Filed
Pursuant to Rule 424(b)(5)
Registration
Statement No. 333-227236
PROSPECTUS
SUPPLEMENT
(To
Prospectus dated October 12, 2018)
$15,000,000
plus
164,835 Commitment Shares
Common
Stock
Pursuant
to this prospectus supplement and the accompanying prospectus, we are offering up to $15.0 million aggregate amount plus 164,835
shares of our common stock, par value $0.01 per share (“Common Stock”), to Aspire Capital Fund, LLC under a Common
Stock Purchase Agreement entered into on August 31, 2018 (“Purchase Agreement”).
The
shares offered include (i) 164,835 shares of Common Stock issued to Aspire Capital Fund, LLC in consideration for entering into
the Common Stock Purchase Agreement (the “Commitment Shares”) and (ii) additional shares of Common Stock in an aggregate
offering price of up to $15.0 million which may be sold from time to time to Aspire Capital Fund, LLC over the 24-month term of
the Purchase Agreement (the “Purchase Shares”). The purchase price for the Purchase Shares will be based upon one
of two formulas set forth in the Purchase Agreement as described herein on page S-21 depending on the type of purchase notice
we submit to Aspire Capital from time to time.
Our
Common Stock is listed on The NASDAQ Capital Market under the symbol “CLSN”. On October 10, 2018, the last reported
sale price of our Common Stock on The NASDAQ Capital Market was $2.68 per share.
On
March 27, 2018, the date we filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, our Prospectus became
subject to the offering limits in General Instruction I.B.6 of Form S-3. At that time, based on the highest closing sale price
of our common stock on The NASDAQ Global Market within the prior 60 days and the number of shares of our outstanding common stock
held by non-affiliates, we were eligible under General Instruction I.B.6 to offer and sell up to at least $17,379,325 of shares
of our common stock pursuant to this Prospectus Supplement.
Investing
in our securities involves a high degree of risk. Before making an investment decision, please read “Risk Factors”
beginning on page S-12 of this prospectus supplement, page 9 of the accompanying prospectus and in the documents incorporated
by reference into this prospectus supplement and the accompanying prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The
date of this prospectus supplement is October 12, 2018.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus are part of a “shelf” registration statement on Form S-3 (File
No. 333-227236) that we filed with the Securities and Exchange Commission (“SEC”) on September 7, 2018 and September
28, 2018 and that was declared effective on October 12, 2018.
This
document is in two parts. The first part is this prospectus supplement, which describes the terms of this offering and also adds
to and updates information contained in the accompanying prospectus and the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus. The second part is the accompanying prospectus, which gives more general information
about the shares of our Common Stock and other securities we may offer from time to time under our shelf registration statement,
some of which does not apply to the securities offered by this prospectus supplement. To the extent there is a conflict between
the information contained in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus
or any document incorporated by reference herein or therein, on the other hand, you should rely on the information in this prospectus
supplement.
You
should read this prospectus supplement, the accompanying prospectus, the documents incorporated by reference in this prospectus
supplement and the accompanying prospectus and any free writing prospectus that we have authorized for use in connection with
this offering before making an investment decision. You should also read and consider the information in the documents referred
to in the sections of this prospectus supplement entitled “Where You Can Find More Information” and “Information
Incorporated by Reference.”
You
should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus
and any free writing prospectus that we have authorized for use in connection with this offering. We have not authorized anyone
to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely
on it.
We
are not making an offer to sell the securities covered by this prospectus supplement in any jurisdiction where the offer or sale
is not permitted.
The
information appearing in this prospectus supplement, the accompanying prospectus, the documents incorporated by reference in this
prospectus supplement and the accompanying prospectus and any free writing prospectus that we have authorized for use in connection
with this offering is accurate only as of its respective date, regardless of the time of delivery of the respective document or
of any sale of securities covered by this prospectus supplement. You should not assume that the information contained in or incorporated
by reference in this prospectus supplement or the accompanying prospectus, or in any free writing prospectus that we have authorized
for use in connection with this offering, is accurate as of any date other than the respective dates thereof.
In
this prospectus supplement, the terms “Celsion Corporation,” the “Company,” “we,” “us,”
“our” and similar terms refer to Celsion Corporation, a Delaware corporation, and its wholly-owned subsidiary, CLSN
Laboratories, Inc., also a Delaware corporation, unless the context otherwise requires. The Celsion brand and product names, including
but not limited to Celsion
®
and ThermoDox
®
contained in this prospectus supplement are trademarks,
registered trademarks or service marks of Celsion Corporation or its subsidiary in the United States and certain other countries.
This document may also contain references to trademarks and service marks of other companies that are the property of their respective
owners.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights certain information about us, this offering and selected information contained elsewhere in or incorporated
by reference into this prospectus supplement and the accompanying prospectus. This summary is not complete and does not contain
all of the information that you should consider before deciding whether to invest in the securities covered by this prospectus
supplement. For a more complete understanding of Celsion and this offering, we encourage you to read and consider carefully the
more detailed information in this prospectus supplement and the accompanying prospectus, including the information incorporated
by reference in this prospectus supplement and the accompanying prospectus and the information included in any free writing prospectus
that we have authorized for use in connection with this offering, including the information referred to under the heading “Risk
Factors” in this prospectus supplement beginning on page S-12.
Overview
Celsion
is a fully-integrated development stage oncology drug company focused on advancing a portfolio of innovative cancer treatments,
including directed chemotherapies, DNA-mediated immunotherapy and RNA-based therapies. Our lead product candidate is ThermoDox®,
a proprietary heat-activated liposomal encapsulation of doxorubicin, currently in a Phase III clinical trial for the treatment
of primary liver cancer (the OPTIMA Study), and a Phase II clinical trial for the treatment of recurrent chest wall breast cancer
(the DIGNITY Study). Second in our pipeline is GEN-1, a DNA-mediated immunotherapy for the localized treatment of ovarian and
brain cancers. We have two platform technologies providing the basis for the future development of a range of therapeutics for
difficult-to-treat forms of cancer including: Lysolipid Thermally Sensitive Liposomes, a heat sensitive liposomal based dosage
form that targets disease with known therapeutics in the presence of mild heat and TheraPlas, a novel nucleic acid-based treatment
for local transfection of therapeutic plasmids. With these technologies we are working to develop and commercialize more efficient,
effective and targeted oncology therapies that maximize efficacy while minimizing side-effects common to cancer treatments.
ThermoDox®
ThermoDox®
is being evaluated in a Phase III clinical trial for primary liver cancer, which we call the OPTIMA Study, which was initiated
in 2014 and a Phase II clinical trial for recurrent chest wall breast cancer. ThermoDox® is a liposomal encapsulation of doxorubicin,
an approved and frequently used oncology drug for the treatment of a wide range of cancers. Localized heat at hyperthermia temperatures
(greater than 40° Celsius) releases the encapsulated doxorubicin from the liposome enabling high concentrations of doxorubicin
to be deposited preferentially in and around the targeted tumor.
The
OPTIMA Study.
The OPTIMA Study represents an evaluation of ThermoDox® in combination with a first line therapy, radio
frequency ablation (RFA), for newly diagnosed, intermediate stage HCC patients. HCC incidence globally is approximately 850,000
new cases per year and is the third largest cancer indication globally. Approximately 30% of newly diagnosed patients can be addressed
with RFA alone.
On
February 24, 2014, we announced that the United States Food and Drug Administration (the “FDA”), after its customary
30-day review period, provided clearance for the OPTIMA Study, which is a pivotal, double-blind, placebo-controlled Phase III
trial of ThermoDox®, in combination with standardized RFA, for the treatment of primary liver cancer. The trial design of
the OPTIMA Study is based on the comprehensive analysis of data from an earlier clinical trial called the HEAT Study, which is
described below. The OPTIMA Study is supported by a hypothesis developed from an overall survival analysis of a large subgroup
of patients from the HEAT Study.
We
initiated the OPTIMA Study in 2014. The OPTIMA Study was designed with extensive input from globally recognized hepatocellular
carcinoma (“HCC”) researchers and expert clinicians and after receiving formal written consultation from the FDA.
The OPTIMA Study is expected to enroll up to 550 patients globally at up to 65 sites in the United States, Canada, Europe Union,
China and other countries in the Asia-Pacific region, and will evaluate ThermoDox® in combination with standardized RFA, which
will require a minimum of 45 minutes across all investigators and clinical sites for treating lesions three to seven centimeters,
versus standardized RFA alone. The primary endpoint for this clinical trial is overall survival (“OS”), and the secondary
endpoints are progression free survival and safety. The statistical plan calls for two interim efficacy analyses by an independent
Data Monitoring Committee (DMC).
On
December 16, 2015, we announced that we had received the clinical trial application approval from the China Food and Drug Administration
(the “CFDA”) to conduct the OPTIMA Study in China. This clinical trial application approval will allow Celsion to
enroll patients at up to 20 clinical sites in China. On April 26, 2016, we announced that the first patient in China had been
enrolled in the OPTIMA Study. Results from the OPTIMA Study, if successful, will provide the basis for a global registration filing
and marketing approval.
On
April 9, 2018, the Company announced that the independent Data Monitoring Committee (DMC) for the Company’s OPTIMA Study
completed its last regularly scheduled review of the patients enrolled in the trial and has unanimously recommended that the OPTIMA
Study continue according to protocol to its final data readout. The DMC’s recommendation was based on the Committee’s
assessment of safety and data integrity of the first 75% of patients randomized in the trial as of February 5, 2018. The DMC reviewed
study data at regular intervals, with the primary responsibilities of ensuring the safety of all patients enrolled in the study,
the quality of the data collected, and the continued scientific validity of the study design. As part of its review of the first
413 patients, the DMC monitored a quality matrix relating to the total clinical data set, confirming the timely collection of
data, that all data are current as well as other data collection and quality criteria.
Post-hoc
data analysis from the Company’s earlier Phase III HEAT Study suggest that ThermoDox® may substantially improve OS,
when compared to the control group, in patients if their lesions undergo a 45 minute RFA procedure standardized for a lesion greater
than 3 cm in diameter. Data from nine OS sweeps have been conducted since the top line progression free survival (“PFS”)
data from the HEAT Study were announced in January 2013, with each data set demonstrating substantial improvement in clinical
benefit over the control group with statistical significance. On August 15, 2016, the Company announced updated results from its
final retrospective OS analysis of the data from the HEAT Study. These results demonstrated that in a large, well bounded, subgroup
of patients with a single lesion (n=285, 41% of the HEAT Study patients), treatment with a combination of ThermoDox® and optimized
RFA provided an average 54% risk improvement in OS compared to optimized RFA alone. The Hazard Ratio (“HR”) at this
analysis is 0.65 (95% CI 0.45 - 0.94) with a p-value of 0.02. Median OS for the ThermoDox® group has been reached which translates
into a two year survival benefit over the optimized RFA group (projected to be greater than 80 months for the ThermoDox® plus
optimized RFA group compared to less than 60 months projection for the optimized RFA only group).
Additional
findings from this most recent analysis specific to the Chinese patient cohort of 223 patients are summarized below:
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In
the population of 154 patients with a single lesion who received optimized RFA treatment for 45 minutes or more showed a 53%
risk improvement in OS (HR = 0.66) when treated with ThermoDox® plus optimized RFA.
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These
data continue to support and further strengthen ThermoDox®’s potential to significantly improve OS compared to an
RFA control in patients with lesions that undergo optimized RFA treatment for 45 minutes or more. The clinical benefit seen
in the intent-to-treat Chinese patient cohort further confirms the importance of RFA heating time as 72% of patients in this
large patient cohort in China received an optimized RFA treatment.
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While
this information should be viewed with caution since it is based on a retrospective analysis of a subgroup, we also conducted
additional analyses that further strengthen the evidence for the HEAT Study sub-group. We commissioned an independent computational
model at the University of South Carolina Medical School. The results indicate that longer RFA heating times correlate with significant
increases in doxorubicin concentration around the RFA treated tissue. In addition, we conducted a prospective preclinical study
in 22 pigs using two different manufacturers of RFA and human equivalent doses of ThermoDox® that clearly support the relationship
between increased heating duration and doxorubicin concentrations.
On
November 29, 2016, the Company announced the results of an independent analysis conducted by the National Institutes of Health
(the “NIH”) from the HEAT Study which reaffirmed the correlation between increased RFA burn time per tumor volume
and improvements in overall survival. The NIH analysis, which sought to evaluate the correlation between RFA burn time per tumor
volume (min/ml) and clinical outcome, concluded that increased burn time per tumor volume significantly improved overall survival
in patients treated with RFA plus ThermoDox® compared to patients treated with RFA alone. For all patients with single lesions
treated with RFA plus ThermoDox®:
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One-unit
increase in RFA duration per tumor volume improved overall survival by 20% (p=0.017; n=227);
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More
significant differences in subgroup of patients with RFA burn times per tumor volume greater than 2.5 minutes per ml;
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Cox
multiple covariate analysis showed overall survival to be significant (p=0.038; Hazard Ratio = 0.85); and
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Burn
time per tumor volume did not have a significant effect on overall survival in single lesion patients treated with RFA only.
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The
HEAT Study
.
On January 31, 2013, the Company announced that the HEAT Study, ThermoDox® in combination with
RFA, did not meet the primary endpoint, PFS, of a Phase III clinical trial enrolling 701 patients with primary liver cancer. This
determination was made after conferring with the HEAT Study independent DMC, that the HEAT Study did not meet the goal of demonstrating
a clinically meaningful improvement in progression free survival. In the trial, ThermoDox® was well-tolerated with no unexpected
serious adverse events. Following the announcement of the HEAT Study results, we continued to follow patients for OS, the secondary
endpoint of the HEAT Study. We have conducted a comprehensive analysis of the data from the HEAT Study to assess the future strategic
value and development strategy for ThermoDox®.
The
DIGNITY Study.
On December 14, 2015, we announced final data from our ongoing DIGNITY Study, which is an open-label, dose-escalating
Phase II trial of ThermoDox® in patients with recurrent chest wall breast cancer. The DIGNITY Study was designed to establish
a safe therapeutic dose in Phase I, and to demonstrate local control in Phase II, including complete and partial responses, and
stable disease as its primary endpoint. The DIGNITY Study was also designed to evaluate kinetics in ThermoDox® produced from
more than one manufacturing site. Of the 29 patients enrolled and treated, 21 patients were eligible for evaluation of efficacy.
Approximately 62% of evaluable patients experienced a local response, including six complete responses and seven partial responses.
Acquisition
of EGEN Assets
On
June 20, 2014, we completed the acquisition of substantially all of the assets of EGEN, Inc., an Alabama corporation, which has
changed its company name to EGWU, Inc. after the closing of the acquisition (“EGEN”), pursuant to an asset purchase
agreement dated as of June 6, 2014, by and between EGEN and Celsion (the “Asset Purchase Agreement”). We acquired
all of EGEN’s right, title and interest in and to substantially all of the assets of EGEN, including cash and cash equivalents,
patents, trademarks and other intellectual property rights, clinical data, certain contracts, licenses and permits, equipment,
furniture, office equipment, furnishings, supplies and other tangible personal property. In addition, CLSN Laboratories assumed
certain specified liabilities of EGEN, including the liabilities arising out of the acquired contracts and other assets relating
to periods after the closing date. The total purchase price for the asset acquisition is up to $44.4 million, including potential
future earnout payments of up to $30.4 million contingent upon achievement of certain earnout milestones set forth in the Asset
Purchase Agreement. At the closing, we paid approximately $3.0 million in cash after the expense adjustment and issued 193,728
shares of our Common Stock to EGEN. The shares of Common Stock were issued in a private transaction exempt from registration under
the Securities Act, pursuant to Section 4(2) thereof. In addition, the Company held back 47,862 shares of Common Stock issuable
to EGEN pending satisfactory resolution of any post-closing adjustments of expenses and EGEN’s indemnification obligations
under the EGEN Purchase Agreement (Holdback Shares). These shares were issued on June 16, 2017.
After
its review in 2016, management concluded that there was no immediate opportunity to out-license TheraSilence. As a result of this
analysis, the earnout payments were adjusted prior to 2017 and there are as of the date of this prospectus supplement up to $24.4
million that may become payable, in cash, shares of our Common Stock or a combination thereof, at our option, upon achievement
of two major milestone events as follows:
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$12.4
million will become payable upon achieving certain specified development milestones relating to an ovarian cancer study of
GEN-1 (formerly known as EGEN-001) to be conducted by us or our subsidiary; and
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$12.0
million will become payable upon achieving certain specified development milestones relating to a GEN-1 glioblastoma multiforme
brain cancer study to be conducted by us or our subsidiary.
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At
September 30, 2017, after the Company’s annual assessment of the totality of the events that could impair IPR&D, the
Company determined certain IPR&D assets related to the development of its glioblastoma multiforme cancer (GBM) product candidate
may be impaired. To arrive at this determination, the Company assessed the status of studies in GBM conducted by its competitors
and the Company’s strategic commitment of resources to its studies in primary liver cancer and ovarian cancer. The Company
estimated the fair value of the IPR&D related to GBM at September 30, 2017 using the multi-period excess earnings method (MPEEM).
The Company concluded that the GBM asset, valued at $9.4 million, was partially impaired and wrote down the GBM asset to $6.9
million incurring a non-cash charge of $2.5 million in the third quarter of 2017.
Our
obligations to make the earnout payments will terminate on the seventh anniversary of the closing date. In the acquisition, we
purchased GEN-1, a DNA-based immunotherapy for the localized treatment of ovarian and brain cancers, and two platform technologies
for the development of treatments for those suffering with difficult-to-treat forms of cancer, novel nucleic acid-based immunotherapies
and other anti-cancer DNA or RNA therapies, including TheraPlas and TheraSilence.
GEN-1
GEN-1
is a DNA-based immunotherapeutic product for the localized treatment of ovarian and brain cancers by intraperitoneally administering
an Interleukin-12 (“IL-12”) plasmid formulated with our proprietary TheraPlas delivery system. In this DNA-based approach,
the immunotherapy is combined with a standard chemotherapy drug, which can potentially achieve better clinical outcomes than with
chemotherapy alone. We believe that increases in IL-12 concentrations at tumor sites for several days after a single administration
could create a potent immune environment against tumor activity and that a direct killing of the tumor with concomitant use of
cytotoxic chemotherapy could result in a more robust and durable antitumor response than chemotherapy alone. We believe the rationale
for local therapy with GEN-1 are based on the following.
We
believe the rationale for local therapy with GEN-1 is b based on the following:
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Loco-regional
production of the potent cytokine IL-12 avoids toxicities and poor pharmacokinetics associated with systemic delivery of recombinant
IL-12 ;
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Persistent
local delivery of IL-12 lasts up to one week and dosing can be repeated; and
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Ideal
for long-term maintenance therapy.
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GEN-1
OVATION Study.
In February 2015, we announced that the FDA accepted, without objection, the Phase I dose-escalation clinical
trial of GEN-1 in combination with the standard of care in neo-adjuvant ovarian cancer (the “OVATION Study”). On September
30, 2015, we announced enrollment of the first patient in the OVATION Study. The OVATION Study will seek to identify a safe, tolerable
and potentially therapeutically active dose of GEN-1 by recruiting and maximizing an immune response and is designed to enroll
three to six patients per dose level and will evaluate safety and efficacy and attempt to define an optimal dose for a follow-on
Phase I/II study combining GEN-1 with Avastin
®
and Doxil
®
. In addition, the OVATION Study establishes
a unique opportunity to assess how cytokine-based compounds such as GEN-1, directly affect ovarian cancer cells and the tumor
microenvironment in newly diagnosed patients. The study is designed to characterize the nature of the immune response triggered
by GEN-1 at various levels of the patients’ immune system, including:
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Infiltration
of cancer fighting T-cell lymphocytes into primary tumor and tumor microenvironment including peritoneal cavity, which is
the primary site of metastasis of ovarian cancer;
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Changes
in local and systemic levels of immuno-stimulatory and immunosuppressive cytokines associated with tumor suppression and growth,
respectively; and
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Expression
profile of a comprehensive panel of immune related genes in pre-treatment and GEN-1-treated tumor tissue.
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We
initiated the OVATION Study at four clinical sites at the University of Alabama at Birmingham, Oklahoma University Medical Center,
Washington University in St. Louis and the Medical College of Wisconsin. During 2016 and 2017, we announced data from the first
fourteen patients in the OVATION Study who completed treatment.
On
October 3, 2017, we announced final clinical and translational research data from the OVATION Study, a Phase Ib dose escalating
clinical trial combining GEN-1 with the standard of care for the treatment of newly-diagnosed patients with advanced Stage III/IV
ovarian cancer who will undergo neoadjuvant chemotherapy followed by interval debulking surgery.
Key
translational research findings from all evaluable patients are consistent with the earlier reports from partial analysis of the
data and are summarized below:
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The
intraperitoneal treatment of GEN-1 in conjunction with neoadjuvant chemotherapy resulted in dose dependent increases in IL-12
and Interferon-gamma (IFN-g) levels that were predominantly in the peritoneal fluid compartment with little to no changes
observed in the patients’ systemic circulation. These and other post-treatment changes including decreases in VEGF levels
in peritoneal fluid are consistent with an IL-12 based immune mechanism.
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Consistent
with the previous partial reports, the effects observed in the IHC analysis were pronounced decreases in the density of immunosuppressive
T-cell signals (Foxp3, PD-1, PDL-1, IDO-1) and increases in CD8+ cells in the tumor microenvironment.
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The
ratio of CD8+ cells to immunosuppressive cells was increased in approximately 75% of patients suggesting an overall shift
in the tumor microenvironment from immunosuppressive to pro-immune stimulatory following treatment with GEN-1. An increase
in CD8+ to immunosuppressive T-cell populations is a leading indicator and believed to be a good predictor of improved overall
survival.
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Analysis
of peritoneal fluid by cell sorting, not reported before, shows treatment-related decrease in the percentage of immunosuppressive
T-cell (Foxp3+), which is consistent with the reduction of Foxp3+ T-cells in the primary tumor tissue, and a shift in tumor
naïve CD8+ cell population to more efficient tumor killing memory effector CD8+ cells .
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Celsion
also reported positive clinical data from the first fourteen patients who have completed treatment in the OVATION Study. GEN-1
plus standard chemotherapy produced positive clinical results, with no dose limiting toxicities and positive dose dependent efficacy
signals which correlate well with positive surgical outcomes as summarized below:
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Of
the fourteen patients treated in the entire study, two patients demonstrated a complete response, ten patients demonstrated
a partial response and two patients demonstrated stable disease, as measured by RECIST criteria. This translates to a 100%
disease control rate (“DCR”) and an 86% objective response rate (“ORR”). Of the five patients treated
in the highest dose cohort, there was a 100% objective response rate with one complete response and four partial responses.
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Fourteen
patients had successful resections of their tumors, with nine patients (64%) having an R0 resection, which indicates a microscopically
margin-negative resection in which no gross or microscopic tumor remains in the tumor bed. Seven out of eight (87%) patients
in the highest two dose cohorts experienced a R0 surgical resection. All five patients treated at the highest dose cohort
experienced a R0 surgical resection.
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All
patients experienced a clinically significant decrease in their CA-125 protein levels as of their most recent study visit.
CA-125 is used to monitor certain cancers during and after treatment. CA-125 is present in greater concentrations in ovarian
cancer cells than in other cells.
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Of
the 13 patients who received GEN-1 treatment in all four dose escalating cohorts, only five patients’ cancers have progressed
as of March 31, 2018. Median PFS for all 13 patients in the OVATION Study is 21.4 months as of March 15, 2018 and counting.
This compares favorably to the historical median progression-free survival of 12 months for newly diagnosed patients with
Stage III and IV ovarian cancer that undergo neoadjuvant chemotherapy followed by interval debulking surgery:
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GEN-1
OVATION II Study.
The Company held an Advisory Board Meeting on September 27, 2017 with the clinical investigators and
scientific experts including those from Roswell Park Cancer Institute, Vanderbilt University Medical School, and M.D. Anderson
Cancer Center to review and finalize clinical, translational research and safety data from the Phase IB OVATION Study in order
to determine the next steps forward for our GEN-1 immunotherapy program.
On
November 13, 2017, the Company filed its Phase I/II clinical trial protocol with the U.S. Food and Drug Administration for GEN-1
for the localized treatment of ovarian cancer. The protocol is designed with a single dose escalation phase to 100 mg/m²
to identify a safe and tolerable dose of GEN-1 while maximizing an immune response. The 12 patient Phase I portion of the study
will be followed by a continuation at the selected dose in up to 118 patient randomized Phase II study. GEN-1 has demonstrated
positive safety and efficacy data in the recently completed dose escalation Phase IB trial in combination with neoadjuvant chemotherapy.
The
study protocol was unanimously supported by an expert medical advisory board and lead investigators from the Phase IB OVATION
Study and is summarized below:
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Open
label, 1:1 randomized design;
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Enrollment
up to 130 patients with Stage III/IV ovarian cancer patients at ten U.S. centers; and
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Primary
endpoint of improvement in progression-free survival (PFS) comparing GEN-1 with neoadjuvant chemotherapy versus neoadjuvant
chemotherapy alone.
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TheraPlas
Technology Platform.
TheraPlas is a technology platform for the delivery of DNA and messenger RNA (“mRNA”)
therapeutics via synthetic non-viral carriers and is capable of providing cell transfection for double-stranded DNA plasmids and
large therapeutic RNA segments such as mRNA. There are two components of the TheraPlas system, a plasmid DNA or mRNA payload encoding
a therapeutic protein and a delivery system. The delivery system is designed to protect the DNA/RNA from degradation and promote
trafficking into cells and through intracellular compartments. We designed the delivery system of TheraPlas by chemically modifying
the low molecular weight polymer to improve its gene transfer activity without increasing toxicity. We believe TheraPlas is a
viable alternative to current approaches to gene delivery due to several distinguishing characteristics, including enhanced molecular
versatility that allows for complex modifications to improve activity and safety.
Technology
Development and Licensing Agreements.
Our current efforts and resources are applied on the development and commercialization
of cancer drugs including tumor-targeting chemotherapy treatments using focused heat energy in combination with heat-activated
drug delivery systems, immunotherapies and RNA-based therapies.
On
August 8, 2016, we signed a Technology Transfer, Manufacturing and Commercial Supply Agreement (the “GEN-1 Agreement”)
with Zhejiang Hisun Pharmaceutical Co. Ltd. (Hisun) to pursue an expanded partnership for the technology transfer relating to
the clinical and commercial manufacture and supply of GEN-1, Celsion’s proprietary gene mediated, IL-12 immunotherapy, for
the greater China territory, with the option to expand into other countries in the rest of the world after all necessary regulatory
approvals are obtained. The GEN-1 Agreement will help to support supply for both ongoing and planned clinical studies in the United
States, and for potential future studies of GEN-1 in China. GEN-1 is currently being evaluated by Celsion in first line ovarian
cancer patients.
In
June 2012, Celsion and Hisun signed a long-term commercial supply agreement for the production of ThermoDox®. Hisun is one
the largest manufacturers of chemotherapy agents globally, including doxorubicin. In July 2013, the ThermoDox® collaboration
was expanded to focus on next generation liposomal formulation development with the goal of creating safer, more efficacious versions
of marketed cancer chemotherapeutics. During 2015, Hisun successfully completed the manufacture of three registration batches
for ThermoDox® and has obtained regulatory approvals to supply ThermoDox® to participating clinical trial sites in all
of the countries of South East Asia, Europe and North America, as well as to the European Union countries allowing for early access
to ThermoDox®. The future manufacturing of clinical and commercial supplies by Hisun will result in a cost structure allowing
Celsion to profitably access all global markets, including third world countries, and help accelerate the Company’s product
development program in China for ThermoDox® in primary liver cancer and other approved indications.
Business
Strategy and Development Plan
As
a clinical stage biopharmaceutical company, our business and our ability to execute our strategy to achieve our corporate goals
are subject to numerous risks and uncertainties. Material risks and uncertainties relating to our business and our industry are
described in “Risk Factors” in this prospectus supplement.
Since
inception, the Company has incurred substantial operating losses, principally from expenses associated with the Company’s
research and development programs, clinical trials conducted in connection with the Company’s product candidates, and applications
and submissions to the Food and Drug Administration. We have not generated significant revenue and have incurred significant net
losses in each year since our inception. We have incurred approximately $274 million of cumulated net losses. As of June 30, 2018,
we had approximately $26.3 million in cash, investment securities and interest receivable. We have substantial future capital
requirements to continue our research and development activities and advance our product candidates through various development
stages. The Company believes these expenditures are essential for the commercialization of its technologies.
The
Company expects its operating losses to continue for the foreseeable future as it continues its product development efforts, and
when it undertakes marketing and sales activities. The Company’s ability to achieve profitability is dependent upon its
ability to obtain governmental approvals, produce, and market and sell its new product candidates. There can be no assurance that
the Company will be able to commercialize its technology successfully or that profitability will ever be achieved. The operating
results of the Company have fluctuated significantly in the past. We have substantial future capital requirements associated with
our continued research and development activities and to advance our product candidates through various stages of development.
The Company believes these expenditures are essential for the commercialization of its technologies.
The
actual amount of funds the Company will need to operate is subject to many factors, some of which are beyond the Company’s
control. These factors include the following:
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the
progress of research activities;
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the
number and scope of research programs;
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the
progress of preclinical and clinical development activities;
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the
progress of the development efforts of parties with whom the Company has entered into research and development agreements;
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the
costs associated with additional clinical trials of product candidates;
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the
ability to maintain current research and development licensing arrangements and to establish new research and development
and licensing arrangements;
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the
ability to achieve milestones under licensing arrangements;
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the
costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and
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the
costs and timing of regulatory approvals.
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The
Company has based its estimate on assumptions that may prove to be wrong. The Company may need to obtain additional funds sooner
or in greater amounts than it currently anticipates. Potential sources of financing include strategic relationships, public or
private sales of the Company’s shares or debt and other sources. If the Company raises funds by selling additional shares
of Common Stock or other securities convertible into Common Stock, the ownership interest of existing stockholders may be diluted.
With
the $26.3 million in cash, investment securities and interest receivable at June 30, 2018, the Company believes it has sufficient
capital resources to fund its operations into the first half of 2020. The Company will be required to obtain additional funding
in order to continue the development of its current product candidates within the anticipated time periods, if at all, and to
continue to fund operations.
Recent
Developments
On
October 4, 2017, the Company entered into letter agreements (the “Exercise Agreements”) with holders of its Series
AAA and Series BBB Warrants issued in a July 6, 2017 Common Stock Offering (the “Exercising Holders”). The Exercise
Agreements amended the Series AAA Warrants to permit their immediate exercise. Prior to the execution of the Exercise Agreements,
the Series AAA Warrants were not exercisable until January 11, 2018. Pursuant to the Exercise Agreements, the Exercising Holders
and the Company agreed that the Exercising Holders would exercise all of their Existing Warrants with respect to 4,665,000 shares
of Common Stock underlying such Existing Warrants. The Series AAA Warrants and Series BBB Warrants were exercised at a price of
$2.07 per share and $4.75 per share, respectively, which were their respective original exercise prices.
The
Exercise Agreements also provide for the issuance of 1,166,250 Series DDD Warrants, each to purchase one share of Common Stock
(the “Series DDD Warrants”). The Series DDD Warrants are initially exercisable no sooner than twelve months following
issuance, or on October 4, 2018, and terminate six months following when the Series DDD Warrants are initially exercisable, or
on April 4, 2019. The Series DDD Warrants have an exercise price no than less than $6.20 per share.
The
Series DDD Warrants and the shares of Common Stock issuable upon the exercise of the Series DDD Warrants shall not be registered
under the Securities Act of 1933, as amended, and are offered pursuant to the exemption provided in Section 4(a)(2) under the
Securities Act or Rule 506(b) promulgated thereunder. Pursuant to the Exercise Agreements, the Series DDD Warrants are substantially
in the form of the Existing Warrants, and the Company will be required to register for resale the shares of Common Stock underlying
the Series DDD Warrants.
In
early October 2017, certain holders of the other 205,000 Series BBB Warrants and 108,455 Series AA Warrants from the February
14, 2017 Public Offering were exercised and, together with the exercise of the 4,665,000 Series AAA and Series BBB Warrants exercised
by the Exercising Holders described above, the Company received aggregate gross proceeds of approximately $20.0 million in October
2017.
On
October 27, 2017, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Oppenheimer
& Co. Inc. (the “Underwriter”), relating to the issuance and sale (the “Offering”) of 2,640,000 shares
(the “Shares”) of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”), and
warrants to purchase an aggregate of 1,320,000 shares of Common Stock. Each share of Common Stock was sold together with 0.5 warrants
(the “Investor Warrants”), each whole Investor Warrant being exercisable for one share of Common Stock, at an offering
price of $2.50 per share of Common Stock and related Investor Warrants.
Pursuant
to terms of the Underwriting Agreement, the Underwriter agreed to purchase the Shares and related Investor Warrants from the Company
at a price of $2.325 per share and related Investor Warrants. Each Investor Warrant is exercisable six months from the date of
issuance. The Investor Warrants have an exercise price of $3.00 per whole share and expire five years from the date first exercisable.
The
Company received $6.6 million of gross proceeds from the sale of the Shares and Investor Warrants. The Offering closed on October
31, 2017. This Offering was made pursuant to the company’s effective shelf registration statement on Form S-3 (File No.
333-206789) filed with the Securities and Exchange Commission on September 4, 2015 and declared effective on September 25, 2015.
The
Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing,
indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act, other obligations
of the parties, and termination provisions. The Company also agreed to issue to the Underwriter warrants to purchase up to 66,000
shares of the Company’s Common Stock, such issuance being exempt from registration pursuant to Section 4(a)(2) of the Securities
Act.
The
Company received gross proceeds of $22.0 million from the exercise of warrants to purchase 7,617,147 shares of Common Stock in
2017.
On
June 27, 2018, Celsion Corporation, a Delaware corporation (“Celsion”), entered into a loan agreement with Horizon
Technology Finance Corporation (“Horizon”) that provides $10 million in new capital (the “Horizon Credit Agreement”).
Celsion drew down $10 million upon closing of the Horizon Credit Agreement on June 27, 2018. The Company anticipates that it will
use the funding provided under the Horizon Credit Agreement for working capital and advancement of its product pipeline including
ThermoDox® for the treatment of hepatocellular carcinoma (“HCC”) and GEN-1 for the treatment of newly diagnosed
ovarian cancer, as well as other strategic initiatives designed to broaden its development pipeline.
The
obligations under the Horizon Credit Agreement are secured by a first-priority security interest in substantially all assets of
Celsion other than intellectual property assets. The obligations will bear interest at a rate calculated based on one-month LIBOR
plus 7.625%. Payments under the loan agreement are interest only for the first twenty-four (24) months after loan closing, followed
by a 24-month amortization period of principal and interest through the scheduled maturity date.
As
a fee in connection with the Horizon Credit Agreement, Celsion issued Horizon warrants exercisable for a total of 190,114 shares
of Celsion’s Common Stock (the “Warrants”) at a per share exercise price of $2.63. The Warrants are immediately
exercisable for cash or by net exercise from the date of grant and will expire after ten years from the date of grant. Following
the date of grant and within 90 days, Celsion is required to register the Common Stock underlying the Warrants.
The
Horizon Credit Agreement contains customary representations, warranties and affirmative and negative covenants including, among
other things, covenants that limit or restrict Celsion’s ability to grant liens, incur indebtedness, make certain restricted
payments, merge or consolidate and make dispositions of assets. Upon the occurrence of an event of default under the Horizon Credit
Agreement, the lenders may cease making loans, terminate the Horizon Credit Agreement, declare all amounts outstanding to be immediately
due and payable and foreclose on or liquidate Celsion’s assets that comprise the lenders’ collateral. The Horizon
Credit Agreement specifies a number of events of default (some of which are subject to applicable grace or cure periods), including,
among other things, non-payment defaults, covenant defaults, a material adverse effect on Celsion or its assets, cross-defaults
to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults.
We
are a party to a Common Stock Purchase Agreement (the “CSPA”) dated as of August 31, 2018 with Aspire Capital Fund,
LLC, pursuant to which we may sell additional shares of our Common Stock having an aggregate offering price of $15 million from
time to time. As of the date of this prospectus supplement, the Company not sold or issued any shares of Common Stock under the
CSPA.
On
October 10, 2018, the Company delivered notice to Cantor Fitzgerald & Co. (“Cantor”) terminating the Controlled
Equity Offering
SM
Sales Agreement, dated February 1, 2013 (the “Sales Agreement”), with Cantor effective
as of October 20, 2018. The Sales Agreement permitted the Company to sell additional shares of our Common Stock having an aggregate
offering price of up to $25 million through “at the market” equity offerings from time to time. From February 2013
through the date of termination, the Company sold 1,784,396 shares of Common Stock under the Sales Agreement generating gross
proceeds of $12.8 million. The Company has no further obligations under the Sales Agreement.
Corporate
Information
We
were founded in 1982 and are a Delaware corporation. Our shares of Common Stock trade on The NASDAQ Capital Market under the symbol
“CLSN.” Our principal executive offices are located at 997 Lenox Drive, Suite 100, Lawrenceville, New Jersey 08648.
Our telephone number is (609) 896-9100 and our website is www.celsion.com. The information available on or through our website
is not part of, nor incorporated by reference into, this prospectus supplement or the accompanying prospectus, and should not
be relied upon.
THE
OFFERING
Common
Stock Offered by Us
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Shares
of our Common Stock having an aggregate offering price of up to $15,000,000 and 164,835 Commitment Shares.
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Common
Stock to be Outstanding after this Offering
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Up
to 23,508,135 shares (as more fully described in the notes following this table), assuming sales of 5,761,850 shares of our
Common Stock in this offering at an offering price of $2.68 per share, which was the lowest last reported sale price of our
Common Stock on The NASDAQ Capital Market on October 10, 2018, and the Commitment Shares as discussed below. The actual number
of shares issued will vary depending on the sales price under this offering.
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Manner
of Offering
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Issuance
of 164,835 Commitment Shares to Aspire Capital in consideration for entering into the Purchase Agreement and additional Purchase
Shares to Aspire Capital from time to time, subject to certain minimum stock price requirements, and daily and other caps,
for an aggregate offering price of up to $15.0 million. See “The Aspire Transaction” and “Plan of Distribution”
beginning on pages S-21 and S-24 of this prospectus supplement, respectively.
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Use
of Proceeds
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We
currently intend to use the net proceeds from this offering, if any, for general corporate purposes, including research and
development activities, capital expenditures and working capital. See “Use of Proceeds” on page S-18 of this prospectus
supplement.
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NASDAQ
Capital Market Symbol
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“CLSN”
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Risk
Factors
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Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-12 of this prospectus
supplement.
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The
number of shares of our Common Stock shown above to be outstanding immediately before and after this offering is based on 17,746,285
shares outstanding as of June 30, 2018, and excludes, as of such date:
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3,029,741
shares of our Common Stock subject to outstanding options having a weighted average exercise price of $4.48 per share;
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5,000
shares of our Common Stock reserved for future issuance pursuant to our existing stock incentive plans;
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365,152
shares of our Common Stock reserved for future issuance pursuant to our existing stock incentive plans;
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3,248,516
shares of our Common Stock issuable upon exercise of warrants outstanding, having a weighted average exercise price of $5.14
per share; and
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334
shares of our Common Stock held as treasury stock.
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RISK
FACTORS
An
investment in our Common Stock involves a high degree of risk. Before deciding whether to invest in our securities, you should
consider carefully the risks discussed below, together with the risks under the heading “Risk Factors” beginning on
page 23 under Part I, Item IA of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC
on March 27, 2018, and any subsequent Quarterly Report on Form 10-Q, which are incorporated by reference into this prospectus
supplement and the accompanying prospectus, as well as the other information in this prospectus supplement, the accompanying prospectus,
the information and documents incorporated by reference herein and therein and in any free writing prospectus that we have authorized
for use in connection with this offering. If any of the identified risks actually occur, they could materially adversely affect
our business, financial condition, operating results or prospects and the trading price of our securities. Additional risks and
uncertainties that we do not presently know or that we currently deem immaterial may also impair our business, financial condition,
operating results and prospects and the trading price of our securities.
Risk
Related to Our Business
New
gene-based products for therapeutic applications are subject to extensive regulation by the FDA and comparable agencies in other
countries. The precise regulatory requirements with which we will have to comply, now and in the future, are uncertain due to
the novelty of the gene-based products we are developing.
Limited
data exist regarding the safety and efficacy of DNA-based therapeutics compared with conventional therapeutics, and government
regulation of DNA-based therapeutics is evolving. Adverse events or the perception of adverse events in the field of gene therapy
generally, or with respect to our product candidates specifically, may have a particularly negative impact on public perception
of gene therapy and result in greater governmental regulation, including future bans or stricter standards imposed on gene-based
therapy clinical trials, stricter labeling requirements and other regulatory delays in the testing or approval of our potential
products. Any increased scrutiny could delay or increase the costs of our product development efforts or clinical trials.
Even
if our products receive regulatory approval, they may still face future development and regulatory difficulties. Government regulators
may impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially
costly post-approval studies. This governmental oversight may be particularly strict with respect to gene-based therapies.
Risks
Related to This Offering and Our Common Stock
Sales
of our Common Stock to Aspire Capital may cause substantial dilution to our existing stockholders and the sale of the shares of
our Common Stock acquired by Aspire Capital could cause the price of our Common Stock to decline.
This
prospectus supplement relates to the 164,835 Commitment Shares and an aggregate amount of up to $15.0 million of shares of Common
Stock that we may issue and sell to Aspire Capital from time to time pursuant to the Purchase Agreement. It is anticipated that
shares offered to Aspire Capital in this offering will be sold over a period of up to 24 months from the date of this prospectus
supplement. The number of shares ultimately offered for sale to Aspire Capital under this prospectus supplement is dependent upon
the number of shares we elect to sell to Aspire Capital under the Purchase Agreement. Depending upon market liquidity at the time,
sales of shares of our Common Stock under the Purchase Agreement may cause the trading price of our Common Stock to decline.
Aspire
Capital may ultimately purchase all, some or none of the $15.0 million shares of Common Stock that, together with the 164,835
Commitment Shares, is the subject of this prospectus supplement. After Aspire Capital has acquired shares under the Purchase Agreement,
it may sell all, some or none of those shares. Sales to Aspire Capital by us pursuant to the Purchase Agreement under this prospectus
supplement may result in substantial dilution to the interests of other holders of our Common Stock. The sale of a substantial
number of shares of our Common Stock to Aspire Capital in this offering, or anticipation of such sales, could make it more difficult
for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect
sales. However, we have the right to control the timing and amount of any sales of our shares to Aspire Capital and the Purchase
Agreement may be terminated by us at any time at our discretion without any cost to us.
We
have a right to sell up to 100,000 Purchase Shares per day under our Purchase Agreement with Aspire Capital, which total may be
increased by mutual agreement up to an additional 2,000,000 Purchase Shares per trading day. The extent to which we rely on Aspire
Capital as a source of funding will depend on a number of factors, including the prevailing market price of our Common Stock and
the extent to which we are able to secure working capital from other sources. The aggregate number of shares that we can sell
to Aspire Capital under the Purchase Agreement may in no case exceed 3,580,433 shares of our Common Stock (which is equal to approximately
19.99% of the Common Stock outstanding on the date of the Purchase Agreement), including the 164,835 Commitment Shares (the “Exchange
Cap”), unless shareholder approval is obtained to issue more, in which case the Exchange Cap will not apply.
Future
sales of a significant number of our shares of Common Stock in the public markets, or the perception that such sales could occur,
could depress the market price of our shares of Common Stock.
Sales
of a substantial number of our shares of Common Stock in the public markets, or the perception that such sales could occur, could
depress the market price of our shares of Common Stock and impair our ability to raise capital through the sale of additional
equity securities. A substantial number of shares of Common Stock are being offered by this prospectus supplement, and we cannot
predict if and when Aspire Capital may sell such shares in the public markets. We cannot predict the number of these shares that
might be sold nor the effect that future sales of our shares of Common Stock would have on the market price of our shares of Common
Stock.
The
market price of our Common Stock has been, and we expect it to continue to be, volatile and fluctuate significantly, which could
result in substantial losses for investors and subject us to securities class action litigation.
The
trading price for our Common Stock has been, and we expect it to continue to be, volatile. Our January 31, 2013 announcement that
the HEAT Study failed to meet its primary endpoint has resulted in significant volatility and a steep decline in the price of
our Common Stock, a level of decline that could result in securities litigation. Plaintiffs’ securities litigation firms
have publicly announced that they are investigating potential securities fraud claims that they may wish to make against us. The
price at which our Common Stock trades depends upon a number of factors, including our historical and anticipated operating results,
our financial situation, announcements of technological innovations or new products by us or our competitors, our ability or inability
to raise the additional capital we may need and the terms on which we raise it, and general market and economic conditions. Some
of these factors are beyond our control. Broad market fluctuations may lower the market price of our Common Stock and affect the
volume of trading in our stock, regardless of our financial condition, results of operations, business or prospect. The closing
price of our Common Stock as reported on The NASDAQ Capital Market had a high price of $27.86 and a low price of $4.20 in the
52-week period ended December 31, 2016, a high price of $6.06 and a low price of $1.51 in the 52-week period ended December 31,
2017, and a high price of $3.32 and a low price of $1.99 from January 1, 2018 until October 11, 2018. Among the factors that may
cause the market price of our Common Stock to fluctuate are the risks described in this “Risk Factors” section and
other factors, including:
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results
of preclinical and clinical studies of our product candidates or those of our competitors;
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regulatory
or legal developments in the U.S. and other countries, especially changes in laws and regulations applicable to our product
candidates;
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actions
taken by regulatory agencies with respect to our product candidates, clinical studies, manufacturing process or sales and
marketing terms;
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introductions
and announcements of new products by us or our competitors, and the timing of these introductions or announcements;
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announcements
by us or our competitors of significant acquisitions or other strategic transactions or capital commitments;
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fluctuations
in our quarterly operating results or the operating results of our competitors;
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variance
in our financial performance from the expectations of investors;
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changes
in the estimation of the future size and growth rate of our markets;
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changes
in accounting principles or changes in interpretations of existing principles, which could affect our financial results;
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failure
of our products to achieve or maintain market acceptance or commercial success;
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conditions
and trends in the markets we serve;
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changes
in general economic, industry and market conditions;
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success
of competitive products and services;
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changes
in market valuations or earnings of our competitors;
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changes
in our pricing policies or the pricing policies of our competitors;
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changes
in legislation or regulatory policies, practices or actions;
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the
commencement or outcome of litigation involving our company, our general industry or both;
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recruitment
or departure of key personnel;
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changes
in our capital structure, such as future issuances of securities or the incurrence of additional debt;
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actual
or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our Common Stock,
other comparable companies or our industry generally;
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actual
or expected sales of our Common Stock by our stockholders;
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acquisitions
and financings, including the EGEN acquisition; and
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the
trading volume of our Common Stock.
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In
addition, the stock markets in general, The NASDAQ Capital Market and the market for pharmaceutical companies, in particular,
may experience a loss of investor confidence. Such loss of investor confidence may result in extreme price and volume fluctuations
in our Common Stock that are unrelated or disproportionate to the operating performance of our business, financial condition or
results of operations. These broad market and industry factors may materially harm the market price of our Common Stock and expose
us to securities class action litigation. Such litigation, even if unsuccessful, could be costly to defend and divert management’s
attention and resources, which could further materially harm our financial condition and results of operations.
You
will experience immediate and substantial dilution in the net tangible book value per share of the Common Stock they purchase.
Since
the price per share of our Common Stock being offered is higher than the net tangible book value per share of our Common Stock,
you will suffer substantial dilution in the net tangible book value of the Common Stock you purchase in this offering. See the
section entitled “Dilution” in this prospectus supplement for a more detailed discussion of the dilution you will
incur if you purchase Common Stock in this offering. In addition, we have a significant number of stock options and warrants outstanding.
If the holders of these securities exercise such securities, you may incur further dilution.
Our
stockholders may experience significant dilution as a result of future equity offerings and exercise of outstanding options and
warrants.
In
order to raise additional capital or pursue strategic transactions, we may in the future offer, issue or sell additional shares
of our Common Stock or other securities convertible into or exchangeable for our Common Stock, including the issuance of Common
Stock in relation to the achievement, if any, of milestones triggering our payment of earn-out consideration in connection with
the EGEN acquisition. We cannot assure you that we will be able to sell shares or other securities in any other offering at a
price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing
shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we
sell additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock in future
transactions may be higher or lower than the price per share in this offering.
Our
stockholders may experience significant dilution as a result of future equity offerings or issuance. Investors purchasing shares
or other securities in the future could have rights superior to existing stockholders. As of October 11, 2018, we have a significant
number of securities convertible into, or allowing the purchase of, our Common Stock, including 3,248,516 shares of Common Stock
issuable upon exercise of warrants outstanding, 3,247,745 options to purchase shares of our Common Stock and restricted stock
awards outstanding, and 335,152 shares of Common Stock reserved for future issuance under our stock incentive plans. The exercise
of outstanding options and warrants having an exercise price per share that is less than the offering price per share in this
offering will increase dilution to investors in this offering.
Future
sales of our Common Stock in the public market could cause our stock price to fall.
Sales
of a substantial number of shares of our Common Stock in the public market, or the perception that these sales might occur, could
depress the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity
securities. As of October 11, 2018, we had 17,746,285 shares of Common Stock outstanding, all of which shares, other than shares
held by our directors and certain officers, were eligible for sale in the public market, subject in some cases to compliance with
the requirements of Rule 144, including the volume limitations and manner of sale requirements. In addition, all of the shares
of Common Stock issuable upon exercise of warrants will be freely tradable without restriction or further registration upon issuance.
We
have broad discretion in the use of the net proceeds from this offering.
Our
management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in
ways with which you may not agree. Accordingly, you will be relying on the judgment of our management with regard to the use of
the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are
being used appropriately. It is possible that the net proceeds will be invested or otherwise used in a way that does not yield
a favorable, or any, return for the Company.
The
adverse capital and credit market conditions could affect our liquidity.
Adverse
capital and credit market conditions could affect our ability to meet liquidity needs, as well as our access to capital and cost
of capital. The capital and credit markets have experienced extreme volatility and disruption in recent years. Our results of
operations, financial condition, cash flows and capital position could be materially adversely affected by continued disruptions
in the capital and credit markets.
We
have never paid cash dividends on our Common Stock in the past and do not anticipate paying cash dividends on our Common Stock
in the foreseeable future.
We
have never declared or paid cash dividends on our Common Stock. We do not anticipate paying any cash dividends on our Common Stock
in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and
growth of our business. As a result, capital appreciation, if any, of our Common Stock will be the sole source of gain for the
foreseeable future for holders of 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. This preferred stock may be issued by our
board of directors on such terms as it determines, without further stockholder approval. Therefore, our board of directors may
issue such preferred stock on terms unfavorable to a potential bidder in the event that our board of directors opposes a merger
or acquisition. 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 of directors. 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, even if such action were beneficial
to some, or even a majority, of our stockholders.
We
may be unable to maintain compliance with The NASDAQ Marketplace Rules which could cause our Common Stock to be delisted from
The NASDAQ Capital Market. This could result in the lack of a market for our Common Stock, cause a decrease in the value of an
investment in us, and adversely affect our business, financial condition and results of operations.
Our
Common Stock is currently listed on The NASDAQ Capital Market. To maintain the listing of our Common Stock on The NASDAQ Capital
Market, we are required to meet certain listing requirements, including, among others, either: (i) a minimum closing bid price
of $1.00 per share, a market value of publicly held shares (excluding shares held by our executive officers, directors and 10%
or more stockholders) of at least $1 million and stockholders’ equity of at least $2.5 million; or (ii) a minimum closing
bid price of $1.00 per share, a market value of publicly held shares (excluding shares held by our executive officers, directors
and 10% or more stockholders) of at least $1 million and a total market value of listed securities of at least $35 million. As
of October 10, 2018, the closing sale price per share of our Common Stock was $2.68 the total market value of our publicly held
shares of our Common Stock (excluding shares held by our executive officers, directors and 10% or more stockholders) was approximately
$47.3 million and the total market value of our listed securities was approximately $47.6 million. There is no assurance that
we will continue to meet the minimum closing price requirement and other listing requirements. As of June 30, 2018, we had stockholders’
equity of approximately $19.1 million.
On
December 15, 2016, we received a letter from NASDAQ indicating that the closing bid price of our Common Stock fell below $1.00
per share for the previous 30 consecutive business days, and that we are therefore not in compliance with the minimum bid price
requirement for continued inclusion on The NASDAQ Capital Market and our Common Stock could be subject to delisting from The NASDAQ
Capital Market. If our Common Stock is delisted, trading of the stock will most likely take place on an over-the-counter market
established for unlisted securities, such as the Pink Sheets or the OTC Bulletin Board. An investor is likely to find it less
convenient to sell, or to obtain accurate quotations in seeking to buy, our Common Stock on an over-the-counter market, and many
investors may not buy or sell our Common Stock due to difficulty in accessing over-the-counter markets, or due to policies preventing
them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our Common
Stock would be subject to SEC rules regarding “penny stock,” which impose additional disclosure requirements on broker-dealers.
The regulations relating to penny stocks, coupled with the typically higher cost per trade to investors in penny stocks due to
factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher priced
stock, would further limit the ability and willingness of investors to trade in our Common Stock. For these reasons and others,
delisting would adversely affect the liquidity, trading volume and price of our Common Stock, causing the value of an investment
in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability
to attract and retain qualified executives and employees and to raise capital.
On
June 14, 2017, we announced we received notice from NASDAQ on June 13, 2017 indicating that the Company regained compliance with
the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2) for continued listing on The NASDAQ Capital Market. In
order to regain compliance with the Rule, the Company was required to maintain a minimum closing bid price of $1.00 or more for
at least 10 consecutive trading days. This requirement was met on June 12, 2017, the tenth consecutive trading day when the closing
bid price of the Company’s Common Stock was over $1.00. Accordingly, the Company is currently in compliance with all applicable
listing standards and its Common Stock will continue to be listed on The NASDAQ Capital Market.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements contained or incorporated by reference in this prospectus supplement, in any applicable prospectus and in any related
free writing prospectus constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995 and releases issued by the SEC and within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities
Act), and Section 21E of the Exchange Act. From time to time, we may publish forward-looking statements relating to such matters
as anticipated financial performance, business prospects, technological developments, product pipelines, clinical trials and research
and development activities, the adequacy of capital reserves and anticipated operating results and cash expenditures, current
and potential collaborations, strategic alternatives and other aspects of our present and future business operations and similar
matters that also constitute such 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 expressed or implied by such
forward-looking statements. Such statements include, without limitation:
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any
statements regarding future operations, plans, regulatory filings or approvals, including the plans and objectives of management
for future operations or programs or proposed new products or services;
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any
statements regarding the performance, or likely performance, or outcomes or economic benefit of any of our research and development
activities, proposed or potential clinical trials or new drug filing strategies or timelines, including whether any of our
clinical trials will be completed successfully within any specified time period or at all;
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●
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any
projections of earnings, cash resources, revenue, expense or other financial terms;
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●
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any
statements regarding the initiation, timing, progress and results of our research and development programs, preclinical studies,
any clinical trials and Investigational New Drug application, New Drug Application and other regulatory submissions;
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●
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any
statements regarding cost and timing of development and testing, capital structure, financial condition, working capital needs
and other financial items;
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●
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any
statements regarding the implementation of our business model and integration of acquired technologies, assets or businesses
and existing or future collaborations, mergers, acquisitions or other strategic transactions;
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any
statements regarding approaches to medical treatment, any introduction of new products by others, any possible licenses or
acquisitions of other technologies, assets or businesses, or possible actions by customers, suppliers, strategic partners,
potential strategic partners, competitors or regulatory authorities;
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●
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any
statements regarding development or success of our collaboration arrangements or future payments that may come due to us under
these arrangements;
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●
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any
statements regarding compliance with the listing standards of The NASDAQ Capital Market; and
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any
statements regarding future economic conditions or performance and any statement of assumptions underlying any of the foregoing.
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In
some cases, you can identify forward-looking statements by terminology such as “expect,” “anticipate,”
“estimate,” “continue,” “plan,” “believe,” “could,” “intend,”
“predict,” “may,” “should,” “will,” “would” and words of similar import
regarding our expectations. Forward-looking statements are only predictions. Actual events or results may differ materially. Although
we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our industry, business
and operations, we cannot guarantee that actual results will not differ materially from our expectations. In evaluating such forward-looking
statements, you should specifically consider various factors, including the risks outlined under “Risk Factors” contained
in this prospectus supplement and any related free writing prospectus, and in our most recent Annual Report on Form 10-K and our
most recent filed Quarterly Reports on Form 10-Q, as well as any amendments thereto reflected in subsequent filings with the SEC.
The discussion of risks and uncertainties set forth in those filings is not necessarily a complete or exhaustive list of all risks
facing us at any particular point in time. We operate in a highly competitive, highly regulated and rapidly changing environment,
and our business is in a state of evolution. Therefore, it is likely that new risks will emerge and the nature and elements of
existing risks will change. It is not possible for management to predict all such risk factors or changes therein or to assess
either the impact of all such risk factors on our business or the extent to which any individual risk factor, combination of factors
or new or altered factors may cause results to differ materially from those contained in any forward-looking statement. Forward-looking
statements represent our estimates and assumptions only as of the date such forward-looking statements are made. You should carefully
read this prospectus supplement and any related free writing prospectus, together with the information incorporated herein or
therein by reference as described under the section titled “Information Incorporated By Reference,” and with the understanding
that our actual future results may materially differ from what we expect.
Except
as required by law, forward-looking statements speak only as of the date they are made, and we assume no obligation to update
any forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated
in any forward-looking statements, even if new information becomes available.
USE
OF PROCEEDS
We
currently intend to use the net proceeds from this offering, if any, for general corporate purposes, including research and development
activities, capital expenditures and working capital. Pending the application of the net proceeds, we intend to invest the net
proceeds in short-term, investment grade, interest-bearing securities.
As
of the date of this prospectus supplement, we cannot specify with certainty all of the particular uses for the net proceeds to
us from this offering, if any. As a result, our management will have broad discretion regarding the timing and application of
the net proceeds from this offering.
DILUTION
If
you invest in our Common Stock, you will experience dilution to the extent of the difference between the price per share you pay
in this offering and the net tangible book value per share of our Common Stock immediately after this offering. Our net tangible
book value as of June 30, 2018 was approximately $(3.8) million, or $(0.21) per share of our Common Stock. Net tangible book value
per share as of June 30, 2018 is equal to our total tangible assets minus total liabilities, all divided by the number of shares
of Common Stock outstanding as of June 30, 2018.
After
giving effect to the sale of our Common Stock in the aggregate amount of $15.0 million and 164,835 Commitment Shares in this offering
at an assumed offering price of $2.68 per share, the lowest last reported sale price of our Common Stock on The NASDAQ Capital
Market on October 10, 2018, and after deducting estimated offering expenses payable by us, our as adjusted net tangible book value
would have been approximately $11.1 million, or approximately $0.47 per share of Common Stock, as of June 30, 2018. This represents
an immediate increase in net tangible book value of approximately $2.59 per share to existing stockholders and an immediate dilution
of approximately $2.21 per share to investors in this offering. The following table illustrates this calculation on a per share
basis.
Assumed
public offering price per share
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|
|
|
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|
$
|
2.68
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Net
tangible book value per share as of June 30, 2018
|
|
$
|
(0.21
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)
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Increase
in net tangible book value per share attributable to this offering
|
|
$
|
0.68
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As
adjusted net tangible book value per share as of June 30, 2018, after giving effect to this offering
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|
|
|
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$
|
0.47
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|
Dilution
per share to new investors purchasing shares in this offering
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|
|
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$
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2.21
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The
table above assumes for illustrative purposes that an aggregate of 5,761,850 shares of our Common Stock are sold at a price of
$2.68 per share, the last reported sale price of our Common Stock on The NASDAQ Capital Market on October 10, 2018, including
the issuance of 164,835 Commitment Shares and aggregate gross proceeds of $15.0 million. The shares sold in this offering, if
any, will be sold from time to time at various prices. An increase of $0.50 per share in the price at which the shares are sold
from the assumed offering price of $2.68 per share shown in the table above, assuming all of our Common Stock in the aggregate
amount of $15.0 million is sold at the price of $3.18, would increase our adjusted net tangible book value per share after the
offering to $0.50 per share and would increase the dilution in net tangible book value per share to new investors in this offering
to $2.68 per share, after deducting estimated aggregate offering expenses payable by us. A decrease of $0.50 per share in the
price at which the shares are sold from the assumed offering price of $2.68 per share shown in the table above, assuming all of
our Common Stock in the aggregate amount of $15.0 million is sold at the price of $2.18, would decrease our adjusted net tangible
book value per share after the offering to $0.45 per share and would decrease the dilution in net tangible book value per share
to new investors in this offering to $1.73 per share, after deducting estimated aggregate offering expenses payable by us. This
information is supplied for illustrative purposes only.
The
number of shares of our Common Stock shown above to be outstanding immediately before and after this offering is based on 17,746,285
shares outstanding as of June 30, 2018, and excludes, as of such date:
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3,029,741
shares of our Common Stock subject to outstanding options having a weighted average exercise price of $4.48 per share;
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●
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5,000
shares of our Common Stock reserved for future issuance pursuant to our existing stock incentive plans;
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●
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365,152
shares of our Common Stock reserved for future issuance pursuant to our existing stock incentive plans;
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●
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3,248,516
shares of our Common Stock issuable upon exercise of warrants outstanding, having a weighted average exercise price of $5.14
per share; and
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●
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334
shares of our Common Stock held as treasury stock.
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PRICE
RANGE OF OUR COMMON STOCK
The
following table sets forth the high and low reported closing sale prices on The NASDAQ Capital Market for the periods indicated:
Period
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High
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Low
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Year
Ending December 31, 2018
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|
|
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First
Quarter
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$
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2.82
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|
|
$
|
2.12
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Second
Quarter
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|
$
|
3.32
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|
|
$
|
1.99
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|
Third
Quarter
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|
$
|
3.26
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|
|
$
|
2.40
|
|
Fourth
Quarter (through October 10, 2018)
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|
$
|
2.79
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$
|
2.65
|
|
|
|
|
|
|
|
|
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|
Year
Ended December 31, 2017
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|
|
|
|
|
|
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|
First
Quarter
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|
$
|
7.14
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|
|
$
|
2.94
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|
Second
Quarter
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|
$
|
4.31
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|
|
$
|
2.05
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|
Third
Quarter
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|
$
|
2.42
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|
|
$
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1.28
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Fourth
Quarter
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|
$
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6.06
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|
|
$
|
1.51
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|
|
|
|
|
|
|
|
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|
Year
Ended December 31, 2016
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|
|
|
|
|
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|
First
Quarter
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|
$
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27.86
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|
|
$
|
14.56
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|
Second
Quarter
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|
$
|
24.92
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|
|
$
|
18.20
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Third
Quarter
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|
$
|
18.76
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|
|
$
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16.80
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Fourth
Quarter
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$
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13.86
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$
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4.20
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|
The
reported last sale price of our Common Stock on The NASDAQ Capital Market on October 10, 2018 was $2.68 per share.
THE
ASPIRE TRANSACTION
General
On
August 31, 2018, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Aspire Capital
Fund, LLC, an Illinois limited liability company (“Aspire Capital”), which provides that, upon the terms and subject
to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $15.0 million
of shares of our Common Stock (the “Purchase Shares”) from time to time over the term of the Purchase Agreement. As
consideration for entering into the Purchase Agreement, we agreed to issue 164,835 shares of our Common Stock to Aspire Capital
(the “Commitment Shares”).
We
are filing this prospectus supplement with regard to the offering of our Common Stock consisting of (i) the Commitment Shares
and (ii) additional shares of our Common Stock in an aggregate amount of up to $15.0 million of shares of our Common Stock that
we may sell to Aspire Capital pursuant to the Purchase Agreement.
Purchase
of Shares under the Purchase Agreement
On
September 4, 2018, the conditions necessary for purchases under the Purchase Agreement to commence were satisfied. On any business
day over the 24-month term of the Purchase Agreement, we have the right, in our sole discretion, to present Aspire Capital with
a purchase notice (each, a “Purchase Notice”) directing Aspire Capital to purchase up to 100,000 Purchase Shares per
business day. We and Aspire Capital also may mutually agree to increase the number of shares that may be sold to as much as an
additional 2,000,000 Purchase Shares per business day. The purchase price per Purchase Share pursuant to such Purchase Notice
(the “Purchase Price”) is the lower of:
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(i)
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the
lowest sale price for our Common Stock on the date of sale; or
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(ii)
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the
average of the three lowest closing sale prices for our Common Stock during the 10 consecutive business days ending on the
business day immediately preceding the purchase date.
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The
applicable Purchase Price will be determined prior to delivery of any Purchase Notice.
In
addition, on any date on which we submit a Purchase Notice to Aspire Capital for at least 100,000 Purchase Shares, we also have
the right, in our sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP
Purchase Notice”) directing Aspire Capital to purchase an amount of our Common Stock equal to up to 30% of the aggregate
shares of Common Stock traded on the next business day (the “VWAP Purchase Date”), subject to a maximum number of
shares determined by us (the “VWAP Purchase Share Volume Maximum”). The purchase price per Purchase Share pursuant
to such VWAP Purchase Notice (the “VWAP Purchase Price”) shall be the lesser of the closing sale on the VWAP Purchase
Date or 97% of the volume weighted average price for our Common Stock traded on (i) the VWAP Purchase Date if the aggregate shares
to be purchased on that date does not exceed the VWAP Purchase Share Volume Maximum, or (ii) the portion of such business day
until such time as the aggregate shares to be purchased will equal the VWAP Purchase Share Volume Maximum.
The
number of Purchase Shares covered by and timing of each Purchase Notice or VWAP Purchase Note are determined by the Company, at
our sole discretion. The aggregate number of shares that we can sell to Aspire Capital under the Purchase Agreement may in no
case exceed 3,579,045 shares of our Common Stock (which is equal to approximately 19.99% of the Common Stock outstanding on the
date of the Purchase Agreement), including the 164,835 Commitment Shares (the “Exchange Cap”), unless shareholder
approval is obtained to issue more, in which case the Exchange Cap will not apply; provided that at no time shall Aspire Capital
(together with its affiliates) beneficially own more than 19.99% of our Common Stock. Aspire Capital has no right to require any
sales by us but is obligated to make purchases from us as we direct in accordance with the Purchase Agreement. There are no limitations
on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights,
penalties or liquidated damages in the Purchase Agreement. We did not pay any additional amounts to reimburse or otherwise compensate
Aspire Capital in connection with the transaction. The Purchase Agreement may be terminated by us at any time, at our discretion,
without any penalty or cost to us.
Events
of Default
Aspire
Capital may terminate the Purchase Agreement upon the occurrence of any of the following events of default:
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the
effectiveness of any registration statement that is required to be maintained effective pursuant to the terms of the registration
rights agreement between us and Aspire Capital lapses for any reason (including, without limitation, the issuance of a stop
order) or is unavailable for sale of our shares of Common Stock in accordance with the terms of the registration rights agreement,
and such lapse or unavailability continues for a period of 10 consecutive business days or for more than an aggregate of 30
business days in any 365-day period, which is not in connection with a post-effective amendment to any such registration statement
or the filing of a new registration statement; provided, however, that in connection with any post-effective amendment to
such registration statement or filing of a new registration statement that is required to be declared effective by the SEC,
such lapse or unavailability may continue for a period of no more than 30 consecutive business days, which such period shall
be extended for an additional 30 business days if the Company receives a comment letter from the SEC in connection therewith;
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|
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●
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the
suspension from trading or failure of our Common Stock to be listed on our principal market for a period of three consecutive
business days;
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|
|
●
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the
delisting of our Common Stock from our principal market, provided our Common Stock is not immediately thereafter trading on
the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market, or the OTCQB marketplace or OTCQX marketplace of the OTC Markets Group;
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|
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●
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our
transfer agent’s failure to issue to Aspire Capital shares of our Common Stock which Aspire Capital is entitled to receive
under the Purchase Agreement within five business days after an applicable purchase date;
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|
|
●
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any
breach by us of the representations or warranties or covenants contained in the Purchase Agreement or any related agreements
which could have a material adverse effect on us, Aspire Capital or the value of the Common Stock, subject to a cure period
of five business days;
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|
|
●
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if
we become insolvent; and
|
|
|
●
|
any
participation or threatened participation in insolvency or bankruptcy proceedings by or against us.
|
Our
Termination Rights
We
may terminate the Purchase Agreement at any time, in our discretion, without any cost or penalty.
No
Short-Selling or Hedging by Aspire Capital
Aspire
Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect
short-selling or hedging of our Common Stock during any time prior to the termination of the Purchase Agreement.
Effect
of Performance of the Purchase Agreement on Our Stockholders
The
Purchase Agreement does not limit the ability of Aspire Capital to sell any or all of the shares it currently owns or receives
in this offering. It is anticipated that shares sold to Aspire Capital in this offering will be sold to Aspire Capital over a
period of up to 24 months from the date of the Purchase Agreement. The subsequent resale by Aspire Capital of our Common Stock
may cause the market price of our Common Stock to decline or to be highly volatile. Aspire Capital may ultimately purchase all,
some or none of the shares of Common Stock that, together with the 164,835 Commitment Shares, is the subject of this prospectus
supplement. Aspire Capital may resell all, some or none of the Commitment Shares and any Purchase Shares it acquires. Therefore,
sales to Aspire Capital by us pursuant to the Purchase Agreement and this prospectus supplement also may result in substantial
dilution to the interests of other holders of our Common Stock. However, we have the right to control the timing and amount of
any sales of our shares to Aspire Capital and the Purchase Agreement may be terminated by us at any time at our discretion without
any cost to us.
Amount
of Potential Proceeds to be Received under the Purchase Agreement
Under
the Purchase Agreement, we may sell Purchase Shares having an aggregate offering price of up to $15.0 million to Aspire Capital
from time to time. The number of shares ultimately offered for sale to Aspire Capital in this offering is dependent upon the number
of shares we elect to sell to Aspire Capital under the Purchase Agreement. The following table sets forth the amount of proceeds
we would receive from Aspire Capital from the sale of shares at varying purchase prices:
Assumed
Average Purchase Price
|
|
|
Proceeds
from the Sale of Shares to Aspire Capital Under the Purchase Agreement Registered in this Offering
|
|
|
Number
of Shares to be Issued in this Offering at the Assumed Average Purchase Price (1)
|
|
|
Percentage
of Outstanding Shares After Giving Effect to the Purchased Shares Issued to Aspire Capital (2)
|
|
$
|
2.00
|
|
|
$
|
15,000,000.00
|
|
|
|
7,500,000
|
|
|
|
29.5
|
%
|
$
|
5.00
|
|
|
$
|
15,000,000.00
|
|
|
|
3,000,000
|
|
|
|
14.3
|
%
|
$
|
10.00
|
|
|
$
|
15,000,000.00
|
|
|
|
1,500,000
|
|
|
|
7.7
|
%
|
$
|
15.00
|
|
|
$
|
15,000,000.00
|
|
|
|
1,000,000
|
|
|
|
5.3
|
%
|
(1)
|
Includes
the total number of Purchase Shares (but not Commitment Shares) which we would have sold under the Purchase Agreement at the
corresponding assumed purchase price set forth in the adjacent column, up to an aggregate purchase price of $15,000,000.
|
|
|
(2)
|
The
denominator is based on 17,746,285 shares outstanding as of June 30, 2018, the 164,835 shares previously issued to Aspire
Capital and the number of shares set forth in the adjacent column which we would have sold to Aspire Capital. The numerator
is based on the number of shares which we may issue to Aspire Capital under the Purchase Agreement (that are the subject of
this offering) at the corresponding assumed purchase price set forth in the adjacent column.
|
Information
with Respect to Aspire Capital
Aspire
Capital Partners LLC (“Aspire Partners”) is the Managing Member of Aspire Capital Fund LLC (“Aspire Fund”).
SGM Holdings Corp (“SGM”) is the Managing Member of Aspire Partners. Mr. Steven G. Martin (“Mr. Martin”)
is the president and sole shareholder of SGM, as well as a principal of Aspire Partners. Mr. Erik J. Brown (“Mr. Brown”)
is the president and sole shareholder of Red Cedar Capital Corp (“Red Cedar”), which is a principal of Aspire Partners.
Mr. Christos Komissopoulos (“Mr. Komissopoulos”) is president and sole shareholder of Chrisko Investors Inc. (“Chrisko”),
which is a principal of Aspire Partners. Mr. William F. Blank, III (“Mr. Blank”) is president and sole shareholder
of WML Ventures Corp. (“WML Ventures”), which is a principal of Aspire Partners. Each of Aspire Partners, SGM, Red
Cedar, Chrisko, WML Ventures, Mr. Martin, Mr. Brown, Mr. Komissopoulos and Mr. Blank may be deemed to be a beneficial owner of
Common Stock held by Aspire Fund. Each of Aspire Partners, SGM, Red Cedar, Chrisko, WML Ventures, Mr. Martin, Mr. Brown, Mr. Komissopoulos
and Mr. Blank disclaims beneficial ownership of the Common Stock held by Aspire Fund.
PLAN
OF DISTRIBUTION
Aspire
Capital is an “underwriter” within the meaning of the Securities Act.
Neither
we nor Aspire Capital can presently estimate the amount of compensation that any agent will receive. We know of no existing arrangements
between Aspire Capital, any other shareholder, broker, dealer, underwriter, or agent relating to the sale or distribution of the
shares offered by this prospectus supplement. At the time a particular offer of shares is made, a prospectus supplement, if required,
will be distributed that will set forth the names of any agents, underwriters, or dealers and any other required information.
We
will pay all of the expenses incident to the registration, offering, and sale of the shares to Aspire Capital. We have agreed
to indemnify Aspire Capital and certain other persons against certain liabilities in connection with the offering of shares of
Common Stock offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute
amounts required to be paid in respect of such liabilities. Aspire Capital has agreed to indemnify us against liabilities under
the Securities Act that may arise from certain written information furnished to us by Aspire Capital specifically for use in this
prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling
persons, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the
Securities Act and is therefore, unenforceable.
Aspire
Capital and its affiliates have agreed not to engage in any direct or indirect short selling or hedging of our Common Stock during
the term of the Purchase Agreement.
We
have advised Aspire Capital that it is required to comply with Regulation M promulgated under the Securities Exchange Act of 1934,
as amended. With certain exceptions, Regulation M precludes the selling shareholder, any affiliated purchasers, and any broker-dealer
or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid
for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M
also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of
that security. All of the foregoing may affect the marketability of the shares offered hereby this prospectus.
We
may suspend the sale of shares to Aspire Capital pursuant to this prospectus for certain periods of time for certain reasons,
including if the prospectus is required to be supplemented or amended to include additional material information.
This
offering will terminate on the date that all shares offered by this prospectus have been sold to Aspire Capital.
LEGAL
MATTERS
The
validity of the shares of our Common Stock being offered by this prospectus supplement will be passed upon for us by Sidley Austin
LLP, Palo Alto, California. Aspire Capital Fund, LLC is being represented in connection with this offering by Morrison & Foerster
LLP, Washington, D.C.
EXPERTS
Withum
Smith + Brown PC, an independent registered public accounting firm, has audited our financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2017, as set forth in their report, which is incorporated by reference in
this prospectus supplement. Our financial statements are incorporated herein by reference in reliance on Withum Smith + Brown
PC’s report, given on their authority as experts in accounting and auditing.
Dixon
Hughes Goodman LLP, an independent registered public accounting firm, has audited our financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2016, as set forth in their report, which is incorporated by reference in
this prospectus supplement. Our financial statements are incorporated herein by reference in reliance on Dixon Hughes Goodman
LLP’s report, given on their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the information reporting requirements of the Exchange Act. In accordance with the Exchange Act, we file annual,
quarterly and current reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information
filed by us are available to the public free of charge at www.sec.gov. You may also read and copy any document we file with the
SEC at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information
on the operation of the public reference facilities by calling the SEC at 1-800-SEC-0330. Copies of certain information filed
by us with the SEC are also available on our website at www.celsion.com. The information available on or through our website is
not part of this prospectus supplement or the accompanying prospectus and should not be relied upon.
This
prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the SEC. This prospectus
supplement and the accompanying prospectus omit some information contained in the registration statement in accordance with SEC
rules and regulations. You should review the information and exhibits in the registration statement for further information about
us and the securities being offered hereby. Statements in this prospectus supplement or the accompanying prospectus concerning
any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to
be comprehensive and are qualified by reference to the filings. You should review the complete document to evaluate these statements.
INFORMATION
INCORPORATED BY REFERENCE
SEC
rules allow us to “incorporate by reference” into this prospectus supplement much of the information we file with
the SEC, which means that we can disclose important information to you by referring you to those publicly available documents.
The information that we incorporate by reference into this prospectus supplement is considered to be part of this prospectus supplement.
These documents may include Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well
as proxy statements. You should read the information incorporated by reference because it is an important part of this prospectus
supplement.
This
prospectus supplement incorporates by reference the documents listed below, other than those documents or the portions of those
documents deemed to be furnished and not filed in accordance with SEC rules:
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our
Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on March 27, 2018;
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our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 11, 2018;
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our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, filed with the SEC on August 14, 2018;
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our
Current Reports on Form 8-K filed with the SEC on February 6, 2018, May 15, 2018, June 28, 2018, September 4, 2018 and October
12, 2018;
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our
Definitive Proxy Statement on Schedule 14A filed with the SEC on March 30, 2018; and
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the
description of our Common Stock contained in our registration statement on Form 8-A filed with the SEC on May 26, 2000, as
amended by a Form 8-A/A dated February 7, 2008, and any amendments or reports filed for the purpose of updating such description.
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Any
statement contained in any document incorporated by reference herein shall be deemed to be modified or superseded for purposes
of this prospectus supplement to the extent that a statement contained in this prospectus supplement or any prospectus modifies
or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus supplement.
We
also incorporate by reference any future filings, other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K
and exhibits filed on such form that are related to such items, made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act, in each case, other than those documents or the portions of those documents deemed to be furnished and not
filed in accordance with SEC rules, until the offering of the securities under the registration statement of which this prospectus
supplement forms a part is terminated or completed. Information in such future filings updates and supplements the information
provided in this prospectus supplement. Any statements in any such future filings will be deemed to modify and supersede any information
in any document we previously filed with the SEC that is incorporated or deemed to be incorporated herein by reference to the
extent that statements in the later filed document modify or replace such earlier statements.
Because
we are incorporating by reference future filings with the SEC, this prospectus supplement is continually updated and later information
filed with the SE C may update and supersede some of the information included or incorporated by reference in this prospectus
supplement. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the
statements in this prospectus supplement or in any document previously incorporated by reference have been modified or superseded.
We
will provide without charge to each person, including any beneficial owners, to whom this prospectus supplement is delivered,
upon his or her written or oral request, a copy of any or all reports or documents referred to above which have been or may be
incorporated by reference into this prospectus supplement but not delivered with this prospectus supplement, excluding exhibits
to those reports or documents unless they are specifically incorporated by reference into those documents. You may request a copy
of these documents by writing or telephoning us at the following address.
Celsion
Corporation
997
Lenox Drive, Suite 100
Lawrenceville,
New Jersey 08648
(609)
896-9100
Attention:
Jeffrey W. Church
Senior
Vice President, Chief Financial Officer
and
Corporate Secretary
PROSPECTUS
$75,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Rights
Units
and
190,114
Shares of Common Stock
Issuable
upon Exercise of Outstanding Warrants
Offered
by the Selling Stockholder
This
prospectus relates to a primary offering by the Company and a secondary offering by the selling stockholder.
In
the primary offering, from time to time, we may offer or sell, together or separately, in one or more offerings:
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common
stock;
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preferred
stock;
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debt
securities;
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warrants
to purchase common stock or preferred stock;
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rights
to purchase common stock or preferred stock; and
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units
comprised of two or more of the foregoing securities.
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We
may sell any combination of these securities in one or more offerings, up to an aggregate offering price of $75,000,000, in amounts,
at prices and on terms to be determined at the time of each offering thereof. This prospectus provides you with a general description
of the securities we may offer. Each time we offer securities using this prospectus, we will provide the specific terms of the
securities and the offering in one or more supplements to this prospectus. We may also authorize one or more free writing prospectuses
to be provided to you in connection with these offerings. The prospectus supplement and any related free writing prospectus may
also add to, update or change the information contained in this prospectus and will also describe the specific manner in which
we will offer the securities.
The
securities may be sold directly by us to investors, through agents designated from time to time or to or through underwriters
or dealers, on a continuous or delayed basis. For additional information on the methods of sale, you should refer to the section
titled “Plan of Distribution” in this prospectus. If any agents or underwriters are involved in the sale of any securities
with respect to which this prospectus is being delivered, the names of such agents or underwriters and any applicable fees, commissions,
discounts and over-allotment options will be set forth in a prospectus supplement. The price to the public of such securities
and the net proceeds that we expect to receive from such sale will also be set forth in a prospectus supplement.
This
prospectus may not be used to sell any securities unless accompanied by a prospectus supplement.
You should carefully read
this prospectus, any accompanying prospectus supplement and any related free writing prospectus, as well as any documents incorporated
by reference, prior to investing in any of our securities.
This
prospectus also relates to the resale, from time to time, by the selling stockholder identified in this prospectus under the caption
“Selling Stockholder,” of up to 190,114 shares of our common stock, par value $0.01 per share, issuable upon exercise
of the certain Warrants to Purchase Shares of Common Stock (the “Warrants”) on the terms described in this prospectus
or in an applicable prospectus supplement. We will not receive any proceeds from the sale of shares of common stock by the selling
stockholder. We will receive proceeds from cash exercise of the Warrants, which, if exercised in cash with respect to all of the
190,114 shares of common stock, would result in gross proceeds of approximately $500,000 to us. The selling stockholder will bear
all commissions and discounts, if any, attributable to the sale of the shares.
The
selling stockholder may sell the shares of our common stock offered by this prospectus from time to time on terms to be determined
at the time of sale through ordinary brokerage transactions or through any other means described in this prospectus under the
caption “Plan of Distribution.” The shares of common stock may be sold at fixed prices, at market prices prevailing
at the time of sale, at prices related to prevailing market price or at negotiated prices.
Investing
in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the
heading “Risk Factors” beginning on page 10 of this prospectus, in any accompanying prospectus supplement and
in any related free writing prospectus, and under similar headings in the documents incorporated by reference into this prospectus,
any accompanying prospectus supplement and any related free writing prospectus.
Our
common stock is traded on The NASDAQ Capital Market under the symbol “CLSN.” On September 27, 2018, the last
reported sale price of our common stock on The NASDAQ Capital Market was $2.79 per share. We do not expect our preferred
stock, debt securities, warrants, rights or units to be listed on any securities exchange or over-the-counter market unless otherwise
described in the applicable prospectus supplement.
As
of September 27, 2018, the aggregate market value of our voting and non-voting common stock held by non-affiliates pursuant
to General Instruction I.B.6. of Form S-3 was $49.7 million which was calculated based on 17,801,648 outstanding
shares of our voting and non-voting common stock held by non-affiliates and at a price of $2.79 per share, the closing
sale price of our common stock reported on The NASDAQ Capital Market on September 27, 2018. As a result, we are eligible
to offer and sell up to an aggregate of 19,330,540 of shares of our common stock pursuant to General Instruction I.B.6. of Form
S-3. During the 12 calendar months prior to and including the date of this prospectus, we have offered and sold $450,000 of securities
under this Registration Statement and or our Registration Statement (File No. 333-206789) filed on September 4, 2015 pursuant
to General Instruction I.B.6 of Form S-3. In no event will we sell the securities covered hereby in a public primary offering
with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below
$75.0 million.
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 October 12, 2018
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (SEC) utilizing
a “shelf” registration process. Under this shelf registration process, we may, from time to time, offer shares of
our common stock, shares of our preferred stock, debt securities, warrants, rights or units comprised of two or more of the foregoing
securities in one or more offerings, for a total maximum offering price not to exceed $75,000,000.
In
addition, this prospectus relates to the resale, from time to time, by the selling stockholder identified in this prospectus under
the caption “Selling Stockholder,” of up to 190,114 shares of our common stock, par value $0.01 per share, issuable
upon exercise of certain Warrants. As described below under “Selling Stockholder”, on page 24 the Warrants
are immediately exercisable for cash or by net exercise from the date of grant and will expire after ten years from the date of
grant. The Warrants are exercisable for a total of 190,114 shares of common stock at $2.63 per share by the selling stockholder.
We will not receive any proceeds from the sale of shares of common stock by the selling stockholder. We will receive proceeds
from the cash exercise of the warrants which, if exercised in cash with respect to all of the 190,114 shares of common stock,
would result in gross proceeds of approximately $500,000 to us.
This
prospectus provides you with a general description of the securities we may offer. Each time we sell any securities under this
prospectus, we will provide a prospectus supplement that will contain more specific information about the terms of that specific
offering, including the specific amounts, prices and terms of the securities offered. Any prospectus supplement may include a
discussion of risks or other special considerations applicable to us or the offered securities. Any prospectus supplement may
also add to, update or change information contained in this prospectus. To the extent there is a conflict between the information
contained in this prospectus, on the one hand, and the information contained in any prospectus, on the other hand, you should
rely on the information in the prospectus supplement. If any statement in one of these documents is inconsistent with a statement
in another document having a later date-for example, a document incorporated by reference in the accompanying prospectus-the statement
in the document having the later date modifies or supersedes the earlier statement.
This
prospectus and any applicable prospectus supplement contain and incorporate by reference market data, industry statistics and
other data that have been obtained or compiled from information made available by third parties. These data, to the extent they
contain estimates or projections, involve a number of assumptions and limitations, and you are cautioned not to give undue weight
to such estimates or projections. Industry publications and other reports we have obtained from independent parties generally
state that the data contained in these publications or other reports have been obtained in good faith or from sources considered
to be reliable, but they do not guarantee the accuracy or completeness of such data.
We
urge you to carefully read this prospectus, any applicable prospectus supplement and any related free writing prospectus, any
documents that we incorporate by reference in this prospectus, any applicable prospectus supplement and any related free writing
prospectus, and the additional information described below under “Where You Can Find More Information” and “Incorporation
of Certain Documents by Reference” before making an investment decision. You should rely only on the information contained
or incorporated by reference in this prospectus, any applicable prospectus supplement and any related free writing prospectus.
We have not authorized anyone to provide you with different information. If anyone provides you with additional, different or
inconsistent information, you should not rely on it. You should not assume that the information we have included in this prospectus,
any applicable prospectus supplement, any related free writing prospectus or any documents incorporated by reference herein or
therein is accurate as of any date other than the dates of those documents. Our business, financial condition, results of operations
and prospects may have changed since those dates.
This
document may only be used where it is legal to sell these securities. This prospectus is not an offer to sell these securities
and it is no soliciting an offer to buy these securities in any jurisdiction whether the offer or sale is not permitted.
Unless
the context indicates otherwise, as used in this prospectus, the terms “Celsion,” “the Company,” “we,”
“us” and “our” refer to Celsion Corporation, a Delaware corporation, and its wholly-owned subsidiary,
CLSN Laboratories, Inc., also a Delaware corporation. The Celsion brand and product names, including but not limited to Celsion
®
and ThermoDox
®
, contained in this prospectus are trademarks, registered trademarks or service marks of Celsion
Corporation or its subsidiary in the United States and certain other countries. This document may also contain references to trademarks
and service marks of other companies that are the property of their respective owners.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
are subject to the information requirements of the Securities Exchange Act of 1934, as amended (Exchange Act). In accordance with
the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Such reports,
proxy statements and other information filed by us are available to the public free of charge at www.sec.gov. You may also read
and copy any document we file with the SEC at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington,
D.C. 20549. You may obtain information on the operation of the public reference facilities by calling the SEC at 1-800-SEC-0330.
Copies of certain information filed by us with the SEC are also available on our website at www.celsion.com. The information available
on or through our website is not part of this prospectus or any accompanying prospectus supplement or related free writing prospectus
and should not be relied upon.
This
prospectus is part of a registration statement that we filed with the SEC. This prospectus omits some information contained in
the registration statement in accordance with SEC rules and regulations. You should review the information and exhibits in the
registration statement for further information about us and the securities being offered hereby. Statements in this prospectus
concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended
to be comprehensive and are qualified by reference to the filings. You should review the complete document to evaluate these statements.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC rules allow us to “incorporate by reference” into this prospectus information that we file with the SEC. Incorporation
by reference allows us to disclose important information to you by referring you to those publicly available documents. The information
that we incorporate by reference into this prospectus is considered to be part of this prospectus. These documents may include
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements. You
should read the information incorporated by reference because it is an important part of this prospectus.
This
prospectus incorporates by reference the documents listed below, other than those documents or the portions of those documents
deemed to be furnished and not filed in accordance with the SEC rules:
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our
Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on March 27, 2018;
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our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2018 filed with the SEC on May 11, 2018 and June 27,
2018;
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our
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018 filed with the SEC on August 14, 2018;
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our
Current Reports on Form 8-K filed with the SEC on February 6, 2018, May 15, 2018, June 28, 2018 and September 4, 2018;
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our
Definitive Proxy Statement on Schedule 14A filed with the SEC on March 30, 2018; and
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the
description of our common stock contained in our registration statement on Form 8-A filed with the SEC on May 26, 2000, as
amended by a Form 8-A/A dated February 7, 2008, and any amendments or reports filed for the purpose of updating such description.
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Any
statement contained in any document incorporated by reference herein shall be deemed to be modified or superseded for purposes
of this prospectus to the extent that a statement contained in this prospectus or any prospectus supplement modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this prospectus.
We
also incorporate by reference any future filings, other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K
and exhibits filed on such form that are related to such items, made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act, in each case, other than those documents or the portions of those documents deemed to be furnished and not
filed in accordance with SEC rules, until the offering of the securities under the registration statement of which this prospectus
forms a part is terminated or completed. Information in such future filings updates and supplements the information provided in
this prospectus. Any statements in any such future filings will be deemed to modify and supersede any information in any document
we previously filed with the SEC that is incorporated or deemed to be incorporated herein by reference to the extent that statements
in the later filed document modify or replace such earlier statements.
Because
we are incorporating by reference future filings with the SEC, this prospectus is continually updated and later information filed
with the SEC may update and supersede some of the information included or incorporated by reference in this prospectus. This means
that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus
or in any document previously incorporated by reference have been modified or superseded.
We
will provide without charge to each person, including any beneficial owners, to whom this prospectus is delivered, upon his or
her written or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference
into this prospectus but not delivered with this prospectus, excluding exhibits to those documents unless they are specifically
incorporated by reference into those documents. You may request a copy of these documents by writing or telephoning us at the
following address.
Celsion
Corporation
997
Lenox Drive, Suite 100
Lawrenceville,
New Jersey 08648
(609)
896-9100
Attention:
Jeffrey W. Church
Senior
Vice President and Chief Financial Officer
FORWARD-LOOKING
STATEMENTS
Certain
statements contained or incorporated by reference in this prospectus, in any applicable prospectus and in any related free writing
prospectus constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and
releases issued by the SEC and within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act),
and Section 21E of the Exchange Act. From time to time, we may publish forward-looking statements relating to such matters as
anticipated financial performance, business prospects, technological developments, product pipelines, clinical trials and research
and development activities, the adequacy of capital reserves and anticipated operating results and cash expenditures, current
and potential collaborations, strategic alternatives and other aspects of our present and future business operations and similar
matters that also constitute such 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 expressed or implied by such
forward-looking statements. Such statements include, without limitation:
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statements regarding future operations, plans, regulatory filings or approvals, including the plans and objectives of management
for future operations or programs or proposed new products or services;
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any
statements regarding the performance, or likely performance, or outcomes or economic benefit of any of our research and development
activities, proposed or potential clinical trials or new drug filing strategies or timelines, including whether any of our
clinical trials will be completed successfully within any specified time period or at all;
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projections of earnings, cash resources, revenue, expense or other financial terms;
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any
statements regarding the initiation, timing, progress and results of our research and development programs, preclinical studies,
any clinical trials and Investigational New Drug application, New Drug Application and other regulatory submissions;
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any
statements regarding cost and timing of development and testing, capital structure, financial condition, working capital needs
and other financial items;
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any
statements regarding the implementation of our business model and integration of acquired technologies, assets or businesses
and existing or future collaborations, mergers, acquisitions or other strategic transactions;
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any
statements regarding approaches to medical treatment, any introduction of new products by others, any possible licenses or
acquisitions of other technologies, assets or businesses, or possible actions by customers, suppliers, strategic partners,
potential strategic partners, competitors or regulatory authorities;
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any
statements regarding development or success of our collaboration arrangements or future payments that may come due to us under
these arrangements;
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statements regarding compliance with the listing standards of The NASDAQ Capital Market; and
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any
statements regarding future economic conditions or performance and any statement of assumptions underlying any of the foregoing.
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In
some cases, you can identify forward-looking statements by terminology such as “expect,” “anticipate,”
“estimate,” “continue,” “plan,” “believe,” “could,” “intend,”
“predict,” “may,” “should,” “will,” “would” and words of similar import
regarding our expectations. Forward-looking statements are only predictions. Actual events or results may differ materially. Although
we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our industry, business
and operations, we cannot guarantee that actual results will not differ materially from our expectations. In evaluating such forward-looking
statements, you should specifically consider various factors, including the risks outlined under “Risk Factors” contained
in this prospectus and any related free writing prospectus, and in our most recent Annual Report on Form 10-K and our most recent
filed Quarterly Reports on Form 10-Q, as well as any amendments thereto reflected in subsequent filings with the SEC. The discussion
of risks and uncertainties set forth in those filings is not necessarily a complete or exhaustive list of all risks facing us
at any particular point in time. We operate in a highly competitive, highly regulated and rapidly changing environment, and our
business is in a state of evolution. Therefore, it is likely that new risks will emerge and the nature and elements of existing
risks will change. It is not possible for management to predict all such risk factors or changes therein or to assess either the
impact of all such risk factors on our business or the extent to which any individual risk factor, combination of factors or new
or altered factors may cause results to differ materially from those contained in any forward-looking statement. Forward-looking
statements represent our estimates and assumptions only as of the date such forward-looking statements are made. You should carefully
read this prospectus supplement and any related free writing prospectus, together with the information incorporated herein or
therein by reference as described under the section titled “Information Incorporated By Reference,” and with the understanding
that our actual future results may materially differ from what we expect.
Except
as required by law, forward-looking statements speak only as of the date they are made, and we assume no obligation to update
any forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated
in any forward-looking statements, even if new information becomes available.
PROSPECTUS
SUMMARY
The
following summary highlights information contained elsewhere or incorporated by reference in this prospectus. This summary does
not contain all of the information you should consider before investing in the securities. Before making an investment decision,
you should read the entire prospectus carefully, including the matters discussed under the heading “Risk Factors”
in this prospectus.
Overview
Celsion
is a fully-integrated development stage oncology drug company focused on advancing a portfolio of innovative cancer treatments,
including directed chemotherapies, DNA-mediated immunotherapy and RNA based therapies. Our lead product candidate is ThermoDox®,
a proprietary heat-activated liposomal encapsulation of doxorubicin, currently in a Phase III clinical trial for the treatment
of primary liver cancer (the OPTIMA Study). Second in our pipeline is GEN-1, a DNA-mediated immunotherapy for the localized treatment
of ovarian and brain cancers. We have two platform technologies providing the basis for the future development of a range of therapeutics
for difficult-to-treat forms of cancer including: Lysolipid Thermally Sensitive Liposomes, a heat sensitive liposomal based dosage
form that targets disease with known therapeutics in the presence of mild heat and TheraPlas, a novel nucleic acid-based treatment
for local transfection of therapeutic plasmids. With these technologies we are working to develop and commercialize more efficient,
effective and targeted oncology therapies that maximize efficacy while minimizing side-effects common to cancer treatments.
ThermoDox®
ThermoDox®
is being evaluated in a Phase III clinical trial for primary liver cancer, which we call the OPTIMA Study, which was initiated
in 2014 and a Phase II clinical trial for recurrent chest wall breast cancer. ThermoDox® is a liposomal encapsulation of doxorubicin,
an approved and frequently used oncology drug for the treatment of a wide range of cancers. Localized heat at hyperthermia temperatures
(greater than 40° Celsius) releases the encapsulated doxorubicin from the liposome enabling high concentrations of doxorubicin
to be deposited preferentially in and around the targeted tumor.
The
OPTIMA Study
The
OPTIMA Study represents an evaluation of ThermoDox® in combination with a first line therapy, radio frequency ablation (RFA),
for newly diagnosed, intermediate stage HCC patients. HCC incidence globally is approximately 850,000 new cases per year and is
the third largest cancer indication globally. Approximately 30% of newly diagnosed patients can be addressed with RFA alone.
On
February 24, 2014, we announced that the United States Food and Drug Administration (the “FDA”), after its customary
30-day review period, provided clearance for the OPTIMA Study, which is a pivotal, double-blind, placebo-controlled Phase III
trial of ThermoDox®, in combination with standardized RFA, for the treatment of primary liver cancer. The trial design of
the OPTIMA Study is based on the comprehensive analysis of data from an earlier clinical trial called the HEAT Study, which is
described below. The OPTIMA Study is supported by a hypothesis developed from an overall survival analysis of a large subgroup
of patients from the HEAT Study.
We
initiated the OPTIMA Study in 2014. The OPTIMA Study was designed with extensive input from globally recognized hepatocellular
carcinoma (“HCC”) researchers and expert clinicians and after receiving formal written consultation from the FDA.
The OPTIMA Study is expected to enroll up to 550 patients globally at up to 70 sites in the United States, Canada, Europe Union,
China and other countries in the Asia-Pacific region, and will evaluate ThermoDox® in combination with standardized RFA, which
will require a minimum of 45 minutes across all investigators and clinical sites for treating lesions three to seven centimeters,
versus standardized RFA alone. The primary endpoint for this clinical trial is overall survival (“OS”), and the secondary
endpoints are progression free survival and safety. The statistical plan calls for two interim efficacy analyses by an independent
Data Monitoring Committee (DMC).
On
December 16, 2015, we announced that we had received the clinical trial application approval from the China Food and Drug Administration
(the “CFDA”) to conduct the OPTIMA Study in China. This clinical trial application approval will allow Celsion to
enroll patients at up to 20 clinical sites in China. On April 26, 2016, we announced that the first patient in China had been
enrolled in the OPTIMA Study. Results from the OPTIMA Study, if successful, will provide the basis for a global registration filing
and marketing approval.
On
April 9, 2018, the Company announced that the DMC for the Company’s OPTIMA Study completed its last regularly scheduled
review of the patients enrolled in the trial and has unanimously recommended that the OPTIMA Study continue according to protocol
to its final data readout. The DMC’s recommendation was based on the its assessment of safety and data integrity of the
first 75% of patients randomized in the trial as of February 5, 2018. The DMC reviewed study data at regular intervals, with the
primary responsibilities of ensuring the safety of all patients enrolled in the study, the quality of the data collected, and
the continued scientific validity of the study design. As part of its review of the first 413 patients, the DMC monitored a quality
matrix relating to the total clinical data set, confirming the timely collection of data, that all data are current as well as
other data collection and quality criteria.
On
September 5, 2018, the Company announced that it has reached its enrollment objective of 550 patients in the Phase III OPTIMA
Study.
The
HEAT Study
On
January 31, 2013, the Company announced that the HEAT Study, ThermoDox® in combination with RFA, did not meet the primary
endpoint, PFS, of a Phase III clinical trial enrolling 701 patients with primary liver cancer. This determination was made after
conferring with the HEAT Study independent DMC, that the HEAT Study did not meet the goal of demonstrating a clinically meaningful
improvement in progression free survival. In the trial, ThermoDox® was well-tolerated with no unexpected serious adverse events.
Following the announcement of the HEAT Study results, we continued to follow patients for OS, the secondary endpoint of the HEAT
Study. We have conducted a comprehensive analysis of the data from the HEAT Study to assess the future strategic value and development
strategy for ThermoDox®.
The
DIGNITY Study
On
December 14, 2015, we announced final data from our ongoing DIGNITY study, which is an open-label, dose-escalating Phase II trial
of ThermoDox® in patients with recurrent chest wall breast cancer. The DIGNITY Study was designed to establish a safe therapeutic
dose in Phase I, and to demonstrate local control in Phase II, including complete and partial responses, and stable disease as
its primary endpoint. The DIGNITY Study was also designed to evaluate kinetics in ThermoDox® produced from more than one manufacturing
site. Of the 29 patients enrolled and treated, 21 patients were eligible for evaluation of efficacy. Approximately 62% of evaluable
patients experienced a local response, including six complete responses and seven partial responses.
Acquisition
of EGEN Assets
On
June 20, 2014, we completed the acquisition of substantially all of the assets of EGEN, Inc., an Alabama corporation, which has
changed its company name to EGWU, Inc. after the closing of the acquisition (“EGEN”), pursuant to an asset purchase
agreement dated as of June 6, 2014, by and between EGEN and Celsion (the “Asset Purchase Agreement”). We acquired
all of EGEN’s right, title and interest in and to substantially all of the assets of EGEN, including cash and cash equivalents,
patents, trademarks and other intellectual property rights, clinical data, certain contracts, licenses and permits, equipment,
furniture, office equipment, furnishings, supplies and other tangible personal property. In addition, CLSN Laboratories assumed
certain specified liabilities of EGEN, including the liabilities arising out of the acquired contracts and other assets relating
to periods after the closing date. The total purchase price for the asset acquisition is up to $44.4 million, including potential
future earnout payments of up to $30.4 million contingent upon achievement of certain earnout milestones set forth in the Asset
Purchase Agreement. At the closing, we paid approximately $3.0 million in cash after the expense adjustment and issued 193,728
shares of our common stock to EGEN. The shares of common stock were issued in a private transaction exempt from registration under
the Securities Act, pursuant to Section 4(2) thereof. In addition, the Company held back 47,862 shares of common stock issuable
to EGEN pending satisfactory resolution of any post-closing adjustments of expenses and EGEN’s indemnification obligations
under the EGEN Purchase Agreement (Holdback Shares). These shares were issued on June 16, 2017.
After
its review in 2016, management concluded that there was no immediate opportunity to out-license TheraSilence. As a result of this
analysis, the earnout payments were adjusted prior to 2017 and are now up to $24.4 million that may become payable, in cash, shares
of our common stock or a combination thereof, at our option, upon achievement of two major milestone events as follows:
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$12.4
million will become payable upon achieving certain specified development milestones relating to an ovarian cancer study of
GEN-1 (formerly known as EGEN-001) to be conducted by us or our subsidiary; and
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$12.0
million will become payable upon achieving certain specified development milestones relating to a GEN-1 glioblastoma multiforme
brain cancer study to be conducted by us or our subsidiary.
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Our
obligations to make the earnout payments will terminate on the seventh anniversary of the closing date. In the acquisition, we
purchased GEN-1, a DNA-based immunotherapy for the localized treatment of ovarian and brain cancers, and two platform technologies
for the development of treatments for those suffering with difficult-to-treat forms of cancer, novel nucleic acid-based immunotherapies
and other anti-cancer DNA or RNA therapies, including TheraPlas and TheraSilence.
GEN-I
In
February 2015, we announced that the FDA accepted, without objection, the Phase I dose-escalation clinical trial of GEN-1 in combination
with the standard of care in neo-adjuvant ovarian cancer (the OVATION Study). On September 30, 2015, we announced enrollment of
the first patient in the OVATION Study. The OVATION Study is designed to (i) to identify a safe, tolerable and potentially therapeutically
active dose of GEN-1 by recruiting and maximizing an immune response and (ii) to enroll three to six patients per dose level and
will evaluate safety and efficacy and attempt to define an optimal dose for a follow-on Phase I/II study. In addition, the OVATION
Study establishes a unique opportunity to assess how cytokine-based compounds such as GEN-1, directly affect ovarian cancer cells
and the tumor microenvironment in newly diagnosed patients. The study is designed to characterize the nature of the immune response
triggered by GEN-1 at various levels of the patients’ immune system, including:
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Infiltration
of cancer fighting T-cell lymphocytes into primary tumor and tumor microenvironment including peritoneal cavity, which is
the primary site of metastasis of ovarian cancer;
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Changes
in local and systemic levels of immuno-stimulatory and immunosuppressive cytokines associated with tumor suppression and growth,
respectively; and
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profile of a comprehensive panel of immune related genes in pre-treatment and GEN-1-treated tumor tissue.
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We
initiated the OVATION Study at four clinical sites at the University of Alabama at Birmingham, Oklahoma University Medical Center,
Washington University in St. Louis and the Medical College of Wisconsin. During 2016 and 2017, we announced data from the first
fourteen patients in the OVATION Study, who completed treatment.
On
October 3, 2017, we announced final clinical and translational research data from the OVATION Study, a Phase Ib dose escalating
clinical trial combining GEN-1 with the standard of care for the treatment of newly-diagnosed patients with advanced Stage III/IV
ovarian cancer who will undergo neoadjuvant chemotherapy followed by interval debulking surgery.
GEN-1
OVATION II Study.
The
Company held an Advisory Board Meeting on September 27, 2017 with the clinical investigators and scientific experts including
those from Roswell Park Cancer Institute, Vanderbilt University Medical School, and M.D. Anderson Cancer Center to review and
finalize clinical, translational research and safety data from the Phase IB OVATION Study in order to determine the next steps
forward for our GEN-1 immunotherapy program.
On
November 13, 2017, the Company filed its Phase I/II clinical trial protocol with the U.S. Food and Drug Administration for GEN-1
for the localized treatment of ovarian cancer. The protocol is designed with a single dose escalation phase to 100 mg/m²
to identify a safe and tolerable dose of GEN-1 while maximizing an immune response. The 12 patient Phase I portion of the study
will be followed by a continuation at the selected dose in up to 118 patient randomized Phase II study. GEN-1 has demonstrated
positive safety and efficacy data in the recently completed dose escalation Phase IB trial in combination with neoadjuvant chemotherapy.
TheraPlas
Technology Platform
TheraPlas
is a technology platform for the delivery of DNA and messenger RNA (“mRNA”) therapeutics via synthetic non-viral carriers
and is capable of providing cell transfection for double-stranded DNA plasmids and large therapeutic RNA segments such as mRNA.
There are two components of the TheraPlas system, a plasmid DNA or mRNA payload encoding a therapeutic protein and a delivery
system. The delivery system is designed to protect the DNA/RNA from degradation and promote trafficking into cells and through
intracellular compartments. We designed the delivery system of TheraPlas by chemically modifying the low molecular weight polymer
to improve its gene transfer activity without increasing toxicity. We believe TheraPlas is a viable alternative to current approaches
to gene delivery due to several distinguishing characteristics, including enhanced molecular versatility that allows for complex
modifications to improve activity and safety.
Technology
Development and Licensing Agreements.
Our
current efforts and resources are applied on the development and commercialization of cancer drugs including tumor-targeting chemotherapy
treatments using focused heat energy in combination with heat-activated drug delivery systems, immunotherapies and RNA-based therapies.
On
August 8, 2016, we signed a Technology Transfer, Manufacturing and Commercial Supply Agreement (the “GEN-1 Agreement”)
with Zhejiang Hisun Pharmaceutical Co. Ltd. (Hisun) to pursue an expanded partnership for the technology transfer relating to
the clinical and commercial manufacture and supply of GEN-1, Celsion’s proprietary gene mediated, IL-12 immunotherapy, for
the greater China territory, with the option to expand into other countries in the rest of the world after all necessary regulatory
approvals are obtained. The GEN-1 Agreement will help to support supply for both ongoing and planned clinical studies in the United
States, and for potential future studies of GEN-1 in China. GEN-1 is currently being evaluated by Celsion in first line ovarian
cancer patients.
In
June 2012, Celsion and Hisun signed a long-term commercial supply agreement for the production of ThermoDox®. Hisun is one
the largest manufacturers of chemotherapy agents globally, including doxorubicin. In July 2013, the ThermoDox® collaboration
was expanded to focus on next generation liposomal formulation development with the goal of creating safer, more efficacious versions
of marketed cancer chemotherapeutics. During 2015, Hisun successfully completed the manufacture of three registration batches
for ThermoDox® and has obtained regulatory approvals to supply ThermoDox® to participating clinical trial sites in all
of the countries of South East Asia, Europe and North America, as well as to the European Union countries allowing for early access
to ThermoDox®. The future manufacturing of clinical and commercial supplies by Hisun will result in a cost structure allowing
Celsion to profitably access all global markets, including third world countries, and help accelerate the Company’s product
development program in China for ThermoDox® in primary liver cancer and other approved indications.
Business
Strategy
We
have not generated and do not expect to generate any revenue from product sales in the next several years, if at all. An element
of our business strategy has been to pursue, as resources permit, the research and development of a range of product candidates
for a variety of indications. We may also evaluate licensing cancer products from third parties for cancer treatments to expand
our current product pipeline. This is intended to allow us to diversify the risks associated with our research and development
expenditures. To the extent we are unable to maintain a broad range of product candidates, our dependence on the success of one
or a few product candidates would increase and results such as those announced in relation to the HEAT study on January 31, 2013
will have a more significant impact on our financial prospects, financial condition and market value. We may also consider and
evaluate strategic alternatives, including investment in, or acquisition of, complementary businesses, technologies or products.
As demonstrated by the HEAT Study results, drug research and development is an inherently uncertain process and there is a high
risk of failure at every stage prior to approval. The timing and the outcome of clinical results are extremely difficult to predict.
The success or failure of any preclinical development and clinical trial can have a disproportionately positive or negative impact
on our results of operations, financial condition, prospects and market value.
Our
current business strategy includes the possibility of entering into collaborative arrangements with third parties to complete
the development and commercialization of our product candidates. In the event that third parties take over the clinical trial
process for one or more of our product candidates, the estimated completion date would largely be under the control of that third
party rather than us. We cannot forecast with any degree of certainty which proprietary products or indications, if any, will
be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our development plan
or capital requirements. We may also apply for subsidies, grants or government or agency-sponsored studies that could reduce our
development costs.
As
a result of the uncertainties discussed above, among others, we are unable to estimate the duration and completion costs of our
research and development projects or when, if ever, and to what extent we will receive cash inflows from the commercialization
and sale of a product. Our inability to complete our research and development projects in a timely manner or to obtain positive
results in our clinical trials, as well as any failure to enter into collaborative agreements when appropriate, could significantly
increase our capital requirements and could adversely impact our liquidity. While our estimated future capital requirements are
uncertain and could increase or decrease as a result of many factors, including the extent to which we choose to advance our research,
development and clinical trials or whether we are in a position to pursue manufacturing or commercialization activities, it is
clear we will need significant additional capital to develop our product candidates through clinical development, manufacturing
and commercialization. We do not know whether we will be able to access additional capital when needed or on terms favorable to
us or our stockholders. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize
the future success of our business.
Corporate
Information
We
were founded in 1982 and are a Delaware corporation. Our shares of common stock trade on The NASDAQ Capital Market under the symbol
“CLSN.” Our principal executive offices are located at 997 Lenox Drive, Suite 100, Lawrenceville, New Jersey 08648.
Our telephone number is (609) 896-9100 and our website is www.celsion.com. The information available on or through our website
is not part of or incorporated by reference into, this prospectus and should not be relied upon.
Horizon
Loan Agreement
On
June 27, 2018, the Company issued warrants (the “Warrants”) exercisable for a total of 190,114 shares of common stock
to Horizon Technology Finance Corporation (“Horizon”) in connection with the loan agreement entered into by and between
Celsion and Horizon. The Warrants are immediately exercisable, at a per share exercise price of $2.63, for cash or by net exercise
from the date of grant and will expire after ten years from the date of grant.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should carefully consider and evaluate all of the information contained
in this prospectus, any accompanying prospectus supplement and in the documents incorporated by reference in this prospectus and
any accompanying prospectus supplement before you decide to purchase our securities. In particular, you should carefully consider
and evaluate the risks and uncertainties described in “Part I - Item 1A. Risk Factors” of our most recent Annual Report
on Form 10-K, as updated by the additional risks and uncertainties set forth in our most recent Quarterly Report on Form 10-Q
and in other filings we make with the SEC, as well as the risks and uncertainties described under the heading “Risk Factors”
contained in the applicable prospectus supplement or in any other document incorporated by reference into this prospectus. Any
of the risks and uncertainties set forth therein could materially and adversely affect our business, results of operations and
financial condition, which in turn could materially and adversely affect the trading price or value of our securities. As a result,
you could lose all or part of your investment.
USE
OF PROCEEDS
Unless
otherwise indicated in a prospectus supplement, we currently intend to use the net proceeds from the sale of the securities offered
hereby for general corporate purposes, which may include the further research and development, clinical trials, manufacture and
commercialization of our lead product candidate, ThermoDox
®
, and other products, including GEN-1, and to fund research
and development of our technologies, working capital, repaying, redeeming or repurchasing debt, capital expenditures and other
general corporate purposes. We may also use a portion of the net proceeds to acquire or invest in businesses, products and technologies
that are complementary to our own, as well as for capital expenditures. We have not specifically allocated the proceeds to those
purposes as of the date of this prospectus. Pending these uses, we expect to invest the net proceeds in short-term, interest-bearing
instruments or other investment-grade securities, certificates of deposits or short-term U.S. government securities. The precise
amount and timing of the application of proceeds from the sale of securities will depend on our funding requirements and the availability
and cost of other funds at the time of sale. Allocation of proceeds of a particular series of securities, or the principal reason
for the offering if no allocation has been made, will be described in the applicable prospectus supplement or in any related free
writing prospectus.
We
will not receive any proceeds from the resale of shares of our common stock by the selling stockholder however, we will receive
proceeds of approximately $500,000 if all of the Warrants for which the underlying shares are being registered herein are exercised.
We expect to use any proceeds from the exercise of these warrants for capital expenditures, working capital and other general
corporate purposes.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our common stock and do not currently anticipate declaring or paying cash dividends
on our common stock in the foreseeable future. We currently intend to retain all of our future earnings, if any, to finance operations.
Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend
on a number of factors, including future earnings, capital requirements, financial conditions, future prospects, contractual restrictions
and other factors that our board of directors may deem relevant.
GENERAL
DESCRIPTION OF SECURITIES
We
may offer shares of common or preferred stock, various series of debt securities, warrants or other rights to purchase common
stock or preferred stock, or units consisting of combinations of the foregoing, in each case from time to time under this prospectus,
together with any applicable prospectus supplement, at prices and on terms to be determined by market conditions at the time of
offering. This prospectus provides you with a general description of the securities we may offer. At the time we offer a type
or series of securities, we will provide a prospectus supplement describing the specific amounts, prices and other important terms
of the securities, including, to the extent applicable:
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or classification;
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aggregate
principal amount or aggregate offering price;
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voting
or other rights;
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rates
and times of payment of interest, dividends or other payments;
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original
issue discount;
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maturity;
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ranking;
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restrictive
covenants;
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redemption,
conversion, exercise, exchange, settlement or sinking fund terms, including prices or rates, and any provisions for changes
to or adjustments in such prices or rates and in the securities or other property receivable upon conversion, exercise, exchange
or settlement;
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any
securities exchange or market listing arrangements; and
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important
U.S. federal income tax considerations.
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This
prospectus may not be used to offer or sell securities unless accompanied by a prospectus supplement. The prospectus supplement
may add, update or change information contained in this prospectus or in documents incorporated by reference in this prospectus.
We urge you to read the prospectus supplement related to any securities being offered.
We
may sell the securities directly to or through underwriters, dealers or agents. We and our underwriters, dealers or agents reserve
the right to accept or reject all or part of any proposed purchase of securities. If we do offer securities through underwriters
or agents, we will include in the applicable prospectus supplement (a) the names of the underwriters or agents and applicable
fees, discounts and commissions to be paid to them, (b) details regarding over-allotment options, if any, and (c) net proceeds
to us.
The
following descriptions are not complete and may not contain all the information you should consider before investing in any securities
we may offer hereunder; they are summarized from, and qualified by reference to, our amended and restated certificate of incorporation,
bylaws and the other documents referred to in the descriptions, all of which are or will be publicly filed with the SEC, as applicable.
See “Where You Can Find More Information.”
DESCRIPTION
OF CAPITAL STOCK
General
Our
authorized capital stock consists of 112,500,000 shares of common stock, $0.01 par value per share, and 100,000 shares of preferred
stock, $0.01 par value per share. As of September 27, 2018, there were 17,911,120 shares of our common stock outstanding
and no shares of preferred stock outstanding.
The
following summary description of our capital stock is based on the applicable provisions of the Delaware General Corporation Law,
as amended (DGCL), the provisions of our certificate of incorporation, as amended (our certificate of incorporation), and our
bylaws, as amended (our bylaws). This information is qualified entirely by reference to the applicable provisions of the DGCL,
our certificate of incorporation and bylaws. For information on how to obtain copies of our certificate of incorporation and bylaws,
which are exhibits to the registration statement of which this prospectus is a part, see the section titled “Where You Can
Find Additional Information” in this prospectus.
Common
Stock
Holders
of common stock to be registered hereunder are entitled to one vote for each share held of record on all matters submitted to
a vote of stockholders and do not have cumulative voting rights. Subject to any preferential rights of any outstanding preferred
stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by
our board of directors out of funds legally available therefor. In the event of a dissolution, liquidation or winding-up of the
Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and any preferential
rights of any outstanding preferred stock.
Holders
of common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to our common stock. All outstanding shares of common stock are fully paid and non-assessable. The rights,
preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which may be designated and issued in the future.
Preferred
Stock
Pursuant
to our certificate of incorporation, our board of directors has the authority, without further action by the stockholders (unless
such stockholder action is required by applicable law or NASDAQ rules), to designate and issue shares of preferred stock in one
or more series, to establish from time to time the number of shares to be included in each such series, to fix the designations,
powers (including voting), privileges, preferences and relative participating, optional or other rights, if any, of the shares
of each such series and the qualifications, limitations or restrictions thereof and to increase or decrease the number of shares
of any such series, but not below the number of shares of such series then outstanding.
We
will fix the designations, powers (including voting), privileges, preferences and relative participating, optional or other rights,
if any, of the preferred stock of each series, as well as the qualifications, limitations or restrictions thereof, in the certificate
of designation relating to that series. We will file as an exhibit to the registration statement of which this prospectus is a
part, or will incorporate by reference from reports that we file with the SEC, the form of any certificate of designation that
describes the terms of the series of preferred stock we are offering before the issuance of that series of preferred stock. This
description will include:
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title and stated value;
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number of shares we are offering;
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liquidation preference per share;
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purchase price;
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the
dividend rate, period and payment date and method of calculation for dividends;
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whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
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procedures for any auction or remarketing, if any;
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provisions for a sinking fund, if any;
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provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and
repurchase rights;
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any
listing of the preferred stock on any securities exchange or market;
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whether
the preferred stock will be convertible into or exchangeable for other securities and, if applicable, the conversion price,
or how it will be calculated, and the conversion period;
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voting
rights, if any, of the preferred stock;
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preemptive
rights, if any;
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restrictions
on transfer, sale or other assignment, if any;
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liability
as to further calls or to assessment by the Company, if any;
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discussion of any material United States federal income tax considerations applicable to the preferred stock;
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relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind
up our affairs;
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limitations on the issuance of any class or series of preferred stock ranking senior to or on a parity with the series of
preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and
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other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock.
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DGCL provides that the holders of preferred stock will have the right to vote separately as a class or, in some cases, as a series
on an amendment to our certificate of incorporation if the amendment would change the par value or, unless our certificate of
incorporation provides otherwise, the number of authorized shares of the class or the powers, preferences or special rights of
the class or series so as to adversely affect the class or series, as the case may be. This right is in addition to any voting
rights that may be provided in the applicable certificate of designation.
Our
board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect
the voting power or other rights of the holders of our common stock or other securities. Preferred stock could be issued quickly
with terms designed to delay or prevent a change in control of our company or make removal of management more difficult. Additionally,
the issuance of preferred stock may have the effect of decreasing the market price of our common stock.
Anti-Takeover
Considerations and Special Provisions of Our Certificate of Incorporation, Our Bylaws and the Delaware General Corporation Law
Certificate
of Incorporation and Bylaws
A
number of provisions of our certificate of incorporation and bylaws concern matters of corporate governance and the rights of
our stockholders. Provisions that grant our board of directors the ability to issue shares of preferred stock and to set the voting
rights, preferences and other terms thereof may discourage takeover attempts that are not first approved by our board of directors,
including takeovers that may be considered by some stockholders to be in their best interests, such as those attempts that might
result in a premium over the market price for the shares held by stockholders. Certain provisions could delay or impede the removal
of incumbent directors even if such removal would be beneficial to our stockholders, such as the classification of our board of
directors and the lack of cumulative voting. Since our board of directors has the power to retain and discharge our officers,
these provisions could also make it more difficult for existing stockholders or another party to effect a change in management.
These
provisions may have the effect of deterring hostile takeovers or delaying changes in our control or in our management. These provisions
are intended to enhance the likelihood of continued stability in the composition of our board of directors and in the policies
they implement and to discourage certain types of transactions that may involve an actual or threatened change of our control.
These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended
to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging
others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price
of our shares that could result from actual or rumored takeover attempts.
These
provisions also could discourage or make more difficult a merger, tender offer or proxy contest, even if they could be favorable
to the interests of stockholders, and could potentially depress the market price of our common stock. Our board of directors believes
that these provisions are appropriate to protect our interests and the interests of our stockholders.
Classification
of Board; No Cumulative Voting.
Our certificate of incorporation and bylaws provide for our board of directors to be divided
into three classes, with staggered three-year terms. Only one class of directors is elected at each annual meeting of our stockholders,
with the other classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have
cumulative voting rights, our stockholders representing a majority of the shares of common stock outstanding will be able to elect
all of our directors due to be elected at each annual meeting of our stockholders.
Meetings
of and Actions by Stockholders.
Our bylaws provide that annual meetings of our stockholders may take place at the time and
place designated by our board of directors. A special meeting of our stockholders may be called at any time by our board of directors,
the chairman of our board of directors or the president. Our bylaws provide that (i) our board of directors can fix separate record
dates for determining stockholders entitled to receive notice of a stockholder meeting and for determining stockholders entitled
to vote at the meeting; (ii) we may hold a stockholder meeting by means of remote communications; (iii) any stockholder seeking
to have the stockholders authorize or take corporate action by written consent shall, by written notice to the secretary of the
Company, request that the board fix a record date and the board shall adopt a resolution fixing the record date in all events
within ten calendar days after a request is received; and (iv) a written consent of stockholders shall not be effective unless
a written consent signed by a sufficient number of stockholders to take such action is received by us within 60 calendar days
of the earliest dated written consent received.
Advance
Notice Requirements for Stockholder Proposals and Director Nominations.
Our bylaws provide that stockholders seeking to bring
business before an annual meeting of stockholders or to nominate candidates for election as directors at an annual meeting of
stockholders must provide timely notice in writing. To be timely, a stockholder’s notice must be delivered to, or mailed
and received by, the secretary of the Company at our principal executive offices not later than the close of business on the 90th
calendar day, nor earlier than the close of business on the 120th calendar day in advance of the date specified in the Company’s
proxy statement released to stockholders in connection with the previous year’s annual meeting of stockholders. If the date
of the annual meeting is more than 30 calendar days before or after such anniversary date, notice by the stockholder to be timely
must be so not earlier than the close of business on the 120th calendar day in advance of such date of annual meeting and not
later than the close of business on the later of the 90th calendar day in advance of such date of annual meeting or the tenth
calendar day following the date on which public announcement of the date of the meeting is made. In no event shall the public
announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for
the giving of an advance notice by any stockholder. Any stockholder that proposes director nominations or other business must
be a stockholder of record at the time the advance notice is delivered by such stockholder to us and entitled to vote at the meeting.
Our bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions may preclude
stockholders from bringing matters before an annual meeting of stockholders or from making nominations for the election of directors
at an annual meeting of stockholders. Unless otherwise required by law, any director nomination or other business shall not be
made or transacted if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present
the director nominee or other proposed business.
Filling
of Board Vacancies.
Our certificate of incorporation and bylaws provide that the authorized size of our board of directors
shall be determined by the board by board resolution from time to time and that our board of directors has the exclusive power
to fill any vacancies and newly created directorships resulting from any increase in the authorized number of directors and the
stockholders do not have the power to fill such vacancies. Vacancies in our board of directors and newly created directorships
resulting from any increase in the authorized number of directors on our board of directors may be filled by a majority of the
directors remaining in office, even though that number may be less than a quorum of our board of directors, or by a sole remaining
director. A director so elected to fill a vacancy shall serve for the remaining term of the predecessor he or she replaced and
until his or her successor is elected and has qualified, or until his or her earlier resignation, removal or death.
Amendment
of the Certificate of Incorporation.
Our certificate of incorporation may be amended, altered, changed or repealed at a meeting
of our stockholders entitled to vote thereon by the affirmative vote of a majority of the outstanding stock entitled to vote thereon
and a majority of the outstanding stock of each class entitled to vote thereon as a class, in the manner prescribed by the DGCL.
Amendment
of the Bylaws.
Our bylaws may be amended or repealed, or new bylaws may be adopted, by either our board of directors or the
affirmative vote of at least 66 2/3 percent of the voting power of our outstanding shares of capital stock.
Section
203 of the Delaware General Corporation Law
We
are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with
any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder,
with the following exceptions:
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before
such date, the board of directors of the corporation approved either the business combination or the transaction that resulted
in the stockholder becoming an interested stockholder;
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upon
completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85 percent of the voting stock of the corporation outstanding at the time the transaction began, excluding
for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder)
those shares owned (i) by persons who are directors and also officers and (ii) pursuant to employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in
a tender or exchange offer; and
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on
or after such date, the business combination is approved by the board of directors and authorized at an annual or special
meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3 percent of the outstanding
voting stock that is not owned by the interested stockholder.
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In
general, Section 203 defines a business combination to include the following:
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any
merger or consolidation involving the corporation and the interested stockholder;
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any
sale, lease, transfer, pledge or other disposition of ten percent or more of the assets of the corporation to or with the
interested stockholder;
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subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder;
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any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class
or series of the corporation beneficially owned by the interested stockholder; and
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the
receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial benefits
by or through the corporation.
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In
general, Section 203 of the DGCL defines an “interested stockholder” as an entity or person who, together with the
entity’s or person’s affiliates and associates, beneficially owns, or is an affiliate of the corporation and within
three years prior to the time of determination of interested stockholder status did own, 15 percent or more of the outstanding
voting stock of the corporation.
A
Delaware corporation may “opt out” of these provisions with an express provision in its certificate of incorporation.
We have not opted out of these provisions, which may as a result, discourage or prevent mergers or other takeover or change of
control attempts of us.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC (AST), located at 6201 15th
Avenue, Brooklyn, New York 11219. AST’s phone number is (800) 937-5449.
NASDAQ
Capital Market Listing
Our
common stock is listed on The NASDAQ Capital Market under the symbol “CLSN.”
DESCRIPTION
OF DEBT SECURITIES
We
may issue debt securities from time to time, in one or more series, as senior, subordinated or junior subordinated, convertible
or non-convertible and secured or unsecured debt. Any senior debt securities will rank equally with any unsubordinated debt. Subordinated
debt securities will rank equally with any other subordinated debt of the same ranking we may issue. Convertible debt securities
will be convertible into or exchangeable for our common stock or other securities at predetermined conversion rates, and conversion
may be mandatory or at the holder’s option.
Debt
securities will be issued under one or more indentures-contracts between us and a national banking association or other eligible
party acting as trustee. Following is a summary of certain general features of debt securities we may issue; we will describe
the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement, which may
differ from the terms we describe below. You should read the prospectus supplements, any free writing prospectus we may authorize
and the indentures, supplemental indentures and forms of debt securities relating to any series of debt securities we may offer.
General
.
Except as we may otherwise provide in a prospectus supplement, the relevant indenture will provide that debt securities may be
issued from time to time in one or more series. The indenture will not limit the amount of debt securities that may be issued
thereunder and will provide that the specific terms of any series of debt securities shall be set forth in, or determined pursuant
to, an authorizing resolution, an officers’ certificate or a supplemental indenture, if any, relating to such series.
We
will describe in each prospectus supplement the following terms relating to any series of debt securities:
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the
title or designation;
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whether
they will be secured or unsecured, and the terms of any security;
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whether
the debt securities will be subject to subordination, and any terms thereof;
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any
limit upon the aggregate principal amount;
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the
date or dates on which the debt securities may be issued and on which we will pay the principal;
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the
interest rate, which may be fixed or variable, or the method for determining the rate, the date interest will begin to accrue,
the date or dates interest will be payable and the record dates for interest payment dates or the method for determining them;
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the
manner in which the amounts of payment of principal of, premium or interest on the debt securities will be determined, if
these amounts may be determined by reference to an index based on a currency or currencies other than that in which the debt
securities are denominated or designated to be payable or by reference to a commodity, commodity index, stock exchange index
or financial index;
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the
currency of denomination;
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if
payments of principal of, premium or interest will be made in one or more currencies or currency units other than that or
those in which the debt securities are denominated, the manner in which the exchange rate with respect to these payments will
be determined;
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the
place or places where the principal of, premium, and interest will be payable, where debt securities of any series may be
presented for registration of transfer, exchange or conversion, and where notices and demands to or upon the Company in respect
of the debt securities may be made;
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the
form of consideration in which principal of, premium or interest will be paid;
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the
terms and conditions upon which we may redeem the debt securities;
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any
obligation we have to redeem or purchase the debt securities pursuant to any sinking fund, amortization or analogous provisions
or at the option of a holder;
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the
dates on which and the price or prices at which we will repurchase the debt securities at the option of holders and other
detailed terms and provisions of these obligations;
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the
denominations in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple
thereof;
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the
portion of principal amount payable upon declaration of acceleration of the maturity date, if other than the principal amount;
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whether
the debt securities are to be issued at any original issuance discount and the amount of discount with which they may be issued;
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whether
the debt securities will be issued in certificated or global form and, in such case, the depositary and the terms and conditions,
if any, upon which interests in such global security or securities may be exchanged in whole or in part for the individual
securities represented thereby;
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provisions,
if any, for defeasance in whole or in part and any addition or change to provisions related to satisfaction and discharge;
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the
form of the debt securities;
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the
terms and conditions upon which convertible debt securities will be convertible or exchangeable into securities or property
of the Company or another person, if at all, and any additions or changes, if any, to permit or facilitate the same;
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provisions,
if any, granting special rights to holders upon the occurrence of specified events;
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any
restriction or condition on transferability;
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any
addition or change in the provisions related to compensation and reimbursement of the trustee;
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any
addition to or change in the events of default described in this prospectus or in the indenture and any change in the acceleration
provisions so described;
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whether
the debt securities will restrict our ability to pay dividends, or will require us to maintain any asset ratios or reserves;
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whether
we will be restricted from incurring any additional indebtedness;
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any
addition to or change in the covenants described in this prospectus or in the indenture, including terms of any restrictive
covenants; and
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any
other terms which may modify or delete any provision of the indenture.
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We
may issue debt securities that provide for an amount less than their stated principal amount to be due and payable upon declaration
of acceleration of their maturity pursuant to the terms of the indenture. We will provide you with information on the U.S. federal
income tax considerations and other special considerations applicable to any debt securities in the applicable prospectus supplement.
Conversion
or Exchange Rights
. We will set forth in the prospectus supplement the terms, if any, on which a series of debt securities
may be convertible into or exchangeable for our common stock or other securities. We will include provisions as to whether conversion
or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number
of shares of our common stock or other securities that the holders of debt securities receive would be subject to adjustment.
Consolidation,
Merger or Sale
;
No Protection in Event of a Change of Control or Highly Leveraged Transaction
. Except as we may otherwise
provide in a prospectus supplement, the indenture will provide that we may not merge or consolidate with or into another entity,
or sell other than for cash or lease all or substantially all our assets to another entity, or purchase all or substantially all
the assets of another entity unless we are the surviving entity or, if we are not the surviving entity, the successor, transferee
or lessee entity expressly assumes all of our obligations under the indenture or the debt securities, as appropriate.
Unless
we state otherwise in the applicable prospectus supplement, the debt securities will not contain any provisions that may afford
holders additional protection in the event we have a change of control or in the event of a highly leveraged transaction (whether
or not such transaction results in a change of control), which could adversely affect them.
Events
of Default Under the Indenture
. Except as we may otherwise provide in a prospectus supplement, the following will be events
of default under the indenture with respect to any series of debt securities that we may issue:
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if
we fail to pay interest when due and our failure continues for 90 days and the time for payment has not been extended or deferred;
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if
we fail to pay the principal, or premium, if any, when due whether by maturity or called for redemption;
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if
we fail to pay a sinking fund installment, if any, when due and our failure continues for 30 days;
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if
we fail to observe or perform any other covenant relating to the debt securities, other than a covenant specifically relating
to and for the benefit of holders of another series of debt securities, and our failure continues for 90 days after we receive
written notice from the debenture trustee or holders of not less than a majority in aggregate principal amount of the outstanding
series; and
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if
specified events of bankruptcy, insolvency or reorganization occur as to the Company.
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No
event of default with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency
or reorganization) will necessarily constitute an event of default with respect to any other series. The occurrence of an event
of default may constitute an event of default under any bank credit agreements we may have in existence from time to time. In
addition, the occurrence of certain events of default or an acceleration under the indenture may constitute an event of default
under certain of our other indebtedness outstanding from time to time.
Except
as we may otherwise provide in a prospectus supplement, if an event of default with respect to debt securities of any series at
the time outstanding occurs and is continuing, then the trustee or the holders of not less than a majority in principal amount
of the outstanding series may, by a notice in writing to us (and to the debenture trustee if given by the holders), declare to
be due and payable immediately the principal (or, if the debt securities are discount securities, that portion of the principal
amount as may be specified in the terms of such securities) of and premium and accrued and unpaid interest, if any, on all such
debt securities. Before a judgment or decree for payment of the money due has been obtained with respect to any series, the holders
of a majority in principal amount of that series (or, at a meeting of holders at which a quorum is present, the holders of a majority
in principal amount represented at such meeting) may rescind and annul the acceleration if all events of default, other than the
non-payment of accelerated principal, premium, if any, and interest, if any, have been cured or waived as provided in the applicable
indenture (including payments or deposits in respect of principal, premium or interest that had become due other than as a result
of such acceleration) and the Company has deposited with the indenture trustee or paying agent a sum sufficient to pay all amounts
owed to the indenture trustee under the indenture, all arrears of interest, if any, and the principal and premium, if any, on
the debt securities that have become due other than by such acceleration. We refer you to the relevant prospectus supplement relating
to any discount securities for the particular provisions relating to acceleration of a portion of the principal amount thereof
upon the occurrence of an event of default.
Subject
to the terms of the indenture, and except as we may otherwise provide in a prospectus supplement, if an event of default under
the indenture shall occur and be continuing, the debenture trustee will be under no obligation to exercise any of its rights or
powers under such indenture at the request or direction of any of the holders of the applicable series, unless such holders have
offered the debenture trustee reasonable indemnity. The holders of a majority in principal amount of any series will have the
right to direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee, or
exercising any trust or power conferred on the debenture trustee, with respect to that series, provided that, subject to the terms
of the indenture, the debenture trustee need not take any action that it believes, upon the advice of counsel, might involve it
in personal liability or might be unduly prejudicial to holders not involved in the proceeding.
Except
as we may otherwise provide in a prospectus supplement, a holder of the debt securities of any series will only have the right
to institute a proceeding under the indenture or to appoint a receiver or trustee, or to seek other remedies if:
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the
holder previously has given written notice to the debenture trustee of a continuing event of default with respect to that
series;
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the
holders of at least a majority in aggregate principal amount outstanding of that series have made written request, and such
holders have offered reasonable indemnity to the debenture trustee to institute the proceeding as trustee; and
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the
debenture trustee does not institute the proceeding and does not receive from the holders of a majority in aggregate principal
amount outstanding of that series (or at a meeting of holders at which a quorum is present, the holders of a majority in principal
amount of such series represented at such meeting) other conflicting directions within 60 days after the notice, request and
offer.
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Except
as we may otherwise provide in a prospectus supplement, these limitations will not apply to a suit instituted by a holder of debt
securities if we default in the payment of the principal, premium, if any, or interest on, them.
We
will periodically file statements with the applicable debenture trustee regarding our compliance with specified covenants in the
applicable indenture.
Modification
of Indenture; Waiver
. Except as we may otherwise provide in a prospectus supplement, the debenture trustee and the Company
may, without the consent of any holders, execute a supplemental indenture to change the applicable indenture with respect to specific
matters, including, among other things:
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to
surrender any right or power conferred upon the Company;
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to
provide, change or eliminate any restrictions on payment of principal of or premium, if any; provided that any such action
shall not adversely affect the interests of the holders of debt securities of any series in any material respect;
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to
change or eliminate any of the provisions of the indenture; provided that any such change or elimination shall become effective
only when there is no outstanding debt security created prior to the execution of such supplemental indenture that is entitled
to the benefit of such provision and as to which such supplemental indenture would apply;
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to
evidence the succession of another entity to the Company;
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to
evidence and provide for the acceptance of appointment by a successor trustee with respect to one or more series of debt securities
and to add or change provisions of the indenture to facilitate the administration of the trusts thereunder by more than one
trustee;
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to
cure any ambiguity, mistake, manifest error, omission, defect or inconsistency in the indenture or to conform the text of
any provision in the indenture or in any supplemental indenture to any description thereof in the applicable section of a
prospectus, prospectus supplement or other offering document that was intended to be a verbatim recitation of a provision
of the indenture or of any supplemental indenture;
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to
add to or change or eliminate any provision of the indenture as shall be necessary or desirable in accordance with any amendments
to the U.S. Trust Indenture Act of 1939;
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to
make any change in any series of debt securities that does not adversely affect in any material respect the interests of the
holders thereof; and
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to
supplement any of the provisions of the indenture to such extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of debt securities; provided that any such action shall not adversely affect the interests of
holders of any debt securities.
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In
addition, and except as we may otherwise provide in a prospectus supplement, under the indenture the rights of holders of a series
of debt securities may be changed by us and the debenture trustee with the written consent of the holders of at least a majority
in aggregate principal amount outstanding (or, at a meeting of holders of such series at which a quorum is present, the holders
of a majority in principal amount represented at such meeting) that is affected. The debenture trustee and the Company may, however,
make the following changes only with the consent of each holder of any outstanding debt securities affected:
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extending
the fixed maturity;
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reducing
the principal amount, reducing the rate of or extending the time of payment of interest, or any premium payable upon redemption;
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reducing
the principal amount of discount securities payable upon acceleration of maturity;
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making
the principal of or premium or interest payable in currency other than that stated;
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impairing
the right to institute suit for the enforcement of any payment on or after the fixed maturity date;
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materially
adversely affecting the economic terms of any right to convert or exchange; and
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reducing
the percentage of debt securities, the holders of which are required to consent to any amendment or waiver; or modifying,
without the written consent of the trustee, the rights, duties or immunities of the trustee.
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Except
for certain specified provisions, and except as we may otherwise provide in a prospectus supplement, the holders of at least a
majority in principal amount of any series (or, at a meeting of holders of such series at which a quorum is present, the holders
of a majority in principal amount represented at such meeting) may, on behalf of the holders of all debt securities of that series,
waive our compliance with provisions of the indenture. The holders of a majority in principal amount of the outstanding debt securities
of any series may, on behalf of all such holders, waive any past default under the indenture with respect to that series and its
consequences, other than a default in the payment of the principal of, premium or any interest; provided, however, that the holders
of a majority in principal amount of the outstanding debt securities of any series may rescind an acceleration and its consequences,
including any related payment default that resulted from the acceleration.
Discharge
.
Except as we may otherwise provide in a prospectus supplement, the indenture will provide that we can elect to be discharged from
our obligations with respect to one or more series of debt securities. In order to exercise our rights to be discharged, we must
deposit with the trustee money or government obligations sufficient to pay all the principal of, the premium, if any, and interest
on, the debt securities of the affected series on the dates payments are due.
Form,
Exchange and Transfer
. Except as we may otherwise provide in a prospectus supplement, we will issue debt securities only in
fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations
of $1,000 and any integral multiple thereof. Except as we may otherwise provide in a prospectus supplement, the indenture will
provide that we may issue debt securities in temporary or permanent global form and as book-entry securities that will be deposited
with a depositary named by us and identified in a prospectus supplement with respect to that series.
At
the option of the holder, subject to the terms of the indenture and the limitations applicable to global securities described
in the applicable prospectus supplement, the holder will be able to exchange the debt securities for other debt securities of
the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject
to the terms of the indenture and the limitations applicable to global securities set forth in the applicable prospectus supplement,
holders may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer
endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the
office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities or the indenture,
we will make no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other
governmental charges.
We
will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar,
that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation
of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required
to maintain a transfer agent in each place of payment for the debt securities of each series.
Except
as we may otherwise provide in a prospectus supplement, if we elect to redeem the debt securities of any series, we will not be
required to:
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issue,
register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and
ending at the close of business on the day of the mailing; or
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register
the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion
of any debt securities we are redeeming in part.
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Information
Concerning the Debenture Trustee
. The debenture trustee, other than during the occurrence and continuance of an event of default
under the indenture, will undertake to perform only those duties as are specifically set forth in the indenture. Upon an event
of default, the debenture trustee must use the same degree of care as a prudent person would exercise or use in the conduct of
his or her own affairs. Subject to this provision, the debenture trustee will be under no obligation to exercise any of the powers
given it by the indenture at the request of any holder unless it is offered reasonable security and indemnity against the costs,
expenses and liabilities that it might incur.
Payment
and Paying Agents
. Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of interest
on any interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered
at the close of business on the regular record date for the interest.
Unless
we otherwise indicate in the applicable prospectus supplement, we will pay principal of and any premium and interest at the office
of the indenture trustee or, at the option of the Company, by check payable to the holder. Unless we otherwise indicate in a prospectus
supplement, we will designate the corporate trust office of the debenture trustee our sole paying agent for payments. We will
name in the applicable prospectus supplement any other paying agents that we initially designate. We will maintain a paying agent
in each place of payment.
All
money we pay to a paying agent or the debenture trustee for the payment of principal or any premium or interest which remains
unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and
the holder of the security thereafter may look only to us for payment thereof.
Governing
Law
. The indenture and the debt securities will be governed and construed in accordance with the laws of the State of New
York.
No
Personal Liability of Directors, Officers, Employees and Stockholders
. No incorporator, stockholder, employee, agent, officer,
director or subsidiary of ours will have any liability for any obligations of ours or, due to the creation of any indebtedness
under the debt securities, the indentures or supplemental indentures. The indentures provide that all such liability is expressly
waived and released as a condition of, and as consideration for, the execution of such indentures and the issuance of the debt
securities.
DESCRIPTION
OF WARRANTS, OTHER RIGHTS AND UNITS
We
may from time to time issue warrants or other rights (together, Rights), in one or more series, for the purchase of common stock
or preferred stock. We may issue Rights independently or together with such securities, and such Rights may be attached to or
separate from them. Rights will be evidenced by a Rights certificate issued under one or more Rights agreements between us and
a Rights agent which will act solely as our agent in connection with the Rights and will not have any obligation or relationship
of agency or trust for or with any holders or beneficial owners of Rights. We may issue securities in units (Units), each consisting
of two or more types of securities. For example, we might issue Units consisting of a combination of common stock and warrants
to purchase common stock. If we issue Units, the prospectus supplement relating to the Units will contain the information described
above with regard to each of the securities that is a component of the Units. In addition, the prospectus supplement relating
to the Units will describe the terms of any Units we issue. The forms of any such certificates and agreements will be filed as
exhibits to the registration statement of which this prospectus is a part by amendment thereof or as exhibits to a Current Report
on Form 8-K incorporated herein by reference, and the accompanying prospectus supplement and such forms may add, update or change
the terms and conditions of the Rights or Units described in this prospectus. You should read the prospectus supplements, Rights
agreements and Rights certificates that contain the terms of the Rights in their entirety.
The
particular terms of each issue of Rights or Units will be described in the applicable prospectus supplement, including, as applicable:
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the
title of the Rights or Units;
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any
initial offering price;
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the
title, aggregate principal amount or number and terms of the securities purchasable upon exercise of the Rights;
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the
principal amount or number of securities purchasable upon exercise of each Right and the price at which that principal amount
or number may be purchased upon exercise of each Right;
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the
currency or currency units in which any offering price and any exercise price are payable;
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the
title and terms of any related securities with which the Rights are issued and the number of the Rights issued with each security;
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any
date on and after which the Rights or Units and the related securities will be separately transferable;
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any
minimum or maximum number of Rights that may be exercised at any one time;
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the
date on which the right to exercise the Rights will commence and the date on which the right will expire;
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a
discussion of U.S. federal income tax, accounting or other considerations applicable to the Rights or Units;
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whether
the Rights represented by the Rights certificates, if applicable, will be issued in registered or bearer form and, if registered,
where they may be transferred and registered;
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any
anti-dilution provisions of the Rights or Units;
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any
redemption or call provisions applicable to the Rights;
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any
provisions for changes to or adjustments in the exercise price of any Rights; and
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any
additional terms of the Rights or Units, including terms, procedures and limitations relating to exchange and exercise of
the Rights or Units.
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Rights
certificates will be exchangeable for new Rights certificates of different denominations and, if in registered form, may be presented
for registration of transfer, and Rights may be exercised, at the corporate trust office of the Rights agent or any other office
indicated in the related prospectus supplement. Before the exercise of Rights, holders of Rights will not be entitled to payments
of any dividends, principal, premium or interest on securities purchasable upon exercise of the Rights, to vote, consent or receive
any notice as a holder of and in respect of any such securities or to enforce any covenants in any indenture, or to exercise any
other rights whatsoever as a holder of securities purchasable upon exercise of the Rights.
SELLING
STOCKHOLDER
This
prospectus covers an aggregate of up to 190,114 shares of our common stock that may be sold or otherwise disposed of by the selling
stockholder. Such shares are issuable to the selling stockholder upon the exercise of the Warrants we issued to the selling stockholder.
The
following table sets forth certain information with respect to the selling stockholder, including (i) the shares of our common
stock beneficially owned by the selling stockholder prior to this offering, (ii) the number of shares being offered by the selling
stockholder pursuant to this prospectus and (iii) the selling stockholder’s beneficial ownership after completion of this
offering, assuming that all of the shares covered hereby (but none of the other shares, if any, held by the selling stockholder)
are sold.
The
table is based on information supplied to us by the selling stockholder, with beneficial ownership and percentage ownership determined
in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to shares of stock.
This information does not necessarily indicate beneficial ownership for any other purpose. In computing the number of shares beneficially
owned by a selling stockholder and the percentage ownership of that selling stockholder, shares of common stock subject to warrants
held by that selling stockholder that are exercisable as of September 27, 2018, or exercisable within 60 days after September
27, 2018, are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage
ownership of any other person. The percentage of beneficial ownership after this offering is based on 17,911,120 shares outstanding
on September 27, 2018.
The
registration of these shares of common stock does not mean that the selling stockholder will sell or otherwise dispose of all
or any of those securities. The selling stockholder may sell or otherwise dispose of all, a portion or none of such shares from
time to time. We do not know the number of shares, if any, that will be offered for sale or other disposition by any of the selling
stockholder under this prospectus. Furthermore, the selling stockholder may have sold, transferred or disposed of the shares of
common stock covered hereby in transactions exempt from the registration requirements of the Securities Act since the date on
which we filed this prospectus.
To
our knowledge and except as noted below, the selling stockholder has not, or within the past three years has not, any position,
office or other material relationship with us or any of our predecessors or affiliates
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Beneficial
Ownership
Before
This Offering
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Beneficial
Ownership After This Offering
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Selling
Stockholder
(1)
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Number
of Shares
Owned
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Shares
Offered
Hereby
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Shares
Underlying
Warrants
Offered
Hereby
(3)
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Number
of Shares
Owned
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Percentage
of
Outstanding
Shares
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Horizon
Technology Finance Corporation (2)
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190,114
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(1)
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This
table and the information in the notes below are based upon information supplied by the selling stockholder, including reports
and amendments thereto filed with the SEC on Schedule 13G.
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(2)
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The
address of the principal business office of Horizon Technology Finance Corporation is 312 Farmington Avenue, Farmington, CT
06032.
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(3)
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The
actual number of shares of common stock offered hereby and included in the registration statement of which this prospectus
forms a part includes, in accordance with Rule 416 under the Securities Act, such indeterminate number of additional shares
of our common stock as may become issuable in connection with any proportionate adjustment for any stock splits, stock combinations,
stock dividends, recapitalizations or similar events with respect to common stock.
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PLAN
OF DISTRIBUTION
Celsion
Corporation’s Plan of Distribution
We
may sell the securities, from time to time, to or through underwriters or dealers, through agents or remarketing firms, or directly
to one or more purchasers pursuant to:
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underwritten
public offerings;
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negotiated
transactions;
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block
trades;
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“At
the Market Offerings,” within the meaning of Rule 415(a)(4) of the Securities Act, into an existing trading market,
at prevailing market prices; or
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through
a combination of these methods.
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We
may distribute securities from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed;
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at
market prices prevailing at the time of sale;
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at
prices related to such prevailing market prices; or
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at
negotiated prices.
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A
prospectus supplement or supplements will describe the terms of the offering of the securities, including:
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the
name or names of the underwriters, if any;
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if
the securities are to be offered through the selling efforts of brokers or dealers, the plan of distribution and the terms
of any agreement, arrangement, or understanding entered into with broker(s) or dealer(s) prior to the effective date of the
registration statement, and, if known, the identity of any broker(s) or dealer(s) who will participate in the offering and
the amount to be offered through each;
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the
purchase price of the securities and the proceeds we will receive from the sale;
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if
any of the securities being registered are to be offered otherwise than for cash, the general purposes of the distribution,
the basis upon which the securities are to be offered, the amount of compensation and other expenses of distribution, and
by whom they are to be borne;
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any
delayed delivery arrangements;
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any
over-allotment options under which underwriters may purchase additional securities from us;
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any
agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation;
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any
public offering price;
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any
discounts, commissions or commissions allowed or reallowed or paid to dealers;
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the
identity and relationships of any finders, if applicable; and
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any
securities exchange or market on which the securities may be listed.
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Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
If
underwriters are used in the sale, they will acquire the securities for their own account and may resell the securities from time
to time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Unless otherwise indicated in the prospectus supplement, subject to certain conditions, the
underwriters will be obligated to purchase all of the securities offered by the prospectus supplement, other than securities covered
by any over-allotment option. Any public offering price and any discounts or concessions allowed or reallowed or paid to dealers
may change from time to time. We may use underwriters with whom we have a material relationship. We will describe in the prospectus
supplement, naming the underwriter, the nature of any such relationship.
We
may use a remarketing firm to offer the securities in connection with a remarketing arrangement upon their purchase. Remarketing
firms will act as principals for their own account or as agents for us. These remarketing firms will offer or sell the securities
pursuant to the terms of the securities. A prospectus supplement will identify any remarketing firm and the terms of its agreement,
if any, with us and will describe the remarketing firm’s compensation. Remarketing firms may be deemed to be underwriters
in connection the securities they remarket.
If
we offer and sell securities through a dealer, we or an underwriter will sell the securities to the dealer, as principal. The
dealer may resell the securities to the public at varying prices to be determined by the dealer at the time of resale. Any such
dealer may be deemed to be an underwriter of the securities offered and sold. The name of the dealer and the terms of the transaction
will be set forth in the applicable prospectus supplement.
We
may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering
and sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We
may sell securities directly to one or more purchasers without using underwriters or agents. Underwriters, dealers and agents
that participate in the distribution of the securities may be underwriters as defined in the Securities Act, and any discounts
or commissions they receive from us and any profit on their resale of the securities may be treated as underwriting discounts
and commissions under the Securities Act.
We
may authorize agents or underwriters to solicit offers by certain types of institutional investors to purchase securities from
us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment
and delivery on a specified date in the future. We will describe the conditions to these contracts and the commissions we must
pay for solicitation of these contracts in the prospectus supplement.
We
may provide agents and underwriters with indemnification against civil liabilities, including liabilities under the Securities
Act, or contribution with respect to payments that the agents or underwriters may make with respect to these liabilities. Agents
and underwriters may engage in transactions with, or perform services for, us in the ordinary course of business.
We
may offer new issues of securities with no established trading market. Any underwriters may make a market in these securities,
but will not be obligated to do so and may discontinue any market making at any time without notice. We cannot guarantee the liquidity
of the trading markets for any securities.
Any
underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance
with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified
maximum price. Syndicate-covering or other short-covering transactions involve purchases of the securities, either through exercise
of the over-allotment option or in the open market after the distribution is completed, to cover short positions. Penalty bids
permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased
in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities to be
higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
Any
underwriters that are qualified market makers on The NASDAQ Capital Market may engage in passive market making transactions in
the common stock on The NASDAQ Capital Market in accordance with Regulation M under the Exchange Act, during the business day
prior to the pricing of the offering, before the commencement of offers or sales of the common stock. Passive market makers must
comply with applicable volume and price limitations and must be identified as passive market makers. In general, a passive market
maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids
are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when
certain purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above
that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
Selling
Stockholder’s Plan of Distribution
The
selling stockholder, including its transferees, donees, pledgees, assignees and successors-in-interest, may sell, transfer or
otherwise dispose of any or all of the shares of common stock offered by this prospectus from time to time on The NASDAQ Capital
Market or any other stock exchange, market or trading facility on which the shares are traded or in private transactions. These
dispositions may be at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market price
or at negotiated prices. The selling stockholder may use any one or more of the following methods when selling shares:
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ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block
trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
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an
exchange distribution in accordance with the rules of the applicable exchange;
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privately
negotiated transactions;
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broker-dealers
may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share;
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a
combination of any such methods of sale;
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through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or
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any
other method permitted pursuant to applicable law.
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The
selling stockholder may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholder or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser
in amounts to be negotiated. The selling stockholder does not expect these commissions and discounts relating to its sales of
shares to exceed what is customary in the types of transactions involved.
The
selling stockholder may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn
engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholder may also
sell shares of our common stock short and deliver these securities to close out its short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling stockholder may also enter into option or other transactions
with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or
other financial institution may resell pursuant to this prospectus, as supplemented or amended to reflect such transaction.
The
selling stockholder and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each selling stockholder has informed us that it does not have any agreement or understanding, directly
or indirectly, with any person to distribute the common stock.
Because
the selling stockholder may be deemed to be an “underwriter” within the meaning of the Securities Act, it will be
subject to the prospectus delivery requirements of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus.
The selling stockholder had advised us that there is no underwriter or coordinating broker acting in connection with the proposed
sale of the resale securities by the selling stockholder.
The
shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws.
In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously
engage in market making activities with respect to our common stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the selling stockholder will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases
and sales of shares of our common stock by the selling stockholder or any other person. We will make copies of this prospectus
available to the selling stockholder and have informed the selling stockholder of the need to deliver a copy of this prospectus
to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
We
have agreed to use commercially reasonable efforts to keep the registration statement continuously effective at all times until
(a) the warrant shares are sold under such registration statement or pursuant to Rule 144 under the Securities Act, (b) the warrant
shares may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 under the Securities Act, and (c) the five-year
anniversary of the date of the issuance of the warrants, whichever is the earliest to occur. The shares will be sold only through
registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states,
the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
We
are required to pay certain fees and expenses in connection with the registration of the shares of common stock issuable upon
exercise of the warrant. We have agreed to indemnify the selling stockholder against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
We
will not receive any proceeds from the sale of the shares by the selling stockholder.
LEGAL
MATTERS
The
validity of the securities being offered hereby will be passed upon by Sidley Austin LLP, Palo Alto, California. Additional legal
matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable prospectus
supplement.
EXPERTS
WithumSmith+Brown,
PC (“Withum”), an independent registered public accounting firm, has audited our consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2017, as set forth in their report, which is incorporated
by reference in this prospectus. Our financial statements are incorporated herein by reference in reliance on Withum’s report,
given on their authority as experts in accounting and auditing.
Dixon
Hughes Goodman LLP (“DHG”), an independent registered public accounting firm, has audited our consolidated financial
statements included in our Annual Report on Form 10-K for the year ended December 31, 2016, as set forth in their report, which
is incorporated by reference in this prospectus. Our financial statements are incorporated herein by reference in reliance on
DHG’s report, given on their authority as experts in accounting and auditing.
$15,000,000
plus
164,835 Commitment Shares
Common
Stock
Prospectus
Supplement
October
12, 2018
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