Current Report Filing (8-k)
April 23 2020 - 8:46AM
Edgar (US Regulatory)
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): April 23, 2020 (April 20, 2020)
Celsion
Corporation
(Exact
Name of Registrant as Specified in Charter)
Delaware
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001-15911
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52-1256615
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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997
Lenox Drive, Suite 100, Lawrenceville, NJ 08648
(Address
of Principal Executive Offices, and 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):
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[ ]
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Written
communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement
communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement
communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
stock, par value $0.01 per share
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CLSN
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Nasdaq
Capital Market
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §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 Material Definitive Agreement
On
April 21, 2020, Celsion Corporation (the “Company”) received $632,220 in loan funding from the Paycheck Protection
Program (the “PPP”), established pursuant to the recently enacted Coronavirus Aid, Relief, and Economic Security Act
(the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). The unsecured loan
(the “PPP Loan”) is evidenced by a promissory note of the Company dated April 20, 2020 (the “Note”) in
the principal amount of $632,220, to Silicon Valley Bank (the “Bank”), the lender.
Under
the terms of the Note and the PPP Loan, interest accrues on the outstanding principal at the rate of 1.0% per annum. The term
of the Note is two years, though it may be payable sooner in connection with an event of default under the Note. To the extent
the loan amount is not forgiven under the PPP, the Company is obligated to make equal monthly payments of principal and interest,
beginning seven months from the date of the Note, until the maturity date.
The
CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed. Under the PPP, the Company may apply
for and be granted forgiveness for all or part of the PPP Loan. The amount of loan proceeds eligible for forgiveness is based
on a formula that takes into account a number of factors, including the amount of loan proceeds used by the Company during the
eight-week period after the loan origination for certain purposes including payroll costs, interest on certain mortgage obligations,
rent payments on certain leases, and certain qualified utility payments, provided that at least 75% of the loan amount is used
for eligible payroll costs; the employer maintaining or rehiring employees and maintaining salaries at certain levels; and other
factors. Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other
eligible costs during the covered eight-week period will qualify for forgiveness. The Company
intends to use the entire Loan amount for qualifying expense, though no assurance is provided that the Company will obtain
forgiveness of the PPP Loan in whole or in part.
The
Note may be prepaid in part or in full, at any time, without penalty. The Note provides for certain customary events of default,
including (i) failing to make a payment when due under the Note, (ii) failure to do anything required by the Note or any other
loan document, (iii) defaults of any other loan with the Bank, (iv) failure to disclose any material fact or make a materially
false or misleading representation to the Bank or SBA, (v) default on any loan or agreement with another creditor, if the Bank
believes the default may materially affect the Company’s ability to pay the Note, (vi) failure to pay any taxes when due,
(vii) becoming the subject of a proceeding under any bankruptcy or insolvency law, having a receiver or liquidator appointed for
any part of the Company’s business or property, or making an assignment for the benefit of creditors, (viii) having any
adverse change in financial condition or business operation that the Bank believes may materially affect the Company’s ability
to pay the Note, (ix) if the Company reorganizes, merges, consolidates, or otherwise changes ownership or business structure without
the Bank’s prior written consent, or (x) becoming the subject of a civil or criminal action that the Bank believes may materially
affect the Company’s ability to pay the Note. Upon the occurrence of an event of default, the Bank has customary remedies
and may, among other things, require immediate payment of all amounts owed under the Note, collect all amounts owing from the
Company, and file suit and obtain judgment against the Company.
The
foregoing description of the Note is qualified in its entirety by reference to the full text of the Note, a copy of which will
be filed as an Exhibit to the Company’s annual Report on Form 10-Q for the three months ending June 30, 2020.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The
information disclosed in Item 1.01 above is incorporated herein by reference.
Item
8.01. Other Events
On
April 23, 2020, the Company issued a press release regarding the foregoing matters, a copy of which is attached hereto as Exhibit
99.1 and incorporated herein by reference.
Item 9.01 Exhibits.
(d)
Exhibits
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.
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CELSION
CORPORATION
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Date:
April 23, 2020
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By:
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/s/
Jeffrey W. Church
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Jeffrey
W. Church
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Executive
Vice President
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and
Chief Financial Officer
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