our business exposes us to potential product liability risks inherent in
the testing, manufacturing and marketing of human therapeutic products. We
presently have product liability insurance limited to $5,000,000 per incident.
If we were to be subject to a claim in excess of this coverage or to a claim not
covered by our insurance and the claim succeeded, we would be required to pay
the claim with our own limited resources, which could have a material adverse
effect on our business. In addition, liability or alleged liability could harm
our business by diverting the attention and resources of our management and by
damaging our reputation.
WE DEPEND ON THIRD-PARTY SUPPLIERS TO PROVIDE US WITH COMPONENTS REQUIRED FOR
OUR PRODUCTS AND MAY NOT BE ABLE TO OBTAIN THESE COMPONENTS ON FAVORABLE TERMS
OR AT ALL.
We are currently not manufacturing any products, but are using our
facilities to assemble prototypes of our equipment for research and development
purposes. We currently purchase certain specialized microwave and thermometry
components and applicator materials and the catheter unit used for our BPH
equipment from single or limited source suppliers because of the small
quantities involved. While we have not experienced any significant difficulties
in obtaining these components, the loss of an important current supplier could
require us to obtain a replacement supplier, which might result in delays and
additional expense in being able to make prototype equipment available for
clinical trials and other research purposes. Also, in the event we succeed in
marketing our products, we will most likely use outside contractors to supply
components and to assemble finished equipment, which could cause us to become
dependent on key vendors.
THE EXERCISE OR CONVERSION OF OUR OUTSTANDING OPTIONS, WARRANTS AND CONVERTIBLE
PREFERRED STOCK COULD RESULT IN SIGNIFICANT DILUTION OF YOUR OWNERSHIP INTEREST
IN COMMON STOCK.
Options and Warrants. As of May 31, 2001, we had outstanding warrants
and options to purchase a total of 9,406,176 underlying shares having exercise
prices ranging from $0.13 to $5.00 per share (and a weighted average exercise
price of approximately $0.67 per share). Most of the prices are below the
current market price of our Common Stock. If holders choose to exercise such
warrants and options, the resulting purchase of a substantial number of shares
of our Common Stock at prices below the current market price of the Common Stock
would have a dilutive effect on our stockholders and could adversely affect the
market price of our issued and outstanding Common Stock. In addition, holders of
these options and warrants who have the right to require registration of our
Common Stock under certain circumstances and who elect to require such
registration, or who exercise their options or warrants and then satisfy the
one-year holding period and other requirements of Rule 144 of the Securities Act
of 1933, will be able to sell in the public market shares of Common Stock
purchased upon such exercise.
Preferred Stock. As of April 30, 2001, we had outstanding a total of
952.5 shares of Series A 10% Convertible Preferred Stock (plus 127 shares
representing accrued dividends). The shares of Series A Preferred Stock are
subject to exchange and conversion privileges upon the occurrence of major
events, including a public offering of our securities or our merger into a
public company. In addition, the holders of the Series A Preferred Stock are
entitled to convert their preferred shares into shares of Common Stock at a
conversion price of $0.41 per share of Common Stock, subject to certain
adjustments. The conversion of the Series A Preferred Stock would have a
dilutive effect on our stockholders and could adversely affect the market price
of our issued and outstanding Common Stock. The holders of the Series A
Preferred Stock also have registration rights at the time we undertake a
registered public offering of securities. Even without such registration,
holders of the Series A Preferred Stock who satisfy the
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requirements of Rule 144 of the Securities Act of 1933 will be able to sell in
the public market shares of Common Stock acquired upon the conversion of Series
A Preferred Stock. There are also outstanding warrants to purchase 38 shares of
Series A Preferred Stock.
IF THE PRICE OF OUR SHARES REMAINS LOW, IT MAY BE DELISTED BY THE AMERICAN STOCK
EXCHANGE AND BECOME SUBJECT TO SPECIAL RULES APPLICABLE TO LOW PRICED STOCKS.
Our Common Stock currently trades on The American Stock Exchange (the
"Amex"). The Amex, as a matter of policy, will consider the suspension of
trading in, or removal from listing of, any stock when, in the opinion of the
Amex, (i) the financial condition and/or operating results of an issuer appear
to be unsatisfactory; (ii) it appears that the extent of public distribution or
the aggregate market value of the stock has become so reduced as to make further
dealings on the Amex inadvisable; (iii) the issuer has sold or otherwise
disposed of its principal operating assets; or (iv) the issuer has sustained
losses which are so substantial in relation to its overall operations or its
existing financial condition has become so impaired that it appears
questionable, in the opinion of the Amex, whether the issuer will be able to
continue operations and/or meet its obligations as they mature. For example, the
Amex will consider suspending dealings in or delisting the stock of an issuer if
the issuer has sustained losses from continuing operations and/or net losses in
its five most recent fiscal years. Another instance where the Amex would
consider suspension or delisting of a stock is if it has been selling for a
substantial period of time at a low price per share and the issuer fails to
effect a reverse split of such stock within a reasonable time after being
notified that the Amex deems such action to be appropriate. We have sustained
net losses for our last five fiscal years and our Common Stock has been trading
at relatively low prices. Therefore, our Common Stock may be at risk of
delisting by the Amex. Upon any such delisting, the Common Stock would become
subject to the penny stock rules of the SEC, which generally are applicable to
equity securities with a price of less than $5.00 per share (other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the SEC that provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with bid and offer quotations for
the penny stock, the compensation of the broker-dealer and its salesperson in
the transaction and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
require that, prior to a transaction in a penny stock that is not otherwise
exempt from such rules, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements are likely to have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. If our Common Stock becomes subject to the penny stock rules,
our stockholders may find it more difficult to sell their shares.
OUR STOCK PRICE COULD BE VOLATILE.
Market prices for our Common Stock and the securities of other medical
and high technology companies have been volatile. Factors such as announcements
of technological innovations or new products by us or our competitors,
government regulatory action, litigation, patent or proprietary rights
developments and market conditions for medical and high technology stocks in
general can have a significant impact on the market for our Common Stock.
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD PREVENT
OR DELAY A CHANGE IN CONTROL.
Our Certificate of Incorporation and Bylaws may discourage, delay or
prevent a merger or acquisition that a stockholder may consider favorable by
authorizing the issuance of "blank check" preferred stock. In addition, our
classified Board of Directors may discourage such transactions by increasing the
amount of time necessary to obtain majority representation on our Board. Certain
other provisions of our Bylaws and of Delaware law may also discourage, delay or
prevent a third party from acquiring or merging with us.
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USE OF PROCEEDS
The Selling Stockholders will receive all of the net proceeds from the sale of
their respective Shares; we will not receive any proceeds from these sales. We
will, however, receive proceeds from any exercises of the Warrants. The holders
of the Warrants are under no obligation to exercise them at any time or at all.
The following table sets forth the number of Shares subject to Warrants
exercisable at each exercise price.
EXERCISE PRICE
NUMBER OF SHARES SUBJECT TO WARRANTS (PER SHARE)
---------------------------------------- ---------------
293,479 $0.25
100,000 $0.50
300,000 $0.69
300,000 $1.75
150,000(1) $5.00
- -----
(1) One Warrant exercisable to purchase a share of Common Stock at $5.00 is
issuable upon the exercise of every two Warrants to purchase shares of
Common Stock at $1.75 per share.
The exercise price for the Warrants is payable in cash or, in certain
instances, by surrendering a number of shares of our Common Stock having a fair
market value equal to the applicable exercise price. If all of the Warrants are
exercised for cash, we will receive aggregate consideration of $1,605,370. We
intend to use any proceeds from exercise of the Warrants for working capital and
general corporate purposes.
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RESALES BY SELLING STOCKHOLDERS
This Prospectus relates to the proposed resale by the Selling
Stockholders of the Shares, consisting of up to 1,143,479 shares of Common Stock
issuable upon the exercise of the Warrants. The following table sets forth, as
of June 14, 2001, certain information with respect to the persons for whom the
Company is registering the Shares for resale to the public. Except as indicated
by footnote below, no such person has had a material relationship with or has
held any position or office with the Company within the last three years. The
Company will not receive any of the proceeds from the sale of the Shares, but
may receive up to $1,605,370 upon the exercise, for cash, of the Warrants.
SECURITIES SECURITIES
SECURITIES BENEFICIALLY OFFERED BENEFICIALLY OWNED
OWNED PRIOR TO OFFERING (1) HEREBY (2) AFTER OFFERING (3)
----------------------------- ------------ ----------------------------
COMMON STOCK COMMON
NAME OF SELLING STOCKHOLDER WARRANTS STOCK AMOUNT PERCENT
- ------------------------------ ------------- ------------- ------------ ------------- -------------
M.H. Meyerson & Co., Inc.(4) -0- 450,000(4) 450,000 -0- 0%
John Dunn 24,442 200,000(5) 200,000 38,000 *
Howard Conyack 75,442 200,000(5) 200,000 38,000 *
Nace Resources, Inc. 312,501(6) 293,479 293,479 312,501(6) *
- ----------
(1) We have computed "beneficial ownership" in accordance Rule 13d-3(d)
promulgated by the SEC under the Securities Exchange Act of 1934 for
purposes of this table. Therefore, the table reflects a person as having
"beneficial ownership" of shares of Common Stock if such person has the
right to acquire such shares within 60 days of May 31, 2001. For
purposes of computing the percentage of outstanding shares of Common
Stock held by each person or group of persons named above, we have
assumed to be outstanding any security which such person or persons has
or have the right to acquire within that 60-day period. However,
securities that may be acquired within that 60-day period are not deemed
to be outstanding for purposes of computing the percentage ownership of
any other person. Not ( ) withstanding the foregoing, for purposes of
this table, we have not, however, included the Shares underlying
warrants and registered hereby under the column "Securities Beneficially
Owned Prior to Offering - Common Stock." Instead, the Shares are
reflected under the column "Securities Offered Hereby." Except as
indicated in the footnotes to this table and pursuant to applicable
community property laws, the Company believes, based on information
supplied by such persons, that the persons named in this table have sole
voting and investment power with respect to all shares of Common Stock
which they beneficially own.
(2) Represents the maximum number of shares of Common Stock issuable to each
Selling Stockholder upon exercise in full of Warrants issued or
issuable thereto.
(3) Assumes the eventual sale of all Shares by each Selling Stockholder.
There can be no assurance that any Selling Stockholder will sell any or
all of the Shares owned thereby or issuable thereto.
(4) On January 17, 2001, we entered into an investment banking agreement
with M. H. Meyerson & Co., Inc. The agreement provides for the issuance
of Warrants to purchase 300,000 shares of Common Stock, exercisable
immediately at $1.75 per share and for the issuance, for every two
Warrants exercised at $1.75 per share, of a Warrant to purchase one
additional share of Common Stock exercisable at $5.00 per share. The
Shares being registered for resale by Meyerson are those issuable upon
exercise of the Warrants granted pursuant to that agreement. Because
such Warrants are currently exercisable, Meyerson may be deemed to be
the beneficial owner of the shares of Common Stock underlying such
Warrants pursuant to Rule 13d-3(d) ) promulgated by the SEC under the
Securities Exchange Act of 1934.
(5) All of the Warrants are currently exercisable and, therefore, this
Selling Stockholder may be deemed to be the beneficial owner of the
shares of Common Stock underlying such Warrants pursuant to Rule
13d-3(d) promulgated by the SEC under the Securities Exchange Act of
1934.
(6) Consists of 312,501 shares of Common Stock owned by an Individual
Retirement Account for the Benefit of Stuart Fuchs, an affiliate of Nace
Resources, Inc.
* Less than 1%.
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PLAN OF DISTRIBUTION
The Selling Stockholders may, in their discretion, offer and sell Shares
from time to time on The American Stock Exchange or otherwise at prices and on
terms then prevailing at prices related to the then-current market price, or at
negotiated prices. The distribution of the Shares may be effected from time to
time in one or more transactions including, without limitation:
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- transactions involving block trades;
- purchases by a broker, dealer or underwriter as principal and
resale by that person for its own account under this Prospectus;
- put or call option transactions;
- privately negotiated transactions; or
- by any other legally available means.
In effecting sales, broker-dealers or agents engaged by the Selling
Stockholders may arrange for other broker-dealers or agents to participate. From
time to time, one or more of the Selling Stockholders may pledge, hypothecate or
grant a security interest in some or all of the Shares owned thereby, and the
pledgees, secured parties or persons to whom such securities have been
hypothecated shall, upon foreclosure in the event of default, be deemed to be
Selling Stockholders under this Prospectus. In addition, the Selling
Stockholders may from time to time sell short the Common Stock of the Company
and, in such instances, this Prospectus may be delivered in connection with such
short sale and the Shares offered hereby may be used to cover such short sale.
Sales of Selling Stockholders' Shares may also be made pursuant to Rule
144 under the Securities Act of 1933, where applicable. The Selling
Stockholders' Shares may also be offered in one or more underwritten offerings,
on a firm commitment or best efforts basis. The Company will receive no proceeds
from the sale of Shares by the Selling Stockholders, although it will receive
the exercise price upon any exercise of Warrants.
To the extent required under the Securities Act of 1933, the aggregate
amount of Selling Stockholders' Common Stock being offered and the terms of the
offering, the names of any such agents, brokers, dealers or underwriters and any
applicable commission with respect to a particular offer will be set forth in an
accompanying Prospectus supplement. Any underwriters, dealers, brokers or agents
participating in the distribution of the Shares may receive compensation in the
form of underwriting discounts, concessions, commissions or fees from a Selling
Stockholder and/or purchasers of Selling Stockholders' Shares, for whom they may
act. In addition, Selling Stockholders may be deemed to be underwriters under
the Securities Act and any profits on the sale of Shares by them may be deemed
to be discounts or commissions under the Securities Act. Selling Stockholders
may have other business relationships with the Company or its affiliates in the
ordinary course of business.
From time to time each of the Selling Stockholders may transfer, pledge,
donate or assign their Shares to lenders, family members and others and each of
such persons will be deemed to be a Selling Stockholder for purposes of this
Prospectus. The number of Shares beneficially owned by those Selling
Stockholders who transfer, pledge, donate or assign Shares will decrease as and
when they take such actions. The plan of distribution for the Shares sold
hereunder will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be Selling Stockholders hereunder.
Without limiting the foregoing, in connection with distributions of the
Shares, a Selling Stockholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the Common
Stock in the course of hedging the positions they assume with such Selling
Stockholder. A Selling Stockholder may also enter into option or other
transactions with broker-dealers that involve the delivery of Shares to the
broker-dealers, who may then resell or otherwise transfer such Shares. A Selling
Stockholder may also lend or pledge Shares to a broker-dealer and the
broker-dealer may sell the Shares so borrowed or, upon default, may sell or
otherwise transfer the pledged Shares.
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Under applicable rules and regulations under the Securities Exchange
Act, any person engaged in the distribution of the Common Stock may not bid for
or purchase shares of Common Stock during a period which commences one business
day (five business days, if the Company's public float is less than $25 million
or its average daily trading volume is less than $100,000) prior to such
person's participation in the distribution, subject to exceptions for certain
passive market making activities. In addition and without limiting the
foregoing, each Selling Stockholder will be subject to applicable provisions of
the Securities Exchange Act and the rules and regulations thereunder, including,
without limitation, Regulation M, which provisions may limit the timing of
purchases and sales of shares of the Company's Common Stock by such Selling
Stockholder.
The Company is bearing all costs relating to the registration of the
Shares (other than fees and expenses, if any, of counsel or other advisors to
the Selling Stockholders). Any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the Shares will be borne by the
Selling Stockholders selling such Shares.
The Company may indemnify the Selling Stockholders in certain
circumstances, against certain liabilities, including liabilities arising under
the Securities Act of 1933.
LEGAL MATTERS
The legality of the securities in this offering has been passed upon for
us by our counsel, Venable, Baetjer, Howard & Civiletti, LLP of Washington, DC.
EXPERTS
Our financial statements at September 30, 1998, 1999 and 2000 for the
years ended September 30, 1998, 1999 and 2000 incorporated by referenced into
this Prospectus from our Annual Report on Form 10-K for the year ended September
30, 2000 have been audited by Stegman & Co., independent accountants, and are so
incorporated by reference in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
We estimate that our expenses to be paid in connection with the offering
(other than placement agent discounts, commissions and reasonable expense
allowances), all of which will be paid by the Company, will be as follows:
SEC Registration Fee...................... $
American Stock Exchange Listing Fee $ 9,000
Accounting Fees and Expenses.............. $ 500
Legal Fees and Expenses................... $12,000*
Printing and Engraving.................... $ 1,500*
Miscellaneous............................. $ 5,000
--------
Total $
========
- -----
*These are estimated amounts.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is organized under the laws of the State of Delaware. Our
Certificate of Incorporation provides that we shall indemnify our current and
former directors and officers, and may indemnify our current and former
employees and agents, against any and all liabilities and expenses incurred in
connection with their services in those capacities to the maximum extent
permitted by Delaware law.
The Delaware General Corporation Law (the "DGCL") provides that a
Delaware corporation has the power generally to indemnify its current and former
directors, officers, employees and other agents (each, a "Corporate Agent")
against expenses and liabilities (including amounts paid in settlement) in
connection with any proceeding involving such person by reason of his being a
Corporate Agent, other than a proceeding by or in the right of the corporation,
if such person acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal proceeding, such person had no reasonable cause to believe his
conduct was unlawful.
In the case of an action brought by or in the right of the corporation,
indemnification of a Corporate Agent is permitted if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. However, no indemnification is permitted in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that the
court in which such proceeding was brought shall determine upon application that
despite the adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to such indemnification.
To the extent that a Corporate Agent has been successful on the merits
or otherwise in the defense of such proceeding, whether or not by or in the
right of the corporation, or in the defense of any claim, issue or matter
therein, the corporation is required to indemnify such person for expenses in
connection therewith. Under the DGCL, the corporation may advance expenses
incurred by a Corporate Agent in connection with a proceeding, provided that the
Corporate Agent undertakes to repay such amount if it shall ultimately be
determined that such person is not entitled to indemnification. Our Certificate
of Incorporation requires us to advance expenses to any person entitled to
indemnification, provided that such person undertakes to repay the advancement
if it is determined in a final judicial decision from which there is no appeal
that such person is not entitled to indemnification.
The power to indemnify and advance the expenses under the DGCL does not
exclude other rights to which a Corporate Agent may be entitled to under the
Certificate of Incorporation, by laws, agreement, vote of stockholders or
disinterested directors or otherwise.
Our Certificate of Incorporation permits us to secure insurance on
behalf of our directors, officers, employees and agents for any expense,
liability or loss incurred in such capacities, regardless of whether the
Certificate of Incorporation or Delaware law would permit indemnification
against such expense, liability or loss.
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The purpose of these provisions is to assist us in retaining qualified
individuals to serve as our directors, officers, employees and agents by
limiting their exposure to personal liability for serving as such.
ITEM 16. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------
4.1 Certificate of Incorporation of Celsion Corporation (incorporated
by reference to Exhibit 3.1.1 to the Annual Report on Form 10-K of
the Company for the year ended September 30, 2000).
4.2 Certificate of Amendment of the Certificate of Incorporation of
Celsion Corporation (incorporated by reference to Appendix B of the
Definitive Proxy Statement on Form 14A of the Company as filed with
the SEC on April 14, 2001).
4.3 Form of Series 250 Warrant issued to DunnHughes Holding, Inc. to
purchase Common Stock of the Company (incorporated by reference to
Exhibit 10.12 to the Annual Report on Form 10-K of the Company for
the year ended September 30, 1998).
4.4 Form of Series 300 Warrant issued to Nace Resources, Inc. to
purchase Common Stock of the Company (incorporated by reference to
Exhibit 10.13 to the Annual Report on Form 10-K of the Company for
the year ended September 30, 1998).
5.1+ Opinion of Venable, Baetjer, Howard & Civiletti, LLP re:
Legality.
10.25+ Investment Banking Agreement dated January 17, 2001 between M. H.
Meyerson & Co., Inc. and the Company.
23.1+ Consent of Stegman & Company, independent public accountants
of the Company.
23.2+ Consent of Venable, Baetjer, Howard & Civiletti, LLP.
(included in Exhibit 5.1).
24.1+ Power of Attorney (included in Signature Page).
- ----------
+ Denotes exhibits filed herewith.
ITEM 17. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act that are incorporated
by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment to this registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective
amendment to any of the securities being registered which remain unsold at the
termination of the offering.
(B) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Under the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Columbia, Maryland, on the 5th day of July, 2001.
CELSION CORPORATION
By: /s/ SPENCER J. VOLK
-------------------------------------
Spencer J. Volk
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Spencer J. Volk and John Mon and
each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, or any related
registration statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their, or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
------------------------------------------ ----------------------------------- ---------------
/s/ SPENCER J. VOLK Director, President and Chief July 5, 2001
------------------------------------------ Executive Officer (Principal
Spencer J. Volk Executive Officer)
/s/ TONY DEASEY Senior Vice President and Chief July 5, 2001
------------------------------------------ Financial Officer (Principal
Tony Deasey Financial and Accounting Officer)
/s/ JOHN MON Vice President, Secretary, July 5, 2001
------------------------------------------ Treasurer and Director
John Mon
/s/ AUGUSTINE Y. CHEUNG Chairman of the Board July 5, 2001
------------------------------------------
Augustine Y. Cheung
/s/ LASALLE D. LEFFALL, JR. Director July 5, 2001
------------------------------------------
LaSalle D. Leffall, Jr.
/s/ MAX E. LINK Director July 5, 2001
------------------------------------------
Max E. Link
/s/ CLAUDE TIHON Director July 5, 2001
------------------------------------------
Claude Tihon
/s/ KRIS VENKAT Director July 5, 2001
------------------------------------------
Kris Venkat
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