Filed
pursuant to Rule 424(b)(5)
Registration
No. 333-227236
PROSPECTUS
SUPPLEMENT DATED JUNE 22, 2020
(To
prospectus dated October 12, 2018)
2,666,667
Shares
Common
Stock
We
are offering 2,666,667 shares of our common stock, par value $0.01 per share, pursuant to this prospectus supplement and
the accompanying prospectus at a price of $3.75 per share.
Our
common stock is listed on The Nasdaq Capital Market under the symbol “CLSN”. On June 19, 2020, the last reported
sale price of our common stock on The Nasdaq Capital Market was $5.26 per share.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-10 of this prospectus supplement
for a discussion of information that should be considered in connection with an investment in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per Share
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Total(1)
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Public offering price
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$
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3.7500
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$
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10,000,001.2500
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Underwriting discount (1)
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$
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0.2625
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$
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700,000.0875
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Proceeds to us, before expenses
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$
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3.4875
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$
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9,300,001.1625
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(1)
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See
the section of this prospectus supplement entitled “Underwriting” for a description of the compensation payable
to the underwriters.
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Delivery
of the shares of common stock to investors is expected on or about June 24, 2020, subject to customary closing conditions,
only in book-entry form through the facilities of The Depository Trust Company.
Sole
Book-Running Manager
Oppenheimer
& Co.
The
date of this prospectus supplement is June 22, 2020.
TABLE
OF CONTENTS
Prospectus
Supplement
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, or the SEC, on September 7, 2018, as amended on September
28, 2018, and that was declared effective on October 12, 2018. Under this shelf registration statement, we may, from time to time,
sell common stock or other securities, including in this offering.
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 and the
underwriters 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.
Forward-Looking
Statements
Statements
and terms such as “expect”, “anticipate”, “estimate”, “plan”, “believe”
and words of similar import regarding our expectations as to the development and effectiveness of our technologies, the potential
demand for our products, and other aspects of our present and future business operations, constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. 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, readers should
specifically consider the various factors contained in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2019 filed with the SEC on March 25, 2020, which factors include, without limitation, plans and objectives of management
for future operations or programs or proposed new products or services; changes in the course of research and development activities
and in clinical trials; possible changes in cost and timing of development and testing; possible changes in capital structure,
financial condition, working capital needs and other financial items; changes in approaches to medical treatment; clinical trial
analysis and future plans relating thereto; our ability to realize the full extent of the anticipated benefits of our acquisition
of substantially all of the assets of EGEN, Inc., including achieving operational cost savings and synergies in light of any delays
we may encounter in the integration process and additional unforeseen expenses; introduction of new products by others; possible
licenses or acquisitions of other technologies, assets or businesses; and possible actions by customers, suppliers, partners,
competitors and regulatory authorities. These and other risks and uncertainties could cause actual results to differ materially
from those indicated by forward-looking statements.
The
discussion of risks and uncertainties set forth in this prospectus supplement is not necessarily a complete or exhaustive list
of all risks facing the Company 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 that
the nature and elements of existing risks will change, over time. 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. Except as required by law, we assume no obligation to revise or update any forward-looking statement
that may be made from time to time by us or on our behalf for any reason, even if new information becomes available in the future.
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-10. Unless we specify otherwise, all references in this prospectus
to “Celsion,” “we,” “our,” “us” and “our company” refer to Celsion
Corporation.
Company
Overview
We
are a fully integrated development clinical stage oncology drug company focused on advancing 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 cancer. These investigational products are based on technologies that provide the platform for the future development
of a range of therapeutics for difficult to treat forms of cancer. The first technology, on which ThermoDox® is based, is
Lysolipid Thermally Sensitive Liposomes, a heat sensitive liposomal based dosage form that targets disease with known chemotherapeutics
in the presence of mild heat. The second technology is TheraPlas, a novel nucleic acid-based treatment for local transfection
of therapeutic DNA 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 heptocellular carcinoma (“HCC”) which we call the OPTIMA Study,
which study was initiated in 2014. 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, radiofrequency
ablation (“RFA”), for newly diagnosed, intermediate stage HCC patients. HCC incidence globally is approximately 755,000
new cases per year and has the fourth highest mortality rate of all cancers globally. Approximately 30% of newly diagnosed patients
can be addressed with RFA.
On
February 24, 2014, the Company announced that the United States Food and Drug Administration (the “FDA”), 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 HCC. The trial design of the OPTIMA Study is based on the comprehensive analysis of
data from an earlier Phase III clinical trial called the HEAT Study. The OPTIMA Study is supported by a hypothesis developed from
an overall survival analysis of a large subgroup of patients from the HEAT Study.
The
OPTIMA Study was designed with extensive input from globally recognized HCC researchers and expert clinicians and after receiving
formal written feedback from the FDA. The OPTIMA Study was designed to enroll up to 550 patients globally at approximately 65
clinical sites in the U.S., Canada, European Union (“EU”), 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”), the
first of which was conducted in November 2019 and the second of which is expected to be conducted in July 2020.
Post-hoc
data analysis from the HEAT Study suggested 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 collected since the top line progression free survival (“PFS”) data from the HEAT Study were
announced in January 2013, with the data sets from each OS sweep demonstrating substantial improvement in clinical benefit over
the control group with statistical significance. On August 15, 2016, we announced updated results from our 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, with a 95% Confidence Interval (“CI”) within the bounds of 0.45 to 0.94 and a p-value of 0.02, indicating a
statistically significant finding. 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 optimized RFA alone).
While
this information should be viewed with caution since it is based on a post-hoc analysis of a standardized RFA subgroup evaluated
prospectively, we also conducted additional analyses that further strengthen the evidence for the HEAT Study subgroup. We commissioned
an independent computational model at the University of South Carolina Medical School. The results unequivocally 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.
We
completed enrollment of 556 patients in the OPTIMA Study in August 2018. Data for the study will be reviewed with two pre-planned
interim analyses, the first of which was conducted in November 2019 and the second of which is expected to be conducted in July
2020, each as described below. We expect that the final efficacy analysis, if necessary, will be completed in the first half of
2021. If the study proves to provide a clinically meaningful improvement in overall survival, we will immediately apply for marketing
authorization in the United States, Europe and China. ThermoDox® has received FDA Fast Track Designation and has been granted
orphan drug designation for primary liver cancer in both the United States and Europe. Additionally, the FDA has provided ThermoDox®
with a 505(b)(2) registration pathway. Subject to a successful trial, the OPTIMA Study has been designed to support registration
in all key primary liver cancer markets. We fully expect to submit registrational applications in the United States, Europe and
China. We expect to submit and believes that applications will be accepted in South Korea, Taiwan and Vietnam, three other significant
markets for ThermoDox® if it were to receive approval in Europe, China or the United States.
On
December 18, 2018, we announced that the DMC for the OPTIMA Study completed its last scheduled review of all patients enrolled
in the trial and unanimously recommended that the OPTIMA Study continue according to protocol to its final data readout. The DMC’s
recommendation was based on its assessment of safety and data integrity of all patients randomized in the trial as of October
4, 2018. The DMC reviewed study data at regular intervals throughout the patient enrollment period, 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 all 556 patients enrolled into the trial, the DMC evaluated 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
August 5, 2019, the Company announced that the prescribed number of events has been reached for the first pre-specified interim
analysis of the OPTIMA Study with ThermoDox® plus RFA in patients with HCC, or primary liver cancer. Following preparation
of the data, the first interim analysis was conducted by the DMC on November 1, 2019. This timeline was consistent with the Company’s
stated expectations and is necessary to provide a full and comprehensive data set that may represent the potential for a successful
trial outcome. In accordance with the statistical plan, this initial interim analysis has a target of 118 events, or 60% of the
total number required for the final analysis. At the time of the data cutoff, the Company received reports of 128 events. The
HR for success at 128 events is approximately 0.63, which represents a 37% reduction in the risk of death compared with optimized
RFA alone and is consistent with the 0.65 HR that was observed in the prospective HEAT Study subgroup, which demonstrated a two-year
overall survival advantage and a median time to death of more than seven and a half years.
On
November 4, 2019, the Company announced that the DMC unanimously recommended the OPTIMA Study continue according to protocol.
The recommendation was based on a review of blinded safety and data integrity from 556 patients enrolled in the Company’s
multinational, double-blind, placebo-controlled pivotal Phase III study with ThermoDox® plus RFA in patients with HCC, or
primary liver cancer. The DMC’s pre-planned interim efficacy review followed 128 patient events, or deaths, which occurred
in August 2018. Data presented demonstrated that PFS and OS data appear to be tracking with patient data observed at a similar
point in the Company’s subgroup of patients followed prospectively in the earlier HEAT Study, upon which the OPTIMA Study
is based.
The
data review demonstrated the following:
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The
OPTIMA Study patient demographics and risk factors are consistent with what the Company observed in the HEAT Study subgroup
with all data quality metrics meeting expectations.
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Median
PFS for the OPTIMA Study reached 17 months as of August 2019. These blinded data compare favorably with 16 months median PFS
for the 285 patients in the HEAT Study subgroup of patients treated with RFA >45 minutes and followed prospectively for
overall survival.
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Median
OS for the OPTIMA Study has not been reached as of August 5, 2019, however median OS appears to be consistent with the HEAT
Study subgroup of patients treated with RFA >45 minutes and followed prospectively for overall survival.
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The
OPTIMA Study has lost only 4 patients to follow-up from the initiation of the trial in September 2014 through August 2019
while the trial design allows for 3% risk for loss per year, which at this point would have exceeded 60 patients.
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While
the Company has not unblinded the study to report a HR, PFS and OS are tracking similarly to the subgroup of patients who received
more than 45 minutes of RFA in the HEAT Study and followed prospectively for more than three years. This subgroup in the HEAT
study demonstrated a 2-year overall survival advantage and a median time to death of more than 7 ½ years. This tracking
appears to bode well for success at the next pre-planned interim efficacy analysis, which is intended after a minimum of 158 patient
deaths and is projected to occur during the second quarter of 2020. The HR for success at 158 events is 0.70. This is below the
HR of 0.65 observed for the 285 patients in the HEAT Study subgroup of patients treated with RFA for more than 45 minutes.
On
August 13, 2019, we announced that results from an independent analysis of our ThermoDox® HEAT Study conducted by the National
Institutes of Health, or NIH, were published in the peer-reviewed publication, Journal of Vascular and Interventional Radiology.
The analysis was conducted by the intramural research program of the NIH and the NIH Center for Interventional Oncology (“CIO”),
with the full data set from the Company’s HEAT Study. The analysis evaluated the full data set to determine if there was
a correlation between baseline tumor volume and RFA heating time (minutes/tumor volume in milliliters), with or without ThermoDox®
treatment, for patients with HCC. The NIH analysis was conducted under the direction of Dr. Bradford Wood, MD, Director, NIH Center
for Interventional Oncology and Chief, NIH Clinical Center Interventional Radiology.
The
article titled, “RFA Duration Per Tumor Volume May Correlate With Overall Survival in Solitary Hepatocellular Carcinoma
Patients Treated With RFA Plus Lyso-thermosensitive Liposomal Doxorubicin,” discussed the NIH analysis of results from
437 patients in the HEAT Study (all patients with a single lesion representing 62.4% of the study population). The key finding
was that increased RFA heating time per tumor volume improved overall survival (“OS”) with significance in patients
with single-lesion HCC who were treated with RFA plus ThermoDox®, compared to patients treated with RFA alone. A one-unit
increase in RFA duration per tumor volume was shown to result in about a 20% improvement in OS for patients administered ThermoDox®,
compared to RFA alone. The authors conclude that increasing RFA heating time in combination with ThermoDox® significantly
improves OS and establishes an improvement of over two years versus the control arm when the heating time per milliliter of tumor
is greater than 2.5 minutes. This finding is consistent with the Company’s own results, which defined the optimized RFA
procedure as a 45-minute treatment for tumors with a diameter of 3 centimeters. Thus, the NIH analysis lends support to the hypothesis
underpinning the OPTIMA Study.
On
August 27, 2019, the Company announced that a study from a single site in China titled “Thermosensitive liposomal doxorubicin
plus radiofrequency ablation increased tumor destruction and improved survival in patients with medium and large hepatocellular
carcinoma: A randomized, double-blinded, dummy-controlled clinical trial in a single center” has been published in the Journal
of Cancer Research and Therapeutics. These data were generated as part of the Phase III HEAT (Hepatocellular Carcinoma Study
of RFA and ThermoDox®) Study sponsored by Celsion Corporation. The data from this single site at the Peking University Cancer
Hospital and Institute in Beijing show an OS improvement of 22.5 months in patients with 3-7 cm unresectable HCC tumors receiving
combined RFA and ThermoDox®, compared with the use of optimized RFA alone.
In
this study, patients received 50 mg/m2 of ThermoDox® or placebo, plus RFA for 45 minutes or longer. Patients were
followed for 11 to 80 months (average: 49.1 ± 24.8 months), with 18 of 22 patients completing the study. The mean OS for
the ThermoDox® plus RFA group was 68.5 ± 7.2 months, which was significantly greater than the placebo plus RFA group
(46.0 ± 10.6 months, pValue = 0.045). At the end of the follow-up period, the percentage of patients alive after 1, 3 and
5 years were as follows:
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ThermoDox + RFA
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RFA Alone
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% of patients alive at 1 year
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90.0
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%
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87.5
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%
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% of patients alive at 3 years
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90.0
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%
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50.0
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%
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% of patients alive at 5 years
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77.1
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%
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37.5
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%
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The
publication can be found in the Journal of Cancer Research and Therapeutics | Year: 2019 | Volume: 15 | Issue: 4 | Page
773 – 783. The authors are Yang W, Lee JC, Chen MH, Zhang ZY, Bai XM, Yin SS, et al. from the Departments of Ultrasound
and Radiology, Key Laboratory of Carcinogenesis and Translational Research (Ministry of Education), Peking University Cancer Hospital
and Institute in Beijing. Professor Min-Hua Chen was a principal investigator in the HEAT Study, from which these data are derived,
and is also a principal investigator in the OPTIMA Study for the treatment of primary liver cancer with ThermoDox® plus standardized
RFA.
On
April 15, 2020, the Company announced that the prescribed minimum number of events of 158 patient deaths has been reached for
the second pre-specified interim analysis of the OPTIMA Phase III Study. Following preparation of the data, the DMC is expected
to meet in July to conduct the second interim analysis. We expect to announce DMC recommendations as soon as possible after the
meeting. The HR for success at 158 deaths is 0.70, which represents a 30% reduction in the risk of death compared with optimized
RFA alone. This compares favorably with the HR of 0.65 observed in the HEAT Study.
The
HEAT Study. On January 31, 2013, we announced that the HEAT Study, ThermoDox® in combination with RFA, did not meet
the primary endpoint, PFS, in the 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®.
GEN-1
GEN-1
is a DNA-based immunotherapeutic product candidate for the localized treatment of ovarian cancer 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 is 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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OVATION
Study
In
February 2015, we announced that the FDA accepted, without objection, the Phase IB 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 was designed (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 to evaluate safety and efficacy and attempt to define an optimal dose for a follow-on Phase 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 was designed to characterize
the nature of the immune response triggered by GEN-1 at various levels of the patients’ immune system.
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 and again on March 2, 2019, we announced final
clinical and translational research data from the OVATION Study.
We
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. The OVATION Study evaluated escalating doses of GEN-1 (36 mg/m2,
47 mg/m2, 61 mg/m2 and 79 mg/m2) administered intraperitoneally in combination with three cycles
of neoadjuvant chemotherapy prior to interval debulking surgery, followed by three cycles of NAC in the treatment of newly diagnosed
patients with Stage III/IV ovarian cancer.
In
this Phase IB dose-escalation study, the 14 patients who were evaluable for response demonstrated median PFS of 21 months in patients
treated per protocol and 17.1 months for the intent-to-treat population (n=18) for all dose cohorts, including three patients
who dropped out of the study after 13 days or less, and two patients who did not receive full NAC and GEN-1 cycles. In addition,
100% of patients administered NAC plus the two higher doses of GEN-1 experienced an objective tumor response (defined as a partial
or complete response) compared to only 60% of patients given the two lower doses. Pathological changes were assessed as part of
the study, with the density of markers measured in tissue sections assessed via immunohistochemistry staining. Dose-limiting toxicity
was not reached in the OVATION 1 Study.
OVATION
2 Study
On
November 13, 2017, the Company filed its Phase I/II clinical trial protocol with the FDA 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 Phase I portion of the study will be followed by a continuation at the
selected dose in 130 patients randomized Phase II study. On November 5, 2019, the Company announced that the independent Data
Safety Monitoring Board (“DSMB”) completed its safety review of data from the first eight patients enrolled in the
ongoing Phase I/II OVATION 2 Study. Based on the DSMB’s recommendation, the study will continue as planned and the Company
will proceed with completing enrollment in the Phase I portion of the trial.
In
the OVATION 2 Study, patients in the GEN-1 treatment arm will receive GEN-1 plus chemotherapy pre- and post-interval debulking
surgery. The OVATION 2 Study will include up to 130 patients with Stage III/IV ovarian cancer, with 12 to 15 patients in the Phase
I portion and up to 118 patients in Phase II. The study is powered to show a 33% improvement in the primary endpoint, PFS, when
comparing GEN-1 with neoadjuvant + adjuvant chemotherapy versus neoadjuvant + adjuvant chemotherapy alone. The PFS primary analysis
will be conducted after at least 80 events have been observed or after all patients have been followed for at least 16 months,
whichever is later.
Developed
with extensive input from the Company’s Medical Advisory Board, the OVATION 2 Study builds on promising clinical and translational
research data from the Phase IB dose-escalation OVATION 1 Study, in which enrolled patients received escalating weekly doses of
GEN-1 up to 79 mg/m² for a total of eight treatments in combination with standard-of-care neoadjuvant chemotherapy (“NACT”),
followed by interval debulking surgery (“IDS”). In addition to exploring a higher dose of GEN-1 in the OVATION 2 study,
patients will continue to receive GEN-1 after their IDS in combination with adjuvant chemotherapy.
The
latest DSMB review of GEN-1 at 100 mg/m² has confirmed that there were no dose limiting toxicities detected in any of the
five patients dosed with GEN-1 and that intraperitoneal administration is well tolerated even when given with standard NACT. Of
the eight patients treated in the Phase I portion of the OVATION 2 Study, five patients were treated with GEN-1 plus NACT and
three patients were treated with NACT only.
In
March 2020, the Company announced initial clinical data from the first 15 patients enrolled in the ongoing Phase I/II OVATION
2 Study for patients newly diagnosed with Stage III and IV ovarian cancer. The OVATION 2 Study combines GEN-1, the Company’s
IL-12 gene-mediated immunotherapy, with NACT. Following NACT, patients undergo IDS, followed by three additional cycles of chemotherapy.
GEN-1
plus standard NACT produced positive dose-dependent efficacy results, with no dose-limiting toxicities, which correlates well
with successful surgical outcomes as summarized below:
|
●
|
Of
the 15 patients treated in the Phase I portion of the OVATION 2 Study, nine patients were treated with GEN-1 at a dose of
100 mg/m² plus NACT and six patients were treated with NACT only. All 15 patients had successful resections of their
tumors, with seven out of nine patients (78%) in the GEN-1 treatment arm having an R0 resection, which indicates a microscopically
margin-negative resection in which no gross or microscopic tumor remains in the tumor bed. Only three out of six patients
(50%) in the NACT only treatment arm had a R0 resection.
|
|
|
|
|
●
|
When
combining these results with the surgical resection rates observed in the Company’s prior Phase Ib dose-escalation trial
(the “OVATION 1 Study”), a population of patients with inclusion criteria identical to the OVATION 2 Study, the
data reflect the strong dose-dependent efficacy of adding GEN-1 to the current standard of care NACT:
|
|
|
|
|
% of Patients with R0 Resections
|
|
0, 36, 47 mg/m² of GEN-1 plus NACT
|
|
n=12
|
|
|
42
|
%
|
61, 79, 100 mg/m² of GEN-1 plus NACT
|
|
n=17
|
|
|
82
|
%
|
|
●
|
The
objective response rate (“ORR”) as measured by Response Evaluation Criteria in Solid Tumors (“RECIST”)
criteria for the 0, 36, 47 mg/m² dose GEN-1 patients were comparable, as expected, to the higher (61, 79, 100 mg/m²)
dose GEN-1 patients, with both groups demonstrating an approximate 80% ORR.
|
On
March 23, 2020, the Company announced that the European Medicines Agency (“EMA”) Committee for Orphan Medicinal Products
(“COMP”) has recommended that GEN-1 be designated as an orphan medicinal product for the treatment of ovarian cancer.
GEN-1, designed using Celsion’s proprietary TheraPlas platform technology, is an IL-12 DNA plasmid vector encased in a non-viral
nanoparticle delivery system, which enables cell transfection followed by persistent, local secretion of the IL-12 protein. GEN-1
previously received orphan designation from the FDA and is currently being evaluated in the OVATION 2 Study for the treatment
of newly diagnosed patients with Stage III and IV ovarian cancer.
On
March 26, 2020, the Company jointly announced with Medidata, a Dassault Systèmes company, that examining matched patient
data provided by Medidata in a synthetic control arm (“SCA”) with results from the Company’s completed Phase
IB dose-escalating OVATION 1 Study with GEN-1 in Stage III/IV ovarian cancer patients showed positive results in PFS. The HR was
0.53 in the intent-to-treat (“ITT”) group, showing strong signals of efficacy. GEN-1, designed using our proprietary
TheraPlas platform technology, is an IL-12 DNA plasmid vector encased in a non-viral nanoparticle delivery system, which enables
cell transfection followed by persistent, local secretion of the IL-12 protein. Celsion believes these data may warrant consideration
of strategies to accelerate the clinical development program for GEN-1 in newly diagnosed, advanced ovarian cancer patients by
the FDA. In its March 2019 discussion with Celsion, the FDA noted that preliminary findings from the Phase IB OVATION I Study
were exciting but lacked a control group to evaluate GEN-1’s independent impact on impressive tumor response, surgical results
and PFS. The FDA encouraged the Company to continue its GEN-1 development program and consult with FDA with new findings that
may have a bearing on designations such as Fast Track and Breakthrough Therapy. SCAs have the potential to revolutionize clinical
trials in certain oncology indications and some other diseases where a randomized control is not ethical or practical. SCAs are
formed by carefully selecting control patients from historical clinical trials to match the demographic and disease characteristics
of the patients treated with the new investigational product. SCAs have been shown to mimic the results of traditional randomized
controls so that the treatment effects of an investigational product can be visible by comparison to the SCA. SCAs can help advance
the scientific validity of single arm trials, and in certain indications, reduce time and cost, and expose fewer patients to placebos
or existing standard-of-care treatments that might not be effective for them.
TheraPlas
Technology Platform
TheraPlas
is a technology platform for the delivery of DNA and messenger RNA, or 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.
On
August 8, 2016, we signed the GEN-1 Agreement with Hisun to pursue an expanded partnership for the technology transfer relating
to the clinical and commercial manufacture and supply of GEN-1, Our proprietary gene mediated, IL-12 immunotherapy, for the 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 U.S. and for potential
future studies of GEN-1 in China. We are currently evaluating GEN-1 in first line ovarian cancer patients.
In
June 2012, we signed a long-term commercial supply agreement with Hisun 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 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
us 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.
Recent
Developments
In
2019, the Company received approval from the New Jersey Economic Development Authority to sell $1.9 million of its State of New
Jersey net operating losses (“NOLs”) as part of the Technology Business Tax Certificate Program sponsored by The New
Jersey Economic Development Authority. Under the program, emerging biotechnology companies with unused NOLs and unused research
and development credits are allowed to sell these benefits to other companies. In early 2020, the Company entered into an agreement
to sell these NOLs and, in April 2020, the Company completed the sale of the New Jersey NOLs and received $1.8 million in
net proceeds. The Company has approximately $2.0 million available in future tax benefits remaining under the NOL program for
future years. The Company anticipates selling those NOLs in 2020 but there can be no assurance as to the timing
of any sale or that the NOLs may be sold at all.
Under
the Company’s Capital on DemandTM Sales Agreement (the “Capital on Demand Agreement”) with JonesTrading
Institutional Services LLC, as sales agent, the Company sold 1,164,748 shares of its common stock for net proceeds of approximately
$3.38 million (at an average price of $2.90 per share) during the period of June 2, 2020 through June 12, 2020. The Company has
not sold any other shares under the Capital on Demand Agreement in 2020.
Corporate
Information
We
were founded in 1982 and are a Delaware corporation. Our principal executive offices are located at 997 Lenox Drive, Suite 100,
Lawrenceville, NJ 08648. Our telephone number is (609) 896-9100. Our website is www.celsion.com. The information contained
on or that can be accessed through our website is not incorporated by reference into this prospectus, and you should not consider
information on our website to be part of this prospectus or in deciding to purchase our common stock.
The Offering
Common
stock offered
|
|
2,666,667 shares
|
|
|
|
Common
stock to be outstanding after this offering
|
|
31,923,768 shares
|
|
|
|
Public
Offering Price
|
|
$3.75 per
share
|
|
|
|
Use
of proceeds
|
|
We
intend to use the net proceeds from this offering for clinical development of our product candidates, working capital and
other general corporate purposes. See “Use of Proceeds” on page S-12.
|
|
|
|
Risk
factors
|
|
See
the “Risk Factors” section of this prospectus supplement and in the documents incorporated by reference in this
prospectus supplement for a discussion of factors to consider before deciding to invest in our securities.
|
|
|
|
Nasdaq
Capital Market symbol
|
|
“CLSN”
|
|
|
|
Lock-Up
Agreements
|
|
We, and
certain of our executive officers and our directors have agreed with the underwriters that, without the prior written
consent of Oppenheimer & Co., subject to certain negotiated exceptions, we and certain of our executive officers and
our directors will not, for a period of 60 days, in either case, following the date of this prospectus supplement, offer
or contract to sell any of our shares of common stock. See “Underwriting” on page S-15 of this prospectus
supplement.
|
(i)
The number of shares of our common stock outstanding is based on an aggregate of 29,257,101 shares of our common stock outstanding
as of March 31, 2020 and excludes:
|
●
|
4,348,142
shares of common stock issuable upon the exercise of outstanding options as of March 31, 2020, having a weighted average exercise
price of $2.62 per share;
|
|
|
|
|
●
|
8,750
shares of common stock issuable upon the vesting of common stock awards as of March 31, 2020, having a weighted average grant
day fair value of $1.59 per share;
|
|
|
|
|
●
|
3,826,098
shares of common stock issuable upon the exercise of outstanding warrants as of March 31, 2020, having a weighted average exercise
price of $1.34 per share;
|
|
|
|
|
●
|
4,152
shares of common stock reserved for future issuance pursuant
to our existing stock incentive plan;
|
|
|
|
|
●
|
1,164,748 shares of common stock issued in June
2020 pursuant to the Capital on Demand Agreement. See “-Recent Developments” for further details; and
|
|
|
|
|
●
|
130,864 shares of common stock issued pursuant
to exercise of stock options in June 2020.
|
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 24 under Part I, Item IA of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC
on March 25, 2020, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 15, 2020,
as well as any amendment or update to our risk factors reflected in subsequent filings with the SEC, 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.
The
global COVID-19 pandemic could have material adverse effects on the Company and your investment.
In
January 2020, the World Health Organization declared an outbreak of novel coronavirus (“COVID-19”) a global pandemic,
and the U.S. Department of Health and Human Services declared a public health emergency to aid the U.S. healthcare community in
responding to COVID-19. This virus continues to spread globally and, as of mid-May 2020, has spread to over 100 countries, including
the United States. Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19,
including, but not limited to, shelter-in-place orders, quarantines, and significant restrictions on travel, as well as restrictions
that prohibit many employees from going to work. Uncertainty with respect to the economic impacts of the pandemic has introduced
significant volatility in the financial markets. The Company did not observe significant impacts on its business or results of
operations for the three months ended March 31, 2020 due to the global emergence of COVID-19. While the extent to which COVID-19
impacts the Company’s future results will depend on future developments, the pandemic and associated economic impacts could
result in a material impact to the Company’s future financial condition, results of operations and cash flows.
The
Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions
and the recent disruptions to, and volatility in, financial markets in the United States and worldwide resulting from the ongoing
COVID-19 pandemic.
The
disruptions caused by COVID-19 may also disrupt preclinical studies, the clinical trials process and enrollment of patients. This
may delay commercialization efforts. The Company is currently monitoring its operating activities in light of these events and
it is reasonably possible that the virus could have a negative effect on the Company’s financial condition and results of
operations, the specific impact is not readily determinable as of the date of these financial statements.
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:
|
●
|
the
progress of research activities;
|
|
|
|
|
●
|
the
number and scope of research programs;
|
|
|
|
|
●
|
the
progress of preclinical and clinical development activities;
|
|
|
|
|
●
|
the
progress of the development efforts of parties with whom the Company has entered into research and development agreements;
|
|
●
|
the
costs associated with additional clinical trials of product candidates;
|
|
|
|
|
●
|
the
ability to maintain current research and development licensing arrangements and to establish new research and development
and licensing arrangements;
|
|
|
|
|
●
|
the
ability to achieve milestones under licensing arrangements;
|
|
|
|
|
●
|
the
costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and
|
|
|
|
|
●
|
the
costs and timing of regulatory approvals.
|
If
you purchase securities in this offering, you will suffer immediate dilution of your investment.
The
public offering price of our common stock in this offering is substantially higher than the net tangible book value per share
of our common stock. Therefore, if you purchase securities in this offering, you will pay an effective price per share of common
stock that substantially exceeds our net tangible book value per share after giving effect to this offering. Based on a public
offering price of $3.75 per share of common stock, if you purchase securities in this offering, you will experience immediate
dilution of $(3.52) per share, representing the difference between the public offering price of the securities and our
pro forma as adjusted net tangible book value per share after giving effect to this offering. Furthermore, if any of our outstanding
options or warrants are exercised at prices below the public offering price, we grant additional options or other awards under
our equity incentive plans or issue additional warrants, you may experience further dilution of your investment. See the section
entitled “Dilution” below for a more detailed illustration of the dilution you would incur if you participate in this
offering.
Because
we will have broad discretion and flexibility in how the net proceeds from this offering are used, we may use the net proceeds
in ways in which you disagree.
We
intend to use the net proceeds from this offering for clinical development of our product candidates, working capital and other
general corporate purposes. See “Use of Proceeds” on page S-12. We have not allocated specific amounts of the net
proceeds from this offering for any of the foregoing purposes. Accordingly, our management will have significant discretion and
flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to
the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the
net proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield
a favorable, or any, return for us. The failure of our management to use such funds effectively could have a material adverse
effect on our business, financial condition, operating results and cash flow.
You
may experience future dilution as a result of future equity offerings and other issuances of our securities. In addition, this
offering and future equity offerings and other issuances of our common stock or other securities may adversely affect our common
stock price.
In
order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible
into or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may not
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 securities convertible
into common stock in future transactions may be higher or lower than the price per share in this offering. You will incur dilution
upon exercise of any outstanding stock options, warrants or upon the issuance of shares of common stock under our stock incentive
programs. In addition, the sale of shares in this offering and any future sales of a substantial number of shares of our common
stock in the public market, or the perception that such sales may occur, could adversely affect the price of our common stock.
We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares of
common stock for sale will have on the market price of our common stock.
We
do not currently intend to pay dividends on our common stock, and any return to investors is expected to come, if at all, only
from potential increases in the price of our common stock.
At
the present time, we intend to use available funds to finance our operations. Accordingly, while payment of dividends rests within
the discretion of our board of directors, we have no intention of paying any such dividends in the foreseeable future. Any return
to investors is expected to come, if at all, only from potential increases in the price of our common stock.
Use
of Proceeds
We
estimate that the net proceeds from the sale of the securities offered under this prospectus supplement, after deducting the underwriting
discounts and estimated offering expenses payable by us will be $9.1 million.
We
intend to use the net proceeds from the sale of the shares for clinical development of our product candidates, working capital
and for other general corporate purposes. The amounts and timing of our use of proceeds will vary depending on a number of factors,
including the amount of cash generated or used by our operations. As a result, we will retain broad discretion in the allocation
of the net proceeds of this offering. In addition, while we have not entered into any agreements, commitments or understandings
relating to any significant transaction as of the date of this prospectus supplement, we may use a portion of the net proceeds
to pursue acquisitions, joint ventures and other strategic transactions.
Dividend
Policy
We
have never declared or paid cash dividends on our common stock. We currently intend to retain our future earnings, if any, for
use in our business and therefore do not anticipate paying cash dividends in the foreseeable future. Payment of future dividends,
if any, will be at the discretion of our board of directors after taking into account various factors, including our financial
condition, operating results, current and anticipated cash needs and plans for expansion.
Capitalization
The
following table sets forth our consolidated cash and cash equivalents, equity and total capitalization as of March 31, 2020:
|
●
|
on
an actual basis; and
|
|
|
|
|
●
|
on
a pro forma basis to give effect to the sale of 2,666,667 shares of our common stock in this offering and the application
of the estimated net proceeds as described under “Use of Proceeds.”
|
You
should read the data set forth in the table below in conjunction with the section of this prospectus supplement under the caption
“Use of Proceeds” as well as our “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and our financial statements and notes and other financial information included or incorporated by reference
in this prospectus supplement.
|
|
At
March 31, 2020
(in
1,000’s)
|
|
(UNAUDITED)
|
|
Actual
|
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
Cash,
investments, interest and net operating loss receivables and other current assets
|
|
$
|
18,877
|
|
|
$
|
27,937
|
|
Preferred
stock $0.01 par value: 100,000 shares authorized; no shares issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
Common
stock $0.01 par value: 112,500,000 shares authorized; 29,257,435 and 31,924,102 shares issued and 29,257,101
and 31,923,768 shares outstanding actual and pro forma, respectively
|
|
|
293
|
|
|
|
320
|
|
Additional
paid-in capital
|
|
|
311,571
|
|
|
|
320,604
|
|
Accumulated
deficit, net of accumulated other comprehensive income
|
|
|
(295,570
|
)
|
|
|
(295,570
|
)
|
Treasury
Stock: 334 shares
|
|
|
(85
|
)
|
|
|
(85
|
)
|
Total
stockholders’ equity
|
|
|
16,209
|
|
|
|
25,629
|
|
Total
capitalization
|
|
$
|
16,209
|
|
|
$
|
25,629
|
|
The
number of shares of our common stock outstanding is based on an aggregate of 29,257,101 shares of our common stock outstanding
as of March 31, 2020 and excludes:
|
●
|
4,348,142
shares of common stock issuable upon the exercise of outstanding options as of March 31, 2020, having a weighted average exercise
price of $2.62 per share;
|
|
|
|
|
●
|
8,750
shares of common stock issuable upon the vesting of common stock awards as of March 31, 2020, having a weighted average grant
day fair value of $1.59 per share;
|
|
|
|
|
●
|
3,826,098
shares of common stock issuable upon the exercise of outstanding warrants as of March 31, 2020, having a weighted average
exercise price of $1.34 per share;
|
|
|
|
|
●
|
4,152
shares of common stock reserved for future issuance pursuant
to our existing stock incentive plan;
|
|
|
|
|
●
|
1,164,748 shares of common stock issued in June
2020 pursuant to the Capital on Demand Agreement. See “-Recent Developments” for further details; and
|
|
|
|
|
●
|
130,864 shares of common stock issued pursuant
to exercise of stock options in June 2020.
|
Dilution
If
you purchase shares in this offering, your ownership interest will be diluted to the extent of the difference between the public
offering price per security you will pay in this offering and the as adjusted net tangible book value per share of our common
stock after giving effect to this offering. Net tangible book value per share is determined by dividing the number of outstanding
shares of our common stock into our net tangible book value, which consists of total tangible assets (total assets less intangible
assets) less total liabilities. As of March 31, 2020, we had a historical net tangible book value of $(1.8 million), or
approximately $(0.06) per share.
Purchasers
participating in this offering will incur immediate, substantial dilution. After giving effect to the sale of securities in this
offering at the public offering price of $3.75 per share, and after deducting estimated offering expenses payable by us,
our as adjusted net tangible book value per share of our common stock at March 31, 2020 would have been approximately $7.3
million, or $0.23 per share. This represents an immediate increase in net tangible book value per share of our common
stock of approximately $0.29 per share to existing stockholders and an immediate dilution of approximately $(3.52)
per share to purchasers in this offering. The following table illustrates this per share dilution:
Public
offering price per share
|
|
|
|
|
|
$
|
3.75
|
|
|
|
|
|
|
|
|
|
|
Net
tangible book value per share as of March 31, 2020
|
|
$
|
(0.06
|
)
|
|
|
|
Increase
per share attributable to this offering
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted net tangible book value per share as of March 31, 2020
|
|
|
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
Dilution
in net tangible book value per share to new investors in this offering
|
|
|
|
|
|
$
|
(3.52
|
)
|
The
number of shares of our common stock outstanding is based on an aggregate of 29,257,101 shares of our common stock outstanding
as of March 31, 2020 and excludes:
|
●
|
4,348,142
shares of common stock issuable upon the exercise of outstanding options as of March 31, 2020, having a weighted average exercise
price of $2.62 per share;
|
|
|
|
|
●
|
8,750
shares of common stock issuable upon the vesting of common stock awards as of March 31, 2020, having a weighted average grant
day fair value of $1.59 per share;
|
|
|
|
|
●
|
3,826,098
shares of common stock issuable upon the exercise of outstanding warrants as of March 31, 2020, having a weighted average
exercise price of $1.34 per share;
|
|
|
|
|
●
|
4,152
shares of common stock reserved for future issuance pursuant
to our existing stock incentive plan;
|
|
|
|
|
●
|
1,164,748 shares of common stock issued in June
2020 pursuant to the Capital on Demand Agreement. See “-Recent Developments” for further details; and
|
|
|
|
|
●
|
130,864 shares of common stock issued pursuant
to exercise of stock options in June 2020.
|
To
the extent that any outstanding options or warrants are exercised, new options are issued under our stock incentive plans, or
we otherwise issue additional shares of common stock in the future, at a price less than the public offering price, there will
be further dilution to new investors.
The
information above assumes that the underwriters do not exercise their option to purchase additional shares of our common stock.
If the underwriters exercise their option in full to purchase additional shares of our common stock in this offering at the public
offering price of $3.75 per share, the net tangible book value per share after this offering would be $0.23 per
share, the immediate increase in the net tangible book value per share to existing stockholders would be $0.29 per share
and the immediate dilution to investors participating in this offering would be $(3.52) per share.
Description
of Securities We Are Offering
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 June 19, 2020, there were 30,552,713 shares of 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, or the DGCL, the provisions of our certificate of incorporation, as amended, or our certificate of incorporation,
and our bylaws, as amended, or 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.
UNDERWRITING
We
entered into an underwriting agreement with the underwriters named below on June 22, 2020. Oppenheimer & Co. Inc. is
acting as the representative of the several underwriters. Subject to the terms and conditions stated in the underwriting agreement,
each underwriter named below has severally agreed to purchase, and we have agreed to sell to that underwriter, the number of shares
of common stock set forth opposite the underwriter’s name.
Underwriter
|
|
|
Number
of Shares
|
|
Oppenheimer
& Co. Inc.
|
|
|
2,666,667
|
|
Total
|
|
|
2,666,667
|
|
The
underwriters are obligated to purchase all the shares
if they purchase any of the shares. The shares of common stock offered hereby are expected to be ready for delivery on or about
June 24 against payment in immediately available funds.
The
underwriters are offering the shares of common stock subject to various conditions and may reject all or part of any order. The
representative of the underwriters has advised us that the underwriters propose initially to offer the shares of common stock
to the public at the public offering price set forth on the cover page of this prospectus supplement and to dealers at a price
less a concession not in excess of $0.15750 per share to brokers and dealers. After the shares of common stock are released
for sale to the public, the representative may change the offering price, the concession, and other selling terms at various times.
The
following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this
offering, before expenses.
|
|
|
Per
Share
|
|
|
|
Total
|
|
Public
offering price
|
|
$
|
3.7500
|
|
|
$
|
10,000,001.2500
|
|
Underwriting
discounts and commissions(1)
|
|
$
|
0.2625
|
|
|
$
|
700,000.0875
|
|
Proceeds,
before expenses, to us
|
|
$
|
3.4875
|
|
|
$
|
9,300,001.1625
|
|
(1)
We have agreed to pay the underwriters a commission of 7% of gross proceeds raised in the offering.
We
estimate that our total expenses of the offering, excluding the estimated underwriting discounts and commissions, will be approximately
$240,000, which includes the fees and expenses for which we have agreed to reimburse the underwriters, provided that any
such fees and expenses in excess of an aggregate of $100,000 will be subject to our prior written approval (which shall not be
unreasonably withheld).
Pursuant
to the underwriting agreement, until December 31, 2020, Oppenheimer & Co. Inc. shall have a right of first refusal to act as
sole underwriter, initial purchaser, placement/selling agent, or arranger, as the case may be, on any new financing for the
Company (excluding equipment lease financings, loans or grants from governmental authorities or in connection with government
programs and financings relating to or sales of tax attributes) during such period. Oppenheimer & Co. Inc.
shall have the sole right to determine whether or not any other broker dealer shall have the right to participate in any such
offering and the economic terms of any such participation.
Rules
of the SEC may limit the ability of the underwriters to bid for or purchase securities before the distribution of the securities
is completed. However, the underwriters may engage in the following activities in accordance with the rules:
|
●
|
Stabilizing
transactions: The representative may make bids or purchases for the purpose of pegging, fixing or maintaining the price of
the shares of common stock, so long as stabilizing bids do not exceed a specified maximum.
|
|
|
|
|
●
|
Syndicate
covering transactions: The underwriters may sell more shares of common stock in connection with this offering than the number
of shares of common stock that they have committed to purchase. This over-allotment creates a short position for the underwriters.
This short sales position may involve either “covered” short sales or “naked” short sales. Covered
short sales are short sales made in an amount not greater than the underwriters’ over-allotment option to purchase additional
shares of common stock, if applicable. The underwriters may close out any covered short position either by exercising their
over-allotment option, if applicable, or by purchasing shares in the open market. To determine how they will close the covered
short position, the underwriters will consider, among other things, the price of shares of common stock available for purchase
in the open market, as compared to the price at which they may purchase shares of common stock through the over-allotment
option, if applicable. Naked short sales are short sales in excess of the over-allotment option, if applicable. The underwriters
must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to
be created if the underwriters are concerned that, in the open market after pricing, there may be downward pressure on the
price of the shares of common stock that could adversely affect investors who purchase shares of common stock in this offering.
|
|
|
|
|
●
|
Penalty
bids: If the representative purchases shares of common stock in the open market in a stabilizing transaction or syndicate
covering transaction, it may reclaim a selling concession from the underwriters and selling group members who sold those shares
of common stock as part of this offering.
|
|
|
|
|
●
|
Passive
market making: Market makers in the shares of common stock who are underwriters or prospective underwriters may make bids
for or purchases of shares of common stock, subject to limitations, until the time, if ever, at which a stabilizing bid is
made.
|
Similar
to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales or to stabilize the market
price of our shares of common stock may have the effect of raising or maintaining the market price of our shares of common stock
or preventing or mitigating a decline in the market price of our shares of common stock. As a result, the price of the shares
of our common stock may be higher than the price that might otherwise exist in the open market. The imposition of a penalty bid
might also have an effect on the price of the shares of common stock if it discourages resales of the shares.
We
have agreed to indemnify the underwriters and other specified persons against certain civil liabilities, including liabilities
under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and to contribute
to payments that the underwriters may be required to make in respect of such liabilities.
Lock-Up
Agreements
We,
and certain of our executive officers and directors, have agreed, subject to specified exceptions, not to directly or indirectly,
without the prior written consent of Oppenheimer & Co. Inc.
|
●
|
offer,
pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose
of, any common stock or any securities convertible into or exercisable or exchangeable for common stock;
|
|
|
|
|
●
|
enter
into any swap, hedge or other agreement that transfers, in whole or in part, the economic consequences of ownership of common
stock or any securities convertible into or exercisable or exchangeable for common stock regardless of whether any such transaction
is to be settled in securities, in cash or otherwise;
|
|
|
|
|
●
|
make
any demand for, or exercise any right with respect to, the registration under the Securities Act of the offer and sale of
any common stock or any securities convertible into or exercisable or exchangeable for common stock; or
|
|
|
|
|
●
|
publicly
announce any intention to do any of the foregoing.
|
This
restriction, as it pertains to our directors and officers, terminates after the 60th day after the date of this prospectus
supplement or, if earlier, the date on which (i) the closing price of the common stock equals at least 175% of the price to
public per share in this offering and (ii) the Phase III OPTIMA study meets the clinical endpoints at the second
interim analysis. Oppenheimer & Co. Inc. may, in its sole discretion and at any time or from time to time before the
termination of the lock-up period, as applicable, release us and/or our officers and directors from all or any portion of
these lock-up restrictions.
Electronic
Delivery of Preliminary Prospectus
A
prospectus supplement in electronic format may be delivered to potential investors by one or more of the underwriters participating
in this offering. The prospectus supplement in electronic format will be identical to the paper version of such prospectus supplement.
Other than the prospectus supplement in electronic format, the information on any underwriter’s website and any information
contained in any other website maintained by an underwriter is not part of this prospectus supplement, the accompanying prospectus
or the registration statement of which this prospectus supplement and the accompanying prospectus form a part.
Notice
to Non-U.S. Investors
European
Economic Area
In
relation to each Member State of the European Economic Area , no offer of any securities which are the subject of the offering
contemplated by this prospectus has been or will be made to the public in that Member State other than any offer where a prospectus
has been or will be published in relation to such securities that has been approved by the competent authority in that Member
State or, where appropriate, approved in another Member State and notified to the relevant competent authority in that Member
State in accordance with the Prospectus Regulation, except that an offer of such securities may be made to the public in that
Member State:
|
(a)
|
to
any legal entity which is a “qualified investor” as defined in the Prospectus Regulation;
|
|
|
|
|
(b)
|
to
fewer than 150, natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), as permitted
under the Prospectus Regulation, subject to obtaining the prior consent of the representatives of the underwriters for any
such offer; or
|
|
|
|
|
(c)
|
in
any other circumstances falling within Article 1(4) of the Prospectus Regulation,
|
provided
that no such offer of securities shall require the Company or any of the underwriters to publish a prospectus pursuant to Article
3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For
the purposes of this provision, the expression an “offer to the public” in relation to any securities in any Member
State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities
to be offered so as to enable an investor to decide to purchase or subscribe the securities, as the same may be varied in that
Member State by any measure implementing the Prospectus Regulation in that Member State and the expression “Prospectus Regulation”
means Regulation (EU) 2017/1129.
United
Kingdom
This
prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors (as
defined in the Prospectus Regulation) that are also (i) investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, referred to herein as the “Order”, and/or
(ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be
communicated or caused to be communicated. Each such person is referred to herein as a “Relevant Person”.
This
prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed
by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a Relevant Person should
not act or rely on this document or any of its contents.
Any
invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets
Act 2000 (the “FSMA”) may only be communicated or caused to be communicated in connection with the issue or sale of
the securities in circumstances in which Section 21(1) of the FSMA does not apply. All applicable provisions of the FSMA must
be complied with in respect of anything done by any person in relation to the securities in, from or otherwise involving the United
Kingdom.
Canada
The
common stock may be sold only to purchasers purchasing as principal that are both “accredited investors” as defined
in National Instrument 45-106 Prospectus and Registration Exemptions and “permitted clients” as defined in National
Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the common stock must
be made in accordance with an exemption from the prospectus requirements and in compliance with the registration requirements
of applicable securities laws.
Germany
Each
person who is in possession of this prospectus is aware of the fact that no German securities prospectus (wertpapierprospekt)
within the meaning of the German Securities Prospectus Act (Wertpapier-prospektgesetz, or the Act) of the Federal Republic of
Germany has been or will be published with respect to the shares of our common stock. In particular, each underwriter has represented
that it has not engaged and has agreed that it will not engage in a public offering in the Federal Republic of Germany within
the meaning of the Act with respect to any of the shares of our common stock otherwise than in accordance with the Act and all
other applicable legal and regulatory requirements.
Hong
Kong
The
common stock may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute
an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional
investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder,
or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the
Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued
or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is
directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do
so under the laws of Hong Kong) other than with respect to common stock which are or are intended to be disposed of only to persons
outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.
571, Laws of Hong Kong) and any rules made thereunder.
Singapore
This
prospectus has not been and will not be lodged or registered with the Monetary Authority of Singapore. Accordingly, this prospectus
and any other document or material in connection with the offer or sale, or the invitation for subscription or purchase of the
securities may not be issued, circulated or distributed, nor may the securities be offered or sold, or be made the subject of
an invitation for subscription or purchase, whether directly or indirectly, to the public or any member of the public in Singapore
other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or
the SFA, (ii) to a relevant person as defined under Section 275(2), or any person pursuant to Section 275(1A) of the SFA, and
in accordance with the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with
the conditions of any other applicable provision of the SFA.
Where
the common stock are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
|
(a)
|
a
corporation (which is not an accredited investor as defined under Section 4A of the SFA) the sole business of which is to
hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited
investor; or
|
|
|
|
|
(b)
|
a
trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is
an accredited investor,
|
shares,
debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust
shall not be transferable for six months after that corporation or that trust has acquired the Offer Shares under Section 275
of the SFA except:
|
(a)
|
to
an institutional investor under Section 274 of the SFA or to a relevant person defined in Section 275(2) of the SFA, or to
any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that
corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent
in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or
other assets, and further for corporations, in accordance with the conditions, specified in Section 275 of the SFA;
|
|
|
|
|
(b)
|
where
no consideration is or will be given for the transfer; or
|
|
|
|
|
(c)
|
where
the transfer is by operation of law.
|
Switzerland
The
common stock may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (the “SIX”)
or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to
the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure
standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange
or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the
common stock or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither
this document nor any other offering or marketing material relating to the offering, or the common stock have been or will be
filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of
common stock will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the offer of common stock
has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). Accordingly,
no public distribution, offering or advertising, as defined in CISA, its implementing ordinances and notices, and no distribution
to any non-qualified investor, as defined in CISA, its implementing ordinances and notices, shall be undertaken in or from Switzerland,
and the investor protection afforded to acquirers of interests in collective investment schemes under CISA does not extend to
acquirers of common stock.
United
Arab Emirates
This
offering has not been approved or licensed by the Central Bank of the United Arab Emirates (the “UAE”), Securities
and Commodities Authority of the UAE and/or any other relevant licensing authority in the UAE including any licensing authority
incorporated under the laws and regulations of any of the free zones established and operating in the territory of the UAE, in
particular the Dubai Financial Services Authority (“DFSA”), a regulatory authority of the Dubai International Financial
Centre (“DIFC”). The offering does not constitute a public offer of securities in the UAE, DIFC and/or any other free
zone in accordance with the Commercial Companies Law, Federal Law No 8 of 1984 (as amended), DFSA Offered Securities Rules and
NASDAQ Dubai Listing Rules, accordingly, or otherwise. The common stock may not be offered to the public in the UAE and/or any
of the free zones.
The
common stock may be offered and issued only to a limited number of investors in the UAE or any of its free zones who qualify as
sophisticated investors under the relevant laws and regulations of the UAE or the free zone concerned.
France
This
prospectus supplement has not been prepared in the context of a public offering of financial securities in France within the meaning
of Article L.411-1 of the French Code Monétaire et Financier and Title I of Book II of the Reglement Général
of the Autorité des marchés financiers, or the AMF, and therefore has not been and will not be filed with the AMF
for prior approval or submitted for clearance to the AMF. Consequently, the shares of our common stock may not be, directly or
indirectly, offered or sold to the public in France and offers and sales of the shares of our common stock may only be made in
France to qualified investors (investisseurs qualifiés) acting for their own, as defined in and in accordance with Articles
L.411-2 and D.411-1 to D.411-4, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code Monétaire et Financier. Neither
this prospectus supplement nor any other offering material may be released, issued or distributed to the public in France or used
in connection with any offer for subscription on sale of the shares of our common stock to the public in France. The subsequent
direct or indirect retransfer of the shares of our common stock to the public in France may only be made in compliance with Articles
L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code Monétaire et Financier.
Israel
In
the State of Israel, the securities offered hereby may not be offered to any person or entity other than the following:
(a)
|
a
fund for joint investments in trust (i.e., mutual fund), as such term is defined in the Law for Joint Investments in Trust,
5754-1994, or a management company of such a fund;
|
|
|
(b)
|
a
provident fund as defined in Section 47(a)(2) of the Income Tax Ordinance of the State of Israel, or a management company
of such a fund;
|
|
|
(c)
|
an
insurer, as defined in the Law for Oversight of Insurance Transactions, 5741-1981, (d) a banking entity or satellite entity,
as such terms are defined in the Banking Law (Licensing), 5741-1981, other than a joint services company, acting for their
own account or from the account of investors of the type listed in Section 15A(b) of the Securities Law 1968;
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|
|
(d)
|
a
company that is licensed as a portfolio manager, as such term is defined in Section 8(b) of the Law for the Regulation of
Investment Advisors and Portfolio Managers, 5755-1995, acting on its own account or for the account of investors of the type
listed in Section 15A(b) of the Securities Law 1968;
|
|
|
(e)
|
a
company that is licensed as an investment advisor, as such term is defined in Section 7(c) of the Law for the Regulation of
Investment Advisors and Portfolio Managers, 5755-1995, acting on its own account;
|
|
|
(f)
|
a
company that is a member of the Tel Aviv Stock Exchange, acting on its own account or for the account of investors of the
type listed in Section 15A(b) of the Securities Law 1968;
|
|
|
(g)
|
an
underwriter fulfilling the conditions of Section 56(c) of the Securities Law, 5728-1968;
|
|
|
(h)
|
a
venture capital fund (defined as an entity primarily involved in investments in companies which, at the time of investment,
(i) are primarily engaged in research and development or manufacture of new technological products or processes and (ii) involve
above-average risk);
|
|
|
(i)
|
an
entity primarily engaged in capital markets activities in which all of the equity owners meet one or more of the above criteria;
and
|
|
|
(j)
|
an
entity, other than an entity formed for the purpose of purchasing securities in this offering, in which the shareholders equity
(including pursuant to foreign accounting rules, international accounting regulations and U.S. generally accepted accounting
rules, as defined in the Securities Law Regulations (Preparation of Annual Financial Statements), 1993) is in excess of NIS
250 million.
|
Any
offeree of the securities offered hereby in the State of Israel shall be required to submit written confirmation that it falls
within the scope of one of the above criteria. This prospectus supplement will not be distributed or directed to investors in
the State of Israel who do not fall within one of the above criteria.
NASDAQ Capital Market Listing
Our common stock is listed on The NASDAQ
Capital Market under the symbol “CLSN.”
Legal
Matters
The
validity of the securities being offered hereby will be passed upon by Baker & McKenzie LLP, New York, NY. Certain legal matters
will be passed upon for the underwriter representative by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, NY.
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 years ended December 31, 2019 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.
Where
You Can Find More Information
This
prospectus supplement constitutes a part of the registration statement on Form S-3 that we have filed with the SEC under the Securities
Act. As permitted by the SEC’s rules, this prospectus supplement and any accompanying prospectus, which forms a part of
the registration statement, do not contain all of the information that is included in the registration statement. You will find
additional information about us in the registration statement. Any statement made in this prospectus supplement or any accompanying
prospectus concerning legal documents are not necessarily complete and you should read the documents that are filed as exhibits
to the registration statement or otherwise filed with the SEC for a more complete understanding of the document or matter.
We
are subject to the reporting requirements of the Exchange Act, and file annual, quarterly and current reports, proxy statements
and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the
SEC’s website at http://www.sec.gov. We also maintain a website at www.celsion.com, at which you may access
these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the
SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus.
You
may also request a copy of these filings, at no cost, by writing or telephoning us at: 997 Lexington Drive, Suite 100, Lawrenceville,
NJ 08648, (609) 896-9100.
Incorporation
of Certain Information by Reference
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can
disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated
by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically
update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus
modifies or replaces that statement.
We
incorporate by reference our documents listed below and any future filings we may make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act between the date of this prospectus and the termination of the offering of the securities described
in this prospectus.
This
prospectus incorporates by reference the documents set forth below that have previously been filed with the SEC:
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●
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our
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 25, 2020;
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|
●
|
our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020, filed with the SEC on May 15, 2020;
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●
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the
portions of our definitive proxy statement on Schedule 14A filed with the SEC on April 29, 2020 that are deemed “filed”
with the SEC under the Exchange Act;
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|
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|
●
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our
Current Reports on Form 8-K filed with the SEC on April 1, 2019, October 28, 2019, March 3, 2020, March 9, 2020, March 13,
2020, April 23, 2020, June 1, 2020 and June 16, 2020; and
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|
|
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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.
|
All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering, including any such filings made after the date of the initial registration statement and prior to
effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will
also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of
such reports and documents.
Any
statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus
will be deemed to be modified or superseded for purposes hereof to the extent that a statement contained in this prospectus or
any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes
the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute
a part of this prospectus.
You
may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they
are specifically incorporated by reference in the documents) by writing or telephoning us at the following address:
Celsion,
Inc.
997
Lenox Drive, Suite 100
Lawrenceville,
NJ 08648
(609)
896-9100
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus.
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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●
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common
stock;
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●
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preferred
stock;
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●
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debt
securities;
|
|
|
|
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●
|
warrants
to purchase common stock or preferred stock;
|
|
|
|
|
●
|
rights
to purchase common stock or preferred stock; and
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|
|
|
|
●
|
units
comprised of two or more of the foregoing securities.
|
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 11 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 25 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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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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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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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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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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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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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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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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statements regarding cost and timing of development and testing, capital structure, financial condition, working capital needs
and other financial items;
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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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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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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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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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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.
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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designation
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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the
liquidation preference per share;
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the
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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the
procedures for any auction or remarketing, if any;
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the
provisions for a sinking fund, if any;
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the
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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a
discussion of any material United States federal income tax considerations applicable to the preferred stock;
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the
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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any
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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any
other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock.
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The
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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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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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.
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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-
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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.
2,666,667
Shares
Common
Stock
PROSPECTUS SUPPLEMENT
Oppenheimer
& Co.
June
22, 2020
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