0000749647 false --12-31 0000749647 2022-01-10 2022-01-10 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): January 10, 2022

 

 

 

Celsion Corporation

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-15911   52-1256615

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

 

 

997 Lenox Drive, Suite 100, Lawrenceville, NJ   08648
(Address of Principal Executive Offices)   (Zip Code)

 

(609) 896-9100

 

Registrant’s Telephone Number, Including Area Code

 

N/A

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     
  Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
  Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common stock, par value $0.01 per share   CLSN   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 
 

 


Item 1.01 Entry into a Material Definitive Agreement.

 

On January 10, 2022, Celsion Corporation, a Delaware Corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with several institutional investors, pursuant to which the Company agreed to issue and sell, in concurrent registered direct offerings (the “Offerings”), (i) 50,000 shares of the Company’s Series A Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), and (ii) 50,000 shares of the Company’s Series B Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock” and together with the Series A Preferred Stock, the “Preferred Stock”), in each case at an offering price of $285 per share, representing a 5% original issue discount to the stated value of $300 per share, for gross proceeds of each Offering of $14.25 million, or approximately $28.50 million in the aggregate for the Offerings, before the deduction of the Placement Agent’s (as defined below) fee and offering expenses. The shares of Series A Preferred Stock will have a stated value of $300 per share and will be convertible, at a conversion price of $0.91 per share, into 16,483,516 shares of common stock (subject in certain circumstances to adjustments). The shares of Series B Preferred Stock will have a stated value of $300 per share and will be convertible, at a conversion price of $1.00 per share, into 15,000,000 shares of common stock (subject in certain circumstances to adjustments). The Series A Preferred Stock and the Series B Preferred Stock are being offered by the Company pursuant to a registration statement on Form S-3 (File No. 333-254515) (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”). The Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing. The closing of the Offerings is expected to occur on January 13, 2022.

 

The Company intends to call a special meeting of stockholders to consider an amendment (the “Amendment”) to the Company’s Certificate of Incorporation, as amended (the “Charter”), to effect a reverse stock split of the outstanding shares of common stock (“Common Stock”) by a ratio to be determined by the Board of Directors of the Company (the “Reverse Stock Split”), ranging from 7-to-1 to, 10-to-1, 12-to-1 or 15-to-1. The Investors have agreed in the Purchase Agreement to not transfer, offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of the shares of the Preferred Stock until the Reverse Stock Split, to vote the shares of the Series A Preferred Stock purchased in the Offerings in favor of such Amendment and to vote the shares of the Series B Preferred Stock purchased in the Offerings in a manner that “mirrors” the proportions on which the shares of Common Stock (excluding any shares of Common Stock that are not voted) and Series A Preferred Stock are voted on the Reverse Stock Split and the Amendment. The Amendment requires the approval of the majority of the votes associated with our outstanding stock entitled to vote on the proposal. Since the Series B Preferred Stock will mirror only votes cast, abstentions or broker non-votes by common stockholders, which would ordinarily have the effect of a no vote, will not have any effect on the outcome of the vote.

 

Pursuant to the Purchase Agreement, the Company will file two certificates of designation (the “Certificates of Designation”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the shares of Preferred Stock. The Certificates of Designation will provide, in particular, that the Preferred Stock will have no voting rights, other than the right to vote as a class on certain specified matters, except that (i) each share of Series A Preferred Stock will have the right to vote, on an as converted basis, on the Reverse Stock Split (together with the Company’s Common Stock and the Series B Preferred Stock as a single class), and (ii) each share of Series B Preferred Stock will have the right to cast 45,000 votes per share of Series B Preferred Stock on the Reverse Stock Split.

 

The holder of Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of Common Stock. The Preferred Stock is convertible into shares of Common Stock at a rate of $0.91 per share for the Series A Preferred Stock and $1.00 per share for the Series B Preferred Stock. The conversion price can be adjusted pursuant to the Certificate of Designation for stock dividends and stock splits, subsequent rights offerings, pro rata distributions of dividends or the occurrence of a fundamental transaction (as defined in the applicable Certificate of Designation). The Preferred Stock can be converted at the option of the holder at any time after the Company has received stockholder approval for the Reverse Stock Split and filed the requisite Amendment with the Delaware Secretary of State’s office to effectuate the Reverse Stock Split (the “Reverse Stock Split Date”), subject to beneficial ownership limitations set forth in the applicable Certificate of Designation. In addition, on or after the Reverse Stock Split Date, and subject to the satisfaction of certain conditions, the Company can cause the holder of the Preferred Stock to convert their shares of Preferred Stock, subject to such beneficial ownership limitations.

 

 
 

 

Each holder of the Preferred Stock shall have the right to cause the Company to redeem all or part of their shares of the Preferred Stock from the earlier of receipt of stockholder approval of the reverse stock split or of 90 days following the original issue date until 120 days following the original issue date, the “Redemption Date,” in cash at a redemption price equal to 105% of the stated value plus an amount equal to accumulated but unpaid dividends, if any, on such shares (whether or not earned or declared, but excluding interest on such dividends) up to, but excluding, the Redemption Date. The proceeds of the Offerings will be held in an escrow account until the expiration of the redemption period for the Series A Preferred Stock or the Series B Preferred Stock, as applicable, subject to the earlier payment to redeeming holders. Upon expiration of the redemption period, any proceeds remaining in escrow will be disbursed to the Company.

 

In connection with the Offerings, the Company entered into a placement agent agreement (the “Placement Agent Agreement”) with A.G.P./Alliance Global Partners, as placement agent (“AGP,” or the “Placement Agent”) pursuant to which the Company agreed to pay the Placement Agents an aggregate cash fee equal to $1,000,000 and reimburse the Placement Agent for certain of their expenses in an amount not to exceed $110,000.

 

The Placement Agent Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Placement Agent, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.

 

Under the Placement Agent Agreement, the Company and its subsidiaries are prohibited, for a period of 90 days after the closing from issuing, entering into any agreement to issue or announcing any issuance or proposed issuance of common stock, preferred stock or common stock equivalents, subject to limited exceptions for exempted issuances as defined in the Purchase Agreement.

 

In addition, under the Purchase Agreement, to the extent shares of Preferred Stock are outstanding, for a period of 30 days from the date of the Purchase Agreement, the Company and its subsidiaries are prohibited from (i) issuing entering into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or (ii) filing any registration statement or amendment or supplement thereto, other than the Prospectus Supplements for the Offerings (other than a registration statement or amendment or supplement thereto relating to the issuance or resale of the common stock issuable or issued on conversion of shares of Preferred Stock). Additionally, to the extent shares of Preferred Stock are outstanding, from the closing date of the Purchase Agreement until the date that is 120 days thereafter, neither the Company nor any of its subsidiaries may issue any shares of Preferred Stock or other securities having rights senior to or pari passu with the Preferred Stock.

 

Further, from the date of the Purchase Agreement until one year following the Reverse Stock Split Date, the Company is be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving a Variable Rate Transaction, as defined in the Purchase Agreement. Also, until the Reverse Stock Split Date, neither the Company nor any subsidiary may make any issuance whatsoever of common stock or common stock equivalents.

 

The above limitations on issuances of stock under the Purchase Agreement do not apply to exempt issuances as defined in the Purchase Agreement.

 

The foregoing summaries of the Purchase Agreement and the Placement Agent Agreement do not purport to be complete and are subject to, and qualified in their entirety by, such documents attached as Exhibits 10.1 and 1.1, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.

 

The representations, warranties and covenants contained in the Purchase Agreement and the Placement Agent Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the such agreements and are subject to limitations agreed upon by the contracting parties. Accordingly, the Purchase Agreement and the Placement Agent Agreement are incorporated herein by reference only to provide investors with information regarding the terms of the Purchase Agreement and the Placement Agent Agreement and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Securities and Exchange Commission.

 

 
 

 

The legal opinions, including the related consent, of Baker & McKenzie LLP relating to the issuance and sale of Series A Preferred Stock (and the shares of Common Stock issuable upon conversion of the Series A Preferred Stock) and the Series B Preferred Stock (and the shares of Common Stock issuable upon conversion of the Series B Preferred Stock) are filed as Exhibit 5.1 and Exhibit 5.2, respectively, hereto.

 

Item 3.03. Material Modifications to Rights of Security Holders.

 

The disclosure required by this Item and included in Item 1.01 of this Current Report is incorporated herein by reference.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

The disclosure required by this Item and included in Item 1.01 of this Current Report is incorporated herein by reference.

 

Item 8.01 Other Events

 

The Company issued a press release announcing the Offering on January 10, 2022. A copy of the press release is attached hereto as Exhibit 99.1, and is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(a) Not Applicable.

 

(b) Not Applicable.

 

(c) Not Applicable.

 

(d) Exhibits

 

Exhibit Number   Description
1.1   Placement Agent Agreement, dated January 10, 2022, between Celsion Corporation and A.G.P./Alliance Global Partners
3.1   Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Redeemable Preferred Stock
3.2   Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Redeemable Preferred Stock
5.1   Opinion of Baker & McKenzie LLP with respect to validity of the Series A Preferred Stock (and the shares of Common Stock issuable upon conversion of the Series A Preferred Stock)
5.2   Opinion of Baker & McKenzie LLP with respect to validity of the Series B Preferred Stock (and the shares of Common Stock issuable upon conversion of the Series B Preferred Stock)
10.1   Form of Securities Purchase Agreement between Celsion Corporation and the investors therein, dated January 10, 2022
23.1   Consent of Baker & McKenzie LLP (included in Exhibit 5.1)
23.2   Consent of Baker & McKenzie LLP (included in Exhibit 5.2)
99.1   Press Release of Celsion Corporation dated January 10, 2022 announcing the pricing of the Offering
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  CELSION CORPORATION
     
Date: January 11, 2022 By: /s/ Jeffrey W. Church
    Jeffrey W. Church
    Executive Vice President
    and Chief Financial Officer

 

 

 

Celsion (NASDAQ:CLSN)
Historical Stock Chart
From Apr 2022 to May 2022 Click Here for more Celsion Charts.
Celsion (NASDAQ:CLSN)
Historical Stock Chart
From May 2021 to May 2022 Click Here for more Celsion Charts.