UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period ended March 31, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________to _________
Commission file number: 000-14242
CELSION CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-1256615
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State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
10220-I Old Columbia Road, Columbia, Maryland 21046-1705
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (410) 290-5390
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
As of May 14, 2002, the Registrant had outstanding 89, 849, 847 shares of Common
Stock, $.01 par value.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
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Index to Financial Statements
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Page
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Balance Sheets as of March 31, 2002 and September 30, 2001 3
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Statements of Operations for the Three and Six Month Periods 5
Ended March 31, 2002 and 2001
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Statements of Cash Flows for the Six Month Periods Ended March 6
31, 2002 and 2001
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Notes to Financial Statements 7
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2
CELSION CORPORATION
BALANCE SHEETS
March 31, 2002 and September 30, 2001
ASSETS
------
March 31, 2002 September 30, 2001
(Unaudited) ------------------
----------
Current assets:
Cash and cash equivalents ..................... $3,530,095 $2,510,136
Accounts receivable - trade ................... 2,475 1,205
Inventories ................................... 47,730 --
Prepaid expenses .............................. 50,102 --
Total current assets .................... 3,630,402 2,511,341
---------- ----------
Property and equipment - at cost:
Furniture and office equipment ................ 252,572 229,643
Laboratory and shop equipment ................ 89,354 87,193
---------- ----------
341,926 316,836
Less accumulated depreciation .............. 155,227 127,556
---------- ----------
Net value of property and equipment ..... 186,699 189,280
---------- ----------
Other assets:
Deposits ..................................... 395,603 179,537
Patent licenses (net of amortization ) ....... 68,788 76,703
---------- ----------
Total other asset .......................... 464,391 106,240
---------- ----------
Total assets ......................... $4,281,492 $2,956,861
========== ==========
3
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 2002 September 30, 2001
(Unaudited) ------------------
-------------
Current liabilities:
Accounts payable - trade ..................................... $ 450,239 $ 145,520
Other accrued liabilities .................................... 225,142 126,921
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Total current liabilities .............................. 675,381 272,441
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Long-term Liabilities:
Security deposit ............................................ -- 15,203
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Total liabilities ...................................... 675,381 287,644
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Stockholders' equity:
Capital stock $.01 par value;150,000,000 shares
authorize 89,749,847 and 76,876,761 shares issued
and outstanding at March 31, 2002 and
September 30, 2001, respectively ................................ 897,498 768,768
Series A 10% Convertible Preferred Stock -- $1,000 par value,
7,000 shares authorized, 1,086 and 1,099 shares
issued and outstanding at
March 31, 2002 and September 30, 2001, respectively ............. 1,085,875 1,099,584
Additional paid-in capital ................................... 40,667,825 34,406,022
Accumulated deficit ......................................... (39,045,087) (33,605,157)
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Total stockholders' equity ............................ 3,606,111 2,669,217
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Total liabilities and stockholders' equity ...... $ 4,281,492 $ 2,956,861
============= =============
See accompanying notes.
4
CELSION CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Six Months
Ended March 31, Ended March 31,
-------------------------- --------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Revenue:
Hyperthermia sales and parts ... $ -- $ 1,858 $ -- $ 1,858
---------- ---------- ---------- ----------
Total revenue .............. -- 1,858 -- 1,858
---------- ---------- ---------- ----------
Cost of sales .................. -- -- -- --
---------- ---------- ---------- ----------
Gross profit ................ -- 1,858 -- 1,858
---------- ---------- ---------- ----------
Operating expenses:
General and administrative ...... 1,998,406 982,792 2,539,653 1,913,951
Research and development ....... 1,759,775 669,820 2,882,996 1,248,321
---------- ---------- ---------- ----------
Total operating expenses .. 3,758,181 1,652,612 5,422,649 3,162,272
---------- ---------- ---------- ----------
Loss from operations .............. (3,758,181) (1,650,754) (5,422,649) (3,160,414)
Loss on disposal of property ...... (1,825) -- (1,825) --
and equipment ---------- ---------- ---------- ----------
Interest income ................... 18,749 94,833 29,809 207,406
---------- ---------- ---------- ----------
Loss before income taxes .......... (3,741,257) (1,555,871) (5,394,665) (2,953,008)
Income taxes ...................... -- -- -- --
---------- ---------- ---------- ----------
Net loss .......................... $ (3,741,257) $ (1,555,871) $ (5,394,665) $ (2,953,008)
========== ========== ========== ==========
Net loss per common share (basic) . $ (0.04) $ (0.02) $ (0.06) $ (0.04)
========== ========== ========== ==========
Weighted average shares outstanding 89,291,710 71,109,723 84,008,495 67,775,376
========== ========== ========== ==========
See accompanying notes.
5
CELSION CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended March 31,
2002 2001
----------- -----------
Cash flows from operating activities:
Net loss ....................................... $(5,394,665) $(2,953,008)
Noncash items included in net loss:
Depreciation and amortization ............... 39,091 30,498
Common stock and stock options issued
for operating expenses .................. 266,829 313,591
Preferred shares converted into common stock -- 216,416
Legal settlement expense .................... 476,724 --
Loss on disposal of property and equipment .. 1,825 --
Net changes in:
Accounts receivable ......................... (1,270) 7,136
Inventories ................................. (47,730) (4,455)
Prepaid expenses ............................ (50,102) (83,111)
Other assets ................................ (216,066) (100,000)
Accounts payable - trade .................... 304,719 (5,282)
Accrued interest payable .................... -- (155,373)
Other liabilities ........................... 83,018 5,294
----------- -----------
Net cash used by operating activities ... (4,537,627) (2,728,294)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment .......... (30,420) (74,652)
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Net cash used by investing activities ...... (30,420) (74,652)
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Cash flows from financing activities:
Proceeds of stock issuances ................. 5,588,006 115,000
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Net cash provided by financing activities 5,588,006 115,000
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Net increase (decrease) in cash ............ 1,019,959 (2,687,946)
Cash at beginning of period ................ 2,510,136 8,820,196
----------- -----------
Cash at end of the period ................... $ 3,530,095 $ 6,132,250
=========== ===========
See accompanying notes.
6
CELSION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The accompanying unaudited condensed financial statements of Celsion
Corporation (the "Company"), have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. In the opinion of
management, all adjustments, consisting only of normal recurring accruals
considered necessary for a fair presentation, have been included in the
accompanying unaudited financial statements. Operating results for the six
months ended March 31, 2002 are not necessarily indicative of the results that
may be expected for any other interim period or for the full year ending
September 30, 2002. For further information, refer to the financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 2001.
Note 2. Common Stock Outstanding and Per Share Information
For the quarters and six-month periods ended March 31, 2002 and 2001,
per share data is based on the weighted average number of shares of Common Stock
outstanding. Outstanding warrants and options that can be converted into Common
Stock are not included, as their effect is anti-dilutive.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Forward-Looking Statements
Statements and terms such as "expect", "anticipate", "estimate",
"plan", "believe" and words of similar import, regarding the Company's
expectations as to the development and effectiveness of its technologies, the
potential demand for its products, and other aspects of its present and future
business operations, constitute forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Although the Company
believes that its expectations are based on reasonable assumptions within the
bounds of its knowledge of its business and operations, the Company cannot
guarantee that actual results will not differ materially from its expectations.
In evaluating such statements, readers should specifically consider the various
factors contained in the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 2001, which could cause actual results to differ
materially from those indicated by such forward-looking statements, including
those set forth in "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Risk Factors", as well as those set forth below and
elsewhere in this Report.
7
General
Since inception, the Company has incurred substantial operating losses.
The Company expects operating losses to continue and possibly increase in the
near term and for the foreseeable future as it continues its product development
efforts, conducts clinical trials and undertakes marketing and sales activities
for new products. The Company's ability to achieve profitability is dependent
upon its ability successfully to integrate new technology into its thermotherapy
systems, conduct clinical trials, obtain governmental approvals, and
manufacture, market and sell its new products. Major obstacles facing the
Company over the last several years have included inadequate funding, a negative
net worth, and the slow development of the thermotherapy market due to technical
shortcomings of the thermotherapy equipment available commercially. The Company
has not continued to market its older thermotherapy system, principally because
of the system's inability to provide heat treatment for other than surface and
sub-surface tumors, and has concentrated its efforts on a new generation of
thermotherapy products.
The operating results of the Company have fluctuated significantly in
the past on an annual and a quarterly basis. The Company expects that its
operating results will fluctuate significantly from quarter to quarter in the
future and will depend on a number of factors, many of which are outside the
Company's control
Results of Operations
Comparison of Three Months Ended March 31, 2002 and Three Months Ended March 31,
2001
There were no product sales for the three months ended March 31, 2002.
No product revenues are expected until the Company's equipment incorporating new
technologies receives the necessary approvals from governmental regulatory
agencies. The new equipment is currently in pivotal Phase II clinical testing.
General and administrative expense increased by 103%, to $1,998,406 for
the three months ended March 31, 2002, from $982,792 for the comparable period
in 2001. The increase of $1,015,614 was due to several factors. First, the
Company incurred costs associated with settlement of its ongoing lawsuit with
Warren C. Stearns and his associates. Under the terms of the settlement, Celsion
issued to the Stearns group certain common stock purchase warrants that were at
issue in the litigation, together with additional warrants as compensation for
relinquishment of certain anti-dilution rights under the disputed warrants and
up to $265,000 in cash to reimburse Stearns for costs incurred up to the
settlement date. Second, during this quarter, the Company accrued the remaining
amounts due to Spencer J. Volk, its former President and Chief Executive
Officer, under the terms of the agreement governing his retirement. Finally, the
Company incurred consulting costs related to the exploration of the feasibility
of setting up a business in China (including Hong Kong, Taiwan and Macao). These
increased costs were partially offset by the allocation of general expenses
(including rent, utilities, office services, etc.) between administration and
research and development.
Research and development expense increased by 163%, or $1,089,955, to
$1,759,775 for the current period from $669,820 for the three months ended March
31, 2001. This increase was due to the allocation of general expenses discussed
above, the cost of benign prostatic hyperplasia ("BPH") clinical trials,
establishment of a clinical monitoring team and engineering costs related to
commercializing the design of the BPH device. The Company expects expenditures
8
on research and development to increase for the remainder of the current fiscal
year as it completes its BPH Phase II clinical trials, submits the data to the
Food and Drug Administration (the "FDA") in connection with its application for
pre-marketing approval and undertakes the approval process. Additionally the
Company intends to accelerate its Phase II breast cancer clinical trials and has
submitted to the FDA Investigational New Drug applications, and potentially to
initiate Phase I clinical trials, for several indications for its
Doxorubicin-laden heat activated liposomes.
The increased expenditures, discussed above, resulted in an increase in
the loss from operations for the three-month period ended March 31, 2002 of
$2,107,427, to ($3,758,181) from ($1,650,754) in the comparable period during
the prior fiscal year.
Comparison of Six Months Ended March 31, 2002 and Six Months Ended March 31,
20001
There were no product sales for the six months ended March 31, 2002. No
product revenues are expected until the Company's equipment incorporating new
technologies receives the necessary approvals from governmental regulatory
agencies. The new equipment is currently in pivotal Phase II clinical testing.
General and administrative expense increased by 33%, to $2,539,653, for
the six months ended March 31, 2002, from $1,913,951 for the comparable period
in 2001. The increase of $625,702 was due to several factors. First, the Company
incurred costs associated with settlement of its ongoing lawsuit with Warren C.
Stearns and his associates. Under the terms of the settlement, Celsion issued to
the Stearns group certain common stock purchase warrants that were at issue in
the litigation, together with additional warrants as compensation for
relinquishment of certain anti-dilution rights under the disputed warrants and
up to $265,000 in cash to reimburse Stearns for costs incurred up to the
settlement date. Second, the Company accrued the remaining amounts due to
Spencer J. Volk, its former President and Chief Executive Officer, under the
terms of the agreement governing his retirement. Finally, the Company incurred
consulting costs related to the exploration of the feasibility of setting up a
business in China (including Hong Kong, Taiwan and Macao). These increased costs
were partially offset by the allocation of general expenses (including rent,
utilities, office services, etc.) between administration and research and
development.
Research and development expense increased by 131%, to $2,882,996 for
the current period from $1,248,321 for the six months ended March 31, 2001. This
increasewas due to the allocation of general expenses discussed above, the cost
of BPH clinical trials, establishment of a clinical monitoring team and
engineering costs related to commercializing the design of the BPH device. The
Company expects expenditures on research and development to increase for the
remainder of the current fiscal year as it completes its BPH Phase II clinical
trials, submits the data to the FDA in connection with its application for
pre-marketing approval and undertakes the approval process. Additionally the
Company intends to accelerate its Phase II breast cancer clinical trials and has
submitted to the FDA Investigational New Drug applications, and potentially
initiate Phase I clinical trials, for several indications for its
doxorubicin-laden heat activated liposomes.
9
The increased expenditures, discussed above, resulted in an increase in
the loss from operations for the six-month period ended March 31, 2002 of
$2,262,235, to ($5,422,649) from ($3,160,414) in the comparable period during
the prior fiscal year.
Liquidity and Capital Resources
Since inception, the Company's expenses have significantly exceeded its
revenues, resulting in an accumulated deficit of $39,045,087 at March 31, 2002.
The Company has incurred negative cash flows from operations since its
inception, and has funded its operations primarily through the sale of equity
securities. As of March 31, 2002, the Company had total current assets of
$3,630,402, including cash and cash equivalents of $3,530,095, current
liabilities of $675,381 and a working capital surplus of $2,955,021. As of
September 30, 2001, the Company had total current assets of $2,661,341,
including cash and cash equivalents of $2,510,136, current liabilities of
$272,441, and a working capital surplus of $2,388,900. Net cash used in the
Company's operating activities was $4,537,627 for the six months ending March
31, 2002.
The Company does not have any bank financing arrangements and has
funded its operations in recent years primarily through private placement
offerings. For all of fiscal year 2002, the Company expects to expend a total of
about $7.5 million for research, development and administration. This aggregate
expenditure amount is an estimate based upon assumptions as to the scheduling
and cost of institutional clinical research and testing personnel, the timing of
clinical trials and other factors, not all of which are fully predictable or
within the control of the Company. Accordingly, estimates and timing concerning
projected expenditures and programs are subject to change from time to time and
such changes may be material.
The Company expects to meet its funding needs for the remainder of
fiscal year 2002 from its current resources, including funds generated from a
private placement of equity completed on January 9, 2002.
The Company's dependence on raising additional capital will continue at
least until such time, if any, as the Company is able to begin marketing its new
technologies. The Company's future capital requirements and the adequacy of its
financing depend upon numerous factors, including the successful
commercialization of its thermotherapy systems, progress in its product
development efforts, progress with pre-clinical studies and clinical trials, the
cost and timing of production arrangements, the development of effective sales
and marketing activities, the cost of filing, prosecuting, defending and
enforcing intellectual property rights, competing technological and market
developments, and the development of strategic alliances for the marketing of
its products. The Company will be required to obtain such funding through equity
or debt financing, strategic alliances with corporate partners and others, or
through other sources not yet identified. The Company does not have any
committed sources of additional financing and cannot guarantee that additional
funding will be available in a timely manner, or on acceptable terms, if at all.
If adequate funds are not available in a timely manner and on acceptable terms,
the Company may be required to delay, scale back or eliminate certain aspects of
its operations or attempt to obtain funds through arrangements with
collaborative partners or others that may require the Company to relinquish
rights to certain of its technologies, product candidates, products or potential
markets.
10
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Not applicable.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The following information was reported by the Company under Item 5 in a
Current Report on Form 8-K dated January 25, 2002 filed with the Securities and
Exchange Commission (the "SEC") on January 29, 2002:
As previously reported, on April 27, 2000, the
Company commenced an action (the "Original Suit") in the
United States District Court for the District of Maryland (the
"Maryland Court") against Warren C. Stearns, a former director
of the Company ("W.C. Stearns"), Mr. Stearns' management
company and a number of his affiliates, family members and
colleagues (collectively, the "Original Defendants"), who held
warrants (the "Original Warrants") for the purchase of
approximately 4.1 million shares of the Company's Common Stock
at $0.41 per share. On January 18, 2001, the Maryland Court
transferred the case to the United States District Court for
the Northern District of Illinois, in Chicago (the "Chicago
Court"). On July 17, 2001, the Company filed a motion to amend
its complaint to add a second count, alleging that Mr.
Stearns, on behalf of himself and the other Original
Defendants, had executed a Mutual Release which released any
right the Original Defendants had to exercise the warrants
("Count II"). The motion was granted on July 19, 2001.
On August 9, 2001, the Original Defendants filed a
counterclaim (the "Counterclaim") against the Company, certain
of its officers and directors, and an attorney and law firm
that previously had represented the Company. On September 10,
2001, the Chicago Court dismissed, with prejudice, Count I of
the Complaint. On November 23, 2001, the Company and certain
of its officers and directors filed a motion to dismiss the
Counterclaim.
On January 25, 2002, the Company and Augustine Y.
Cheung, Spencer J. Volk, Walter B. Herbst, LaSalle D. Leffall,
Claude Tihon, John Mon, Max E. Link (all of whom are present
or former officers and/or directors of the Company), George
Bresler, Bresler, Goodman & Unterman LLP and The George
Bresler Trust on the one hand (collectively, the "Company
Parties"), and Stearns Management Company, Anthony Riker,
Ltd., John T. Horton, The George T. Horton Trust, Warren R.
Stearns, Charles A. Stearns, and W.C. Stearns (collectively,
the "Stearns Parties"), on the other hand, entered into a
settlement agreement (the "Settlement Agreement"). Pursuant to
the Settlement Agreement, the Company, among other things, has
agreed (a) to pay to W.C. Stearns the lesser of (i) the
Stearns Parties' actual legal fees, costs and expenses
incurred in connection with the Original Suit, the
Counterclaim and the Settlement Agreement or (ii) $265,000;
(b) to issue to the Stearns Parties warrants (the "Settlement
Warrants") to purchase a total of 6,325,821 shares of the
Company's Common Stock, at an exercise price of $0.01 per
share; and (c) to register for resale the shares underlying
the Settlement Warrants. The Settlement Warrants are in
replacement of the Original Warrants, the validity of which
was at issue in the Original Suit. However, while the Original
Warrants, among other things, contained antidilution
provisions ensuring the Stearns Parties the right to purchase
4.6875% of the Company's Common Stock, on a fully diluted
basis, until completion of the Company's next public offering
(as defined) and a renewal right at the election of the
11
holder, the Settlement Warrants contain no such provisions. In
addition, pursuant to the Settlement Agreement, the Company
Parties, on the one hand, and the Stearns Parties, on the
other, unconditionally released one another from any and all
claims arising prior to the effective date of the Settlement
Agreement and agreed to dismiss, with prejudice, the Original
Suit, including the Counterclaim.
The Settlement Agreement has the effect of fully and
finally resolving the matters in dispute in the Original Suit
and the Counterclaim between the Company Parties, on the one
hand, and the Stearns Parties, on the other hand.
Item 2. Change in Securities.
During the fiscal quarter ended March 31, 2002, the Company issued the
following securities without registration under the Securities Act of 1933, as
amended (the "Securities Act"):
The Company issued a total of 4,228,348 shares of its
Common Stock and warrants to purchase an equal number of
shares of its Common Stock in connection with a private
placement offering made exclusively to "accredited investors"
as that term is defined in Rule 501 under the Securities Act.
The Common Stock and warrants were issued in units, consisting
of one share of Common Stock, and one warrant, exercisable at
$0.60 per share and subject to call under certain
circumstances, to purchase one share of Common Stock. The
units were sold at a price of $0.50 per Unit. As of March 31,
2002, the Company had realized gross proceeds in the amount of
$2,114,174 and paid placement agent commissions and expenses
in the amount of $241,111 in connection with the sale of these
securities in the quarter ended March 31, 2002. The shares
issued are restricted stock, endorsed with the Company's
standard restricted stock legend, with a stop transfer
instruction recorded by the transfer agent. The certificates
representing the warrants have a similar restrictive legend.
Accordingly, the Company views the shares issued as exempt
from registration under Sections 4(2) and/or 4(6) of the
Securities Act.
During the quarter, the Company also issued 213,000
shares to four outside consultants for services valued at
$115,900. These shares are restricted stock, endorsed with the
Company's standard restricted stock legend, with a stop
transfer instruction recorded by the transfer agent.
Accordingly, the Company views the shares issued as exempt
from registration under Sections 4(2) and/or 4(6) of the
Securities Act.
12
At various times during the quarter, the Company
issued a total of 16,250 shares of its Common Stock for a cash
consideration of $8,475 upon exercise of stock purchase
options.
The Company also issued stock purchase options to two
outside consultants to purchase a total of 150,000 shares of
Common Stock. These options were valued at $68,978. The
documents evidencing these securities carry the Company's
standard restrictive legend. Accordingly, the Company views
the shares issued as exempt from registration under Sections
4(2) and/or 4(6) of the Securities Act.
Item 3. Defaults upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders.
On February 15, 2002, the Company held its Annual Meeting of
Stockholders (the "Annual Meeting"). At the Annual Meeting, the stockholders
voted to elect the following directors to the Board of Directors, to serve as
Class I directors for terms of three years each, until the Company's annual
meeting of stockholders in 2005 and until their respective successors are
elected and shall have qualified:
Name Results of Stockholder Vote
- ---------------------------- --------------------------------------------------
John Mon.................... Votes For:........................67,912,751
Votes Withheld:......................298,562
Claude Tihon................ Votes or:.........................68,055,551
Votes Withheld:......................155,762
In addition, at the Annual Meeting, stockholders voted to ratify the
appointment of Stegman & Company as the Company's Independent Public Accountants
for the fiscal year ending September 30, 2002. The results of the voting on this
matter are as follows:
Votes For:............................................ 68,034,205
Votes Against......................................... 108,192
Abstentions and Broker Non-Votes...................... 68,916
Item 5. Other Information.
Not applicable.
13
Item 6. Exhibits and Reports on Form 8-K .
(a) Exhibits.
11. Computation of Per Share Earnings.
(b) Reports on Form 8-K.
On January 11, 2002, the Company filed with the SEC a Current Report
on Form 8-K reporting, under Item 5, that on January 9, 2002 it completed its
private placement (the "Offering") of units ("Units") consisting of one share of
common stock, par value $0.01 per share and a warrant to purchase one share of
Celsion common stock, at a price of $0.50 per Unit. The Current Report included
a press release reporting on completion of the Offering.
On January 29, 2002, the Company filed with the SEC a Current Report on
Form 8-K reporting, under Item 5, that on January 25, 2002, the Company and
Augustine Y. Cheung, Spencer J. Volk, Walter B. Herbst, LaSalle D. Leffall,
Claude Tihon, John Mon, Max E. Link (all of whom are present or former officers
and/or directors of the Company), George Bresler, Bresler, Goodman & Unterman
LLP and The George Bresler Trust on the one hand (collectively, the "Company
Parties"), and Stearns Management Company, Anthony Riker, Ltd., John T. Horton,
The George T. Horton Trust, Warren R. Stearns, Charles A. Stearns, and W.C.
Stearns on the other hand (the "Stearns Parties"), entered into a settlement
agreement the effect of which was t fully and finally to resolve the matters in
dispute in the certain ongoing litigation between the Company Parties, on the
one hand, and the Stearns Parties, on the other hand.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: May 14, 2002
CELSION CORPORATION
-------------------
(Registrant)
By: /s/ Augustine Y. Cheung
-----------------------
Augustine Y. Cheung
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/Anthony P. Deasey
--------------------
Anthony P. Deasey
Executive Vice President-Finance and
Administration and Chief Financial
Officer
(Principal Financial and Accounting
Officer)
15
EXHIBIT 11
CELSION CORPORATION
COMPUTATION OF EARNINGS PER SHARE
----------------------------------------------------- ------------------------------------------------
Six Months Ended March 31,
----------------------------------------------------- ------------------------- ----------------------
2002 2001
Net (loss) income $(5,394,665) $(2,953,008)
----------------------------------------------------- ------------------------- ----------------------
Net (loss) income per common share* $ (0.06) $ (0.04)
----------------------------------------------------- ------------------------- ----------------------
Weighted average shares outstanding 84,008,495 67,775,376
----------------------------------------------------- ------------------------- ----------------------
* Common stock equivalents have been excluded from the calculation of net loss
per share as their inclusion would be anti-dilutive.
16