Item
1.01 Entry into a Material Definitive Agreement.
On
December 4, 2018, Celsion Corporation (“Celsion”) entered into a Capital on Demand
TM
Sales Agreement
(the “Agreement”) with JonesTrading Institutional Services LLC, as sales agent (“JonesTrading”), pursuant
to which Celsion may offer and sell, from time to time, through JonesTrading shares of common stock, par value $0.01 per share,
of Celsion having an aggregate offering price of up to $16.0 million (the “Shares”). Celsion intends to use the net
proceeds from the offering, if any, for general corporate purposes, including research and development activities, capital expenditures
and working capital. Pending the application of the net proceeds, Celsion intends to invest the net proceeds in short-term, investment
grade, interest-bearing securities.
Celsion
is not obligated to sell any Shares under the Agreement. Subject to the terms and conditions of the Agreement, JonesTrading will
use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable state and federal law,
rules and regulations and the rules of The NASDAQ Capital Market, to sell Shares from time to time based upon Celsion’s
instructions, including any price, time or size limits or other customary parameters or conditions Celsion may impose.
Under
the Agreement, JonesTrading may sell Shares by any method deemed to be an “at the market offering” as defined in Rule
415 promulgated under the Securities Act of 1933, as amended.
The
Agreement will terminate upon the earlier of (i) the sale of all shares of our common stock subject to the Sales Agreement, and
(ii) the termination of the Agreement by JonesTrading or Celsion. The Agreement may be terminated by JonesTrading or Celsion at
any time upon 10 days’ notice to the other party, or by JonesTrading at any time in certain circumstances, including the
occurrence of a material adverse change in Celsion.
Celsion
will pay JonesTrading a commission of 3.0% of the aggregate gross proceeds from each sale of Shares and has agreed to provide
JonesTrading with customary indemnification and contribution rights. Celsion has also agreed to reimburse JonesTrading for legal
fees and disbursements, not to exceed $35,000 in the aggregate, in connection with entering into the Agreement.
The
foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text
of the Agreement, a copy of which is attached as Exhibit 10.1 hereto and incorporated herein by reference.
The
opinion of Celsion’s counsel regarding the validity of the Shares that will be issued pursuant to the Agreement is also
filed herewith as Exhibit 5.1.
The
Shares will be issued pursuant to Celsion’s previously filed and effective Registration Statement on Form S-3 (File No.
333-227236), the base prospectus dated October 12, 2018, filed as part of such Registration Statement, and the prospectus supplement
dated December 4, 2018, filed by Celsion with the Securities and Exchange Commission. This Current Report on Form 8-K shall
not constitute an offer to sell or the solicitation of an offer to buy Shares, nor shall there be any sale of the Shares in any
state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such state.
Safe
Harbor Statement
This
Current Report on Form 8-K contains forward-looking statements. Actual results and the timing of events could differ materially
from those anticipated in such forward-looking statements as a result of risks and uncertainties, including, without limitation,
unforeseen changes in the course of Celsion’s research and development activities and clinical trials; termination of the
Agreement; any increase in Celsion’s cash needs; uncertainty regarding the number of Shares, if any, to be sold by Celsion;
possible actions by customers, suppliers, competitors or regulatory authorities; and other risks detailed from time to time in
Celsion’s periodic reports filed with the Securities and Exchange Commission. Celsion undertakes no obligation to update
any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information,
future developments or otherwise.