Item 1.01
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Entry
into a Material Definitive Agreement.
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Purchase
Agreement and Registration Rights Agreement with Aspire Capital
On
October 28, 2019, Celsion Corporation (the “Company”), 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 $10.0 million of shares of the Company’s common stock over the 24-month term of the Purchase Agreement.
Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire
Capital (the “Registration Rights Agreement”), in which the Company agreed to file one or more registration statements,
as permissible and necessary to register under the Securities Act of 1933, as amended (the “Securities Act”), registering
the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the Purchase
Agreement.
Under
the Purchase Agreement, after the Securities and Exchange Commission (the “SEC”) has declared effective the registration
statement referred to above, on any trading day selected by the Company, the Company has the right, in its sole discretion, to
present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal)
to purchase up to 100,000 shares of the Company’s common stock per business day, up to $10.0 million of the Company’s
common stock in the aggregate at a per share price (the “Purchase Price”) equal to the lesser of:
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the
lowest sale price of the Company’s common stock on the purchase date; or
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the
arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the ten (10) consecutive
trading days ending on the trading day immediately preceding the purchase date.
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In
addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount of 100,000 shares, the Company
also has the right, in its 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 stock equal to up to 30% of the aggregate
shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”),
subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice
is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the
VWAP Purchase Date.
The
Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction
occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP
Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase
has been completed.
The
Purchase Agreement provides that the Company and Aspire Capital shall not effect any sales under the Purchase Agreement on any
purchase date where the closing sale price of the Company’s common stock is less than $0.25. There are no trading volume
requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of sales of the
Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated
to make purchases from the Company as directed by the Company 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. In consideration for entering into the Purchase Agreement, concurrently
with the execution of the Purchase Agreement, the Company issued to Aspire Capital 100,000 shares of the Company’s common
stock (the “Commitment Shares”). The Purchase Agreement may be terminated by the Company at any time, at its discretion,
without any cost to the Company. 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 the Company’s common stock during any time prior to the
termination of the Purchase Agreement. Any proceeds from the Company receives under the Purchase Agreement are expected to be
used for working capital and general corporate purposes.
The
foregoing is a summary description of certain terms of the Purchase Agreement and the Registration Rights Agreement and, by its
nature, is incomplete. Copies of the Purchase Agreement and Registration Rights Agreement are filed herewith as Exhibits 10.1
and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. All readers are encouraged
to read the entire text of the Purchase Agreement and the Registration Rights Agreement.
The
issuance of the Commitment Shares and all other shares of common stock that may be issued from time to time to Aspire Capital
under the Purchase Agreement is exempt from registration under the Securities Act, pursuant to the exemption for transactions
by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act.
This
Current Report on Form 8-K contains “forward-looking” statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements related to the potential future sale
of shares of the Company’s common stock and price for such sales under the Purchase Agreement. The words “may,”
“will,” “could,” “would,” “should,” “expect,” “intend,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue,” “ongoing” and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these identifying words. While the Company believes its plans,
intentions and expectations reflected in those forward-looking statements are reasonable, these plans, intentions or expectations
may not be achieved. The Company’s actual results, performance or achievements could differ materially from those contemplated,
expressed or implied by the forward-looking statements. For information about the factors that could cause such differences, please
refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, including the information discussed
under the captions “Item 1 Business,” “Item 1A. Risk Factors” and “Item 7 Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” as well as the Company’s various other filings with
the SEC. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The Company assumes
no obligation to update any forward-looking statement.