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 June 30, 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
--------------
N/A
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Former Name, Former Address and Former Fiscal Year
if Changed Since Last Report.
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 August 12, 2002, the Registrant had outstanding 90,699,556 shares of
Common Stock, $.01 par value.
1
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
Index to Financial Statements
Page
Balance Sheets as of June 30, 2002 and September 30, 2001 3
Statements of Operations for the Three and Nine Month Periods Ended June 5
30, 2002 and 2001
Statements of Cash Flows for the Nine Month Periods Ended June 30, 2002 6
and 2001
Notes to Financial Statements 7
2
CELSION CORPORATION
BALANCE SHEETS
June 30, 2002 and September 30, 2001
ASSETS
June 30, 2002 September 30,
(Unaudited) 2001
--------- ---------
Current assets:
Cash and cash equivalents $3,119,941 $2,510,136
Accounts receivable - trade 36 1,205
Inventories 123,195 --
Prepaid expenses 45,012 --
--------- ---------
Total current assets 3,288,184 2,511,341
--------- ---------
Property and equipment - at cost:
Furniture and office equipment 253,774 229,643
Leasehold improvements 12,276 --
Laboratory and shop equipment 89,354 87,193
--------- ---------
355,404 316,836
Less accumulated depreciation 172,475 127,556
--------- ---------
Net value of property and equipment 182,929 189,280
--------- ---------
Other assets:
Deposits 445,053 179,537
Patent licenses (net of amortization) 64,831 76,703
--------- ---------
Total other asset 509,884 256,240
--------- ---------
Total assets $3,980,997 $2,956,861
========== ==========
See accompanying notes.
3
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, 2002 September 30,
(Unaudited) 2001
----------- -----------
Current liabilities:
Accounts payable - trade $ 520,852 $ 145,520
Accrued payroll 56,843 --
Other accrued liabilities 140,759 126,921
----------- -----------
Total current liabilities 718,454 272,441
----------- -----------
Long-term Liabilities:
Security deposit -- 15,203
----------- -----------
Total liabilities 718,454 287,644
----------- -----------
Stockholders' equity:
Capital stock -- $.01 par value; 150,000,000 shares authorized, 90,484,847 and
76,876,761 shares issued and outstanding at June 30, 2002
and September 30, 2001, respectively 904,848 768,768
Series A 10% Convertible Preferred Stock -- $1,000 par value; 7,000 shares
authorized, 1,108 and 1,099 shares issued and outstanding at June
30, 2002 and September 30, 2001, respectively 1,108,190 1,099,584
Series B 8% Convertible Preferred Stock -- $1,000 par value; 5,000 shares
authorized, 2,013 and 0 shares issued and outstanding at June 30, 2002
and September 30, 2001, respectively 1,761,330 --
Additional paid-in capital 41,191,768 34,406,022
Accumulated deficit (41,703,593) (33,605,157)
----------- -----------
Total stockholders' equity 3,262,543 2,669,217
----------- -----------
Total liabilities and stockholders' equity $ 3,980,997 $ 2,956,861
============ ============
See accompanying notes.
4
CELSION CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Nine Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
------------ ------------ ------------ ------------
Revenue:
Hyperthermia sales and parts $ -- $ 1,462 $ -- $ 3,320
---------- ---------- ---------- ----------
Total revenue -- 1,462 -- 3,320
Cost of sales -- -- -- --
------------ ------------ ------------ ------------
Gross profit -- 1,462 -- 3,320
------------ ------------ ------------ ------------
Operating expenses:
General and administrative 987,306 1,127,585 3,526,959 3,041,535
------------ ------------ ------------ ------------
Research and development 1,646,710 552,934 4,529,706 1,801,255
------------ ------------ ------------ ------------
Total operating expenses 2,634,016 1,680,519 8,056,665 4,842,790
------------ ------------ ------------ ------------
Loss from operations (2,634,016) (1,679,057) (8,056,665) (4,839,470)
Loss on disposal of property
and equipment -- -- (1,825) --
------------ ------------ ------------ ------------
Interest income 11,154 62,438 40,962 269,844
------------ ------------ ------------ ------------
Loss before income taxes (2,622,862) (1,616,619) (8,017,528) (4,569,626)
Income taxes -- -- -- --
------------ ------------ ------------ ------------
Net loss (2,622,862) (1,616,619) (8,017,528) (4,569,626)
------------ ------------ ------------ ------------
Beneficial conversion feature of
Class B Convertible Preferred Stock 252,000 -- 252,000 --
------------ ------------ ------------ ------------
Net loss attributable to common
Stockholders $ (2,874,862) $ (1,616,619) $ (8,269,528) $ (4,569,626)
============ ============ ============ ============
Net loss per common share (basic) $ (0.03) $ (0.02) $ (0.10) $ (0.06)
============ ============ ============ ============
Weighted average shares outstanding 90,033,347 76,515,562 85,909,745 70,447,996
============ ============ ============ ============
See accompanying notes.
5
CELSION CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended June 30,
2002 2001
----------- -----------
Cash flows from operating activities:
Net loss $(8,017,528) $(4,569,626)
Noncash items included in net loss:
Depreciation and amortization 60,296 48,117
Common stock and stock options issued
for operating expenses 519,122 372,634
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 1,169 7,041
Inventories (123,195) (12,656)
Prepaid expenses (45,012) (36,403)
Other assets (265,516) (207,432)
Accounts payable - trade 375,332 64,333
Accrued interest payable -- (155,373)
Accrued payroll 56,843 --
Other liabilities (1,365) (10,768)
----------- -----------
Net cash used by operating activities (6,961,305) (4,283,717)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (43,898) (114,395)
----------- -----------
Net cash used by investing activities (43,898) (114,395)
----------- -----------
Cash flows from financing activities:
Payment on notes payable (net) -- (3,187)
Proceeds of stock issuances 7,615,008 211,250
----------- -----------
Net cash provided by financing activities 7,615,008 208,063
----------- -----------
Net increase (decrease) in cash 609,805 (4,190,049)
Cash at beginning of period 2,510,136 8,820,196
----------- -----------
Cash at end of the period $ 3,119,941 $ 4,630,147
=========== ===========
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 from 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 nine
months ended June 30, 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 nine-month periods ended June 30, 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.
Note 3. Option Repricing
On March 29, 2002, in order to provide meaningful continuing
stock-based incentives for members of management, and in recognition of the
decline in the market price of the Company's Common Stock, the Compensation
Committee of the Board of Directors approved the cancellation of options to
purchase a total of 3,625,000 shares of Common Stock held by certain key
executives and the issuance of new options to purchase a total of 3,150,000
shares, resulting in a net decrease of options to purchase a total of 475,000
shares. The cancelled options had been issued to the Company's executives
pursuant to their respective employment contracts at exercise prices in excess
of the current market price of the Company's Common Stock. These options
consisted of certain options vested at the time of cancellation, as well as
options with vesting dates through April 2003, and with expiration dates through
April 2011. The new options consist of currently vested compensatory options,
bonus options, one-third of which are currently vested and the remainder of
which vest on March 31, 2003 and 2004, and performance-based awards that vest,
if at all, upon achievement, by the Company, of certain specified milestones,
all of which expire in May 2012. All of the new options were issued pursuant to
the Company's 2001 Stock Option Plan, at exercise prices at or in excess of the
7
CELSION CORPORATION
NOTES TO FINANCIAL STATEMENTS
market price for the Common Stock on the date of grant. The Company will account
for the repriced options using variable accounting under FASB Interpretation No.
44, Accounting for Certain Transactions Involving Stock Compensation--An
Interpretation of APB Opinion No. 25. Consequently, during each reporting period
the Company will record compensation expense relating to the vested portion of
the repriced options to the extent that the fair market value of the Company's
Common Stock exceeds the exercise price of such options. During the quarter
ended June 30, 2002, the Company did not record any compensation expense.
The following table sets forth the option cancellations and awards for
five of the Company's executive officers:
Cancelled Options Newly Granted Options
----------------------------------- ------------------------------------
Number of Exercise Number of Exercise
Shares Price Shares Price
----------------- -------------- ---------------- -----------------
Augustine Y. Cheung, 150,000 $0.80 800,000 $0.64(1)
President, Chief 150,000 $1.00 50,000 $0.76(2)
Executive Officer, and 150,000 $1.20
Chief Scientific Officer 300,000 $1.22
150,000 $1.40
100,000 $1.60
Anthony P. Deasey, 580,000 $1.44 665,000 $0.64(1)
Executive Vice 80,000 $1.58 135,000 $0.76(2)
President--Finance & 80,000 $1.73
Administration, Chief 80,000 $1.87
Financial 80,000 $2.01
Officer
John Mon, Vice 150,000 $0.92 185,000 $0.64(1)
President--New Business 100,000 $2.75 65,000 $0.76(2)
Development 50,000 $2.95 150,000 $0.92(3)
50,000 $3.15
50,000 $3.35
50,000 $3.55
Daniel S. Reale, Senior 500,000 $1.03 665,000 $0.64(1)
Vice President and 80,000 $1.12 135,000 $0.76(2)
President-BPH Division 80,000 $1.23
80,000 $1.32
80,000 $1.43
80,000 $1.52
Dennis Smith, Vice 125,000 $0.92 140,000 $0.64(1)
President--Engineering 50,000 $2.80 35,000 $0.76(2)
100,000 $2.82 125,000 $0.92(3)
50,000 $3.00
50,000 $3.20
(1) One-third currently vested, one-third vest on March 31, 2003 and
one-third vest on March 31, 2004. Expire in May 2012.
(2) Milestone options. Expire in May 2012.
(3) Currently vested. Expire in May 2012.
8
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, including, without limitation, 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 items; 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. These and other risks and
uncertainties 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.
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 to successfully 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.
9
Results of Operations
Comparison of Three Months Ended June 30, 2002 and Three Months Ended June 30,
2001
There were no product sales for the three months ended June 30, 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 decreased by 12%, to $987,306 for
the three months ended June 30, 2002, from $1,127,585 for the comparable period
in 2001. The decrease of $140,279 was due to the allocation of general expenses
(including rent, utilities, office services, etc.) between administration and
research and development.
Research and development expense increased by 198%, or $1,093,776, to
$1,646,710 for the current period from $552,934 for the three months ended June
30, 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
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, has
submitted to the FDA an Investigational New Drug application, and potentially
will initiate Phase I clinical trials to treat prostate cancer with its
Doxorubicin-laden, heat-activated liposomes.
The increased expenditures, discussed above, resulted in an increase of
$954,959 in the loss from operations for the three-month period ended June 30,
2002, to ($2,634,016) from ($1,679,057) in the comparable period during the
prior fiscal year.
Comparison of Nine Months Ended June 30, 2002 and Nine Months Ended June 30,
2001
There were no product sales for the nine months ended June 30, 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 expenses increased by 16%, to $3,526,959,
for the nine months ended June 30, 2002, from $3,041,535 for the comparable
period in 2001. The increase of $485,424 was due to several factors. First, the
Company incurred costs associated with settlement of its ongoing lawsuit with
Warren C. Stearns and his associates (the "Stearns Group"). Under the terms of
10
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 Mr. Stearns
for costs incurred up to the settlement date. Second, the Company accrued all
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 exploration of the
feasibility of setting up a business for new products 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, as discussed above.
Research and development expense increased by 151% to $4,529,706 for
the current nine-month period from $1,801,255 for the nine months ended June 30,
2001. This increase was 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, has
submitted to the FDA an Investigational New Drug application, and potentially
will initiate Phase I clinical trials, to treat prostate cancer with its
Doxorubicin-laden, heat-activated liposomes.
The increased expenditures, discussed above, resulted in an increase of
$3,217,195 in the loss from operations for the nine-month period ended June 30,
2002, to ($8,056,665) from ($4,839,470) 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 $41,703,593 at June 30, 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 June 30, 2002, the Company had total current assets of
$3,288,184, including cash and cash equivalents of $3,119,941, current
liabilities of $718,454 and a working capital surplus of $2,569,730. As of
September 30, 2001, the Company had total current assets of $2,511,341,
including cash and cash equivalents of $2,510,136, current liabilities of
$272,441, and a working capital surplus of $2,238,900. Net cash used in the
Company's operating activities was $6,961,305 for the nine months ending June
30, 2002.
The Company does not have any bank financing arrangements and has
funded its operations in recent years primarily through private placement
offerings. On June 3, 2002, the Company completed a private placement of 2,000
units at a price per unit of $1,000, resulting in gross proceeds to the Company
of $2,000,000. Each unit in this offering consists of one share of the Company's
8% Series B Convertible Preferred Stock and a warrant to purchase 600 shares of
Common Stock. On January 9, 2002, the Company completed a private placement of
units consisting of one share of Common Stock, and a warrant to purchase one
share of Common Stock, at a price of $0.50 per unit. The Company realized gross
proceeds in the amount of $6,250,000 from this offering.
11
For all of fiscal year 2002, the Company expects to expend a total of
about $9.5 million for research, development and administration, of which $7.1
million had been expended as of June 30, 2002. The aggregate expenditure amount
is an estimate based upon certain 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 two
private placements of equity securities completed earlier during the fiscal
year.
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 or otherwise may be on terms disadvantageous to the Company.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Not applicable.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities.
During the fiscal quarter ended June 30, 2002, the
Company issued the following securities without registration
under the Securities Act of 1933, as amended (the "Securities
Act"):
12
On June 3, 2002, the Company completed a private
placement (the "Offering") of 2,000 units ("Units") to
"accredited investors" (as that term is defined for purposes
of Regulation D under the Securities Act) at a price per Unit
of $1,000. The Units consist of one share of the Company's 8%
Series B Convertible Preferred Stock, par value $0.01 ("Series
B Preferred Stock"), and a warrant to acquire 600 shares of
Celsion Common Stock exercisable at a price of $0.65 per
share. Each share of Series B Preferred Stock may be converted
into 2,000 shares of Celsion Common Stock commencing 90 days
after the closing of the Offering. The Company received gross
proceeds of $2,000,000 in connection with the Offering. The
shares issued are restricted stock, endorsed with the
Company's standard restricted stock legend. 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 280,000
shares of its Common Stock to four outside consultants for
services valued at $140,000. 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.
At various times during the quarter, the Company
issued a total of 455,000 shares of its Common Stock for cash
consideration of $27,000 upon exercise of stock purchase
options and warrants. These shares are restricted stock,
endorsed with the Company's standard restrictive 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.
The Company also issued stock purchase options to
three outside consultants to purchase a total of 460,000
shares of Common Stock. These options were valued at $112,293.
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.
None.
Item 5. Other Information.
Not applicable.
13
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
11. Computation of Per Share Earnings.
99.1 Certification of Chief Executive Officer Pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Chief Financial Officer Pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K.
On April 3, 2002, the Company filed with the Securities and Exchange
Commission (the "SEC") a Current Report on Form 8-K reporting, under Item 5,
that on March 28, 2002, the Company issued a press release (included as an
exhibit to the Current Report) reporting, among other things, results from the
multi-site Phase II pivotal trial of its Microfocus 800 Microwave
Urethroplasty(TM) system used for the treatment of Benign Prostatic Hyperplasia,
is a non-cancerous urological disease that affects many older men.
On April 10, 2002, the Company filed with the SEC a Current Report
on Form 8-K reporting, under Item 5, that on April 8, 2002, the Company issued a
press release (included as an exhibit to the Current Report) reporting, among
other things, on the filing of an Investigational New Drug Application with the
Food and Drug Administration for its temperature-sensitive liposome compound in
the treatment of prostate cancer.
On June 3, 2002, the Company filed with the SEC a Current Report on
Form 8-K reporting, under Item 5, that on June 3, 2002 it completed a private
placement (the "Offering") of 2,000 units ("Units") at a price per Unit of
$1,000. The Units consist of one share of the Company's 8% Series B Convertible
Preferred Stock, par value $0.01, and a warrant to acquire 600 shares of Celsion
Common Stock exercisable at a price of $0.65 per share. Each share of Series B
Preferred Stock may be converted into 2,000 shares of Celsion Common Stock
commencing 90 days after the closing of the Offering. The Current Report
includes as an exhibit a press release reporting on completion of the Offering.
On June 12, 2002, the Company filed with the SEC a Current Report on
Form 8-K reporting, under Item 5, that On June 11, 2002, the Company released to
its stockholders a letter (included as an Exhibit to the Current Report)
regarding the status of its business and the development of its products.
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: August 12, 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
------------------------------------------------------------- ----------------------------------------
Nine Months Ended June 30,
------------------------------------------------------------- ------------------- --------------------
2002 2001
------------------------------------------------------------- ------------------- --------------------
Net loss attributable to common stockholders $(8,269,528) $(4,569,626)
------------------------------------------------------------- ------------------- --------------------
Net (loss) income per common share* $ (0.10) $ (0.06)
------------------------------------------------------------- ------------------- --------------------
Weighted average shares outstanding 85,909,745 70,447,996
------------------------------------------------------------- ------------------- --------------------
* Common stock equivalents have been excluded from the calculation of net loss
per share as their inclusion would be anti-dilutive.
EXHIBIT 99.1
CELSION CORPORATION
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Quarterly Report of Form 10-Q for the Quarter
Ended June 30, 2002 (the "Report") of Celsion Corporation, a Delaware
corporation (the "Company"), as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Augustine Y. Cheung, the Chief
Executive Officer of the Company, certify, pursuant to and for purposes of 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and results
of operations of the Company.
By: /s/ Augustine Y. Cheung
-------------------------------------------
Augustine Y. Cheung
President and Chief Executive Officer
August 12, 2002
EXHIBIT 99.2
CELSION CORPORATION
Certification of Chief FINANCIAL Officer
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Quarterly Report of Form 10-Q for the Quarter
Ended June 30, 2002 (the "Report") of Celsion Corporation, a Delaware
corporation (the "Company"), as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Anthony P. Deasey, the Chief
Financial Officer of the Company, certify, pursuant to and for purposes of 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and results
of operations of the Company.
By: /s/ Anthony P. Deasey
--------------------------------------
Anthony P. Deasey
Executive Vice President-Finance and
Administration and Chief Financial
Officer
August 12, 2002