Celsion Corporation
CELSION CORP (Form: 10-Q, Received: 08/09/2005 17:17:51)
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2005

 

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 000-14242

 


 

CELSION CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 


 

Delaware   52-1256615

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. employer

identification no.)

 

10220-L Old Columbia Road, Columbia, Maryland 21046-2364

(Address of Principal Executive Offices) (Zip Code)

 

(410) 290-5390

(Registrant’s telephone number, including area code)

 


 

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨

 

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes   x     No   ¨

 

As of August 5, 2005, the Registrant had outstanding 160,901,600 shares of Common Stock, $.01 par value.

 



Table of Contents

TABLE OF CONTENTS

 

PART I: FINANCIAL INFORMATION     
     Item 1.    Financial Statements    1
     Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.    9
     Item 3.    Quantitative and Qualitative Disclosures about Market Risk.    15
     Item 4.    Controls and Procedures.    15
PART II: OTHER INFORMATION    15
     Item 2.    Changes in Securities and Use of Proceeds.    15
     Item 4.    Submission of Matters to a Vote of Security Holders.    16
     Item 6.    Exhibits.    16
     SIGNATURES    17
     EXHIBITS     
     11    Statement Re: Computation of Earnings Per Share.     
     31.1    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.     
     31.2    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.     
     32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     
     32.2    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     

 

 


Table of Contents

PART I

FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

Index to Financial Statements

 

    Page

Balance Sheets June 30, 2005 (Unaudited) and December 31, 2004   2
Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2005 and 2004   4
Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2005 and 2004   5
Notes to Financial Statements   6

 

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CELSION CORPORATION

CONDENSED BALANCE SHEETS

June 30, 2005 and December 31, 2004

 

ASSETS

 

    

June 30,

2005


  

December 31,

2004


     (Unaudited)     

Current assets:

             

Cash

   $ 5,315,889    $ 10,483,816

Accounts receivable - trade

     942,314      691,938

Other receivables

     20,103      91,101

Inventories

     3,949,951      2,201,663

Prepaid expenses

     620,293      679,237
    

  

Total current assets

     10,848,550      14,147,755
    

  

Property and equipment - at cost:

             

Furniture and office equipment

     178,283      176,666

Computer hardware and software

     275,504      264,774

Laboratory, shop and production equipment

     638,507      607,418

Leasehold improvements

     120,101      120,101
    

  

       1,212,395      1,168,959

Less accumulated depreciation

     597,655      486,861
    

  

Net value of property and equipment

     614,740      682,098
    

  

Other assets:

             

Investment in Celsion China, Ltd.

     63,528      107,797

Escrow account-license fee

     2,023,337      2,007,002

Deposits

     17,706      17,706

Prepaid inventory development costs

     27,450      58,214

Patent licenses (net of amortization)

     26,782      31,365
    

  

Total other assets

     2,158,803      2,222,084
    

  

Total assets

   $ 13,622,093    $ 17,051,937
    

  

 

 

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LIABILITIES AND STOCKHOLDERS’ EQUITY

 

    

June 30,

2005


   

December 31,

2004


 
     (Unaudited)        

Current liabilities:

                

Accounts payable – trade

   $ 1,656,395     $ 819,168  

Accrued non-cash compensation

     71,391       53,543  

Other accrued liabilities

     1,224,227       684,550  

Current portion of deferred revenue

     571,428       571,428  
    


 


Total current liabilities

     3,523,441       2,128,689  
    


 


Deferred revenue – license fee

     2,666,667       2,952,382  
    


 


Total liabilities

     6,190,108       5,081,071  
    


 


Stockholders’ equity:

                

Common Stock $0.01 par value: 250,000,000 shares authorized, 160,901,600 and 160,749,497 shares issued and outstanding at June 30, 2005 and December 31, 2004, respectively

     1,609,016       1,607,494  

Additional paid-in capital

     84,647,524       84,580,637  

Accumulated deficit

     (78,824,555 )     (74,217,265 )
    


 


Total stockholders’ equity

     7,431,985       11,970,866  
    


 


Total liabilities and stockholders’ equity

   $ 13,622,093     $ 17,051,937  
    


 


 

See accompanying notes.

 

 

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CELSION CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

     Three Months Ended June 30,

    Six Months Ended June 30,

 
     2005

    2004

    2005

    2004

 

Revenue:

                                

Sales

   $ 2,896,350     $ 442,945     $ 4,766,503     $ 542,945  

Cost of sales

     1,926,707       348,916       3,198,556       423,703  
    


 


 


 


Gross margin

     969,643       94,029       1,567,947       119,242  

Operating expenses:

                                

General and administrative

     1,071,703       367,161       1,838,003       1,936,549  

Research and development.

     2,485,328       1,386,258       4,703,918       5,972,342  
    


 


 


 


Total operating expenses

     3,557,031       1,753,419       6,541,921       7,908,891  
    


 


 


 


Loss from operations

     (2,587,388 )     (1,659,390 )     (4,973,974 )     (7,789,649 )

License fee income amortization

     142,857       142,857       285,714       190,476  

Interest income

     63,859       58,619       125,239       99,614  

(Loss) from investment in Celsion China, Ltd

     (23,253 )     (13,672 )     (44,269 )     (37,707 )
    


 


 


 


(Loss) before income taxes…

     (2,403,925 )     (1,471,586 )     (4,607,290 )     (7,537,266 )

Income taxes

     —         —         —         —    
    


 


 


 


Net Loss

   $ (2,403,925 )   $ (1,471,586 )   $ (4,607,290 )   $ (7,537,266 )
    


 


 


 


Net loss per common share (basic and diluted)

   $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.05 )
    


 


 


 


Weighted average shares outstanding

     160,898,206       160,302,355       160,850,846       156,764,532  
    


 


 


 


 

See accompanying notes.

 

 

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CELSION CORPORATION

 

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Six Months Ended June 30,

 
     2005

    2004

 

Cash flows from operating activities:

                

Net loss

   $ (4,607,290 )   $ (7,537,266 )

Non-cash items included in net loss:

                

Depreciation and amortization

     115,377       86,089  

Amortization of deferred revenue – license fee income

     (285,715 )     (190,476 )

Loss from investment in Celsion China, Ltd

     44,269       37,707  

Common Stock and stock options issued for compensation and other operating expenses

     86,257       424,909  

Stock based employee compensation

     —         (1,030,684 )

Net changes in:

                

Accounts receivable—trade

     (250,376 )     (370,000 )

Other receivables

     70,998       (132,669 )

Inventories

     (1,748,288 )     (1,541,931 )

Prepaid expenses

     58,944       165,429  

Escrow account – license fee

     (16,335 )     (2,000,635 )

Prepaid inventory development costs

     30,764       28,580  

Accounts payable-trade

     837,227       834,962  

Other accrued liabilities.

     539,677       505,636  

Deposits

     —         5,916  

Deferred revenue – license fee

     —         4,000,000  
    


 


Net cash used by operating activities

     (5,124,491 )     (6,714,433 )

Cash flows from investing activities:

                

Investment in Celsion China, Ltd

     —         (200,000 )

Purchase of property and equipment

     (43,436 )     (416,703 )
    


 


Net cash used by investing activities

     (43,436 )     (616,703 )
    


 


Cash flows from financing activities:

                

Proceeds of stock issuances.

     —         12,836,624  

Payment of note payable

     —         —    
    


 


Net cash provided by financing activities

     —         12,836,624  
    


 


Net (decrease) increase in cash

     (5,167,927 )     5,505,488  

Cash at beginning of period

     10,483,816       12,272,407  
    


 


Cash at end of the period

   $ 5,315,889     $ 17,777,895  
    


 


 

See accompanying notes.

 

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CELSION CORPORATION

 

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

(June 30, 2005)

 

(Unaudited)

 

Note 1. Basis of Presentation

 

The accompanying unaudited condensed financial statements of Celsion Corporation (which we sometimes refer to as Celsion, the Company, we or us) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for a fair presentation, have been included in the accompanying unaudited financial statements. Operating results for the three-month and six-month periods ended June 30, 2005 are not necessarily indicative of the results that may be expected for any other interim period(s) or for any full year. For further information, refer to the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004.

 

Note 2. Common Stock Outstanding and Per Share Information

 

For the six-month periods ended June 30, 2005 and 2004, per share data is based on the weighted average number of shares of common stock, par value $0.01 per share (Common Stock), outstanding. Outstanding warrants and options that can be converted into Common Stock are not included, as their effect is anti-dilutive.

 

Note 3. New Accounting Pronouncements

 

In November 2004, the Financial Accounting Standard Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 151, Inventory Costs . SFAS No. 151 amends Accounting Research Bulletin No. 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be recognized as current-period charges. In addition, SFAS No. 151 requires that allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. The Company is required to adopt SFAS No. 151 beginning January 1, 2006. The Company is currently assessing the impact that SFAS No. 151 will have on its results of operations, financial position and cash flow.

 

In December 2004, the FASB issued SFAS No.123R Share-Based Payment which replaces SFAS No. 123 Accounting for Stock-Based Compensation and supersedes APB Opinion No. 25 Accounting for Stock Issued to Employees . SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values and provides that the pro forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. The original effective date for SFAS No. 123R was the first interim or annual period after June 15, 2005, with early adoption encouraged. On April 21, 2005, the Securities and Exchange Commission amended Rule 4-01(a) under Regulation S-X to provide that each registrant that is not a small business issuer is required to comply with SFAS No. 123R beginning with the first annual or interim reporting period of the registrant’s first fiscal year beginning on or after June 15, 2005. In the Company’s case, this means that compliance is required beginning in the first quarter of fiscal year 2006.

 

The pro forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. Under SFAS No. 123R, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the

 

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transition method to be used at date of adoption. The transition methods include prospective and retroactive adoption options. The Company is evaluating the requirements of SFAS No. 123R. However, the Company expects that the adoption of SFAS No. 123R will not have a material impact on its results of operations and earnings per share. The Company has not yet determined the method of adoption or the effect of adopting SFAS No. 123R, and it has not determined whether the adoption will result in amounts that are similar to the current pro forma disclosures under SFAS No. 123. The Company also has not yet determined the impact of SFAS No. 123R, if any, on its compensation policies or plans.

 

In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary Assets. SFAS No. 153 amends APB No. 29, Accounting for Nonmonetary Transactions, to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The Company was required to adopt SFAS No. 153, on a prospective basis, for nonmonetary exchanges after June 15, 2005 SFAS No. 153 has not had an impact on the Company’s results of operations or financial position.

 

Note 4. Fair Value Accounting for Stock Plans

 

The Company has long-term compensation plans that permit the granting of incentive awards in the form of stock options. The Company had adopted the disclosure-only provisions of Statement of Financial Accounting Standard No. 148 (SFAS 148), which allow companies to continue to measure compensation costs for stock options granted to employees using the value-based method of accounting prescribed by APB 25. Celsion has elected to follow APB 25 and the related interpretations in accounting for its employee stock options, pending mandatory compliance with SFAS No. 123R, as discussed above.

 

The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to its stock-based employee plans:

 

     Three Months Ended June 30,

    Six Months Ended June 30,

 
     2005

    2004

    2005

    2004

 

Net loss attributable to common stockholders, as reported

   $ (2,403,925 )   $ (1,471,586 )   $ (4,607,290 )   $ (7,537,266 )

Adjust for stock-based employee compensation expense included in reported net loss

     —         (1,286,989 )     —         (1,030,684 )

Adjust for total stock-based employee compensation expense determined using the fair value-based method for all awards

     (165,941 )     1,126,794       (373,664 )     773,286  
    


 


 


 


Pro forma net loss

   $ (2,569,866 )   $ (1,631,781 )   $ (4,980,846 )   $ (7,794,664 )
    


 


 


 


Loss per share:

                                

Basic–as reported

   $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.05 )
    


 


 


 


Basic–pro forma

   $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.05 )
    


 


 


 


 

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Note 5. Investment in Celsion China, Ltd.

 

We formed a joint venture to develop our technologies and distribute our products in greater China with Asia Pacific Life Science Group, Ltd., a group of Hong Kong-based investors. We announced the joint venture on December 15, 2003 and made a $200,000 investment to purchase a 45.65% equity position in Celsion China, Ltd on February 5, 2004.

 

The financial records of Celsion China, Ltd. as of June 30, 2005 and December 31, 2004 reflected the following:

 

     June 30,
2005


    December 31,
2004


 

Cash

   $ 128,802     $ 289,551  

Deposits

                

Prepaid expense

     13,029       1,602  
    


 


Total current assets

     141,831       291,153  

Fixed assets, net

     375       375  
    


 


Total assets

     142,206     $ 291,528  
    


 


Liabilities

             52,369  

Equity

     441,160       441,136  

Accumulated deficit

     (298,954 )     (201,977 )
    


 


Total liabilities and equity

   $ 142,206     $ 291,528  
    


 


 

Celsion accounts for the investment in Celsion China, Ltd. under the equity method, The investees’ functional currency is the Hong Kong Dollar. No foreign currency adjustment was necessary during the quarter. The loss from this unconsolidated investee at June 30, 2005 and December 31, 2004 can be recalculated as follows and is comprised of only general and administrative costs. Celsion China, Ltd. had no commercial sales for the quarter.

 

     June, 30,
2005


   

June 30,

2004


 

Quarterly deficit

   $ (50,939 )   $ (29,949 )

Ownership percentage

     45.65 %     45.65 %
    


 


Loss recorded for the quarter

   $ (23,253 )   $ (13,672 )
    


 


 

Celsion Corporation’s balance sheets at June 30, 2005 and December 31, 2004 reflects the investment in Celsion China in the account entitled “Investment in Celsion China, Ltd.,” the components of which are as follows:

 

     June 30,
2005


    December 31,
2004


 

Initial cash investment

   $ 200,000     $ 200,000  

45.65% accumulated loss

     (136,472 )     (92,203 )
    


 


Net investment carrying value

   $ 63,528     $ 107,797  
    


 


 

Note 6. Licensing Agreement

 

The Distribution Agreement dated January 21, 2003 between Celsion Corporation and Boston Scientific Corporation (BSC or Boston Scientific) entitled Celsion to a $4,000,000 licensing fee, effective upon the occurrence of certain events, in return for granting BSC a seven-year, royalty-free, exclusive right to market, distribute, import, export, use, sell and offer to sell Celsion’s Prolieve Thermodilatation system worldwide, with the exception of China, Taiwan, Hong Kong, Macao, Mexico and Central and South America. All of the conditions were met, and we received cash from BSC during the quarter ended March 31, 2004 in the amount of $2,000,000. The remaining $2,000,000 was placed in an escrow account, pursuant to the terms of the Distribution Agreement. The escrow is designed to provide available funds for payment in the event of certain contingencies occurring during the 36-month

 

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term of the escrow. The escrow is held in an interest-bearing account, with interest accruing for the benefit of Celsion, but subject to the escrow. All amounts held in the account at the end of the term of the escrow are payable to Celsion. However, Celsion bears full responsibility for payment of claims subject to the escrow in excess of available escrowed funds. The Company is recognizing the licensing fee ratably, at the rate of approximately $47,600 per month, over the seven-year term of the Distribution Agreement.

 

Note 7. Inventory

 

Inventory is comprised of Prolieve Thermodilatation system control units, parts inventory and associated disposable treatment kits. Inventory is stated at the lower of cost or market. Inventory on hand at June 30, 2005 and December 31, 2004 was as follows:

 

    

June 30,

2005


   December 31,
2004


Materials

   $ 527,133    $ 739,645

Work-in-process

     —        —  

Finished Goods

     3,447,818      1,615,402
    

  

       3,974,951      2,355,047

Less: reserve

     25,000      153,384
    

  

     $ 3,949,951    $ 2,201,663
    

  

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward-Looking Statements

 

Statements and terms such as “expect”, “anticipate”, “estimate”, “plan”, “believe” and words of similar import regarding the Company’s expectations as to the development and effectiveness of its 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 its knowledge of our 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, 2004, as well as its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, including, without limitation, unforeseen changes in the course of research and development activities and in clinical trials; possible changes in cost and timing of development and testing, capital structure, and other financial items; changes in approaches to medical treatment; introduction of new products by others; possible acquisitions of other technologies, assets or businesses; and possible actions by customers, suppliers, competitors and regulatory authorities. These and other risks and uncertainties could cause actual results to differ materially from those indicated by such forward-looking statements, including those set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors” contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as well as those set forth below and elsewhere in this Report.

 

The discussion of risks and uncertainties set forth in this Report and in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 and in other filings with the SEC 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. We disclaim any obligation to revise or update any forward-looking statement that may be made from time to time by us or on our behalf.

 

 

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Overview

 

Celsion Corporation is a biotechnology company dedicated to furthering the development and commercialization of treatment systems for cancer and other diseases using focused heat energy in combination with other therapeutic devices, heat-activated drugs or heat-activated genes.

 

On February 19, 2004, we received premarketing approval, or a PMA, from the Food and Drug Administration, or the FDA, for our Prolieve Thermodilatation system for the treatment of Benign Prostatic Hyperplasia, or BPH, a chronic condition of enlargement of the prostate common in older men. We currently are marketing the Prolieve system under a distribution arrangement with our marketing partner, Boston Scientific Corporation.

 

Our products and product pipeline presently consist of the following products, in the indicated stages of development:

 

Product


  

Status


•      Prolieve Thermodilatation system for the treatment of BPH

   We received premarketing approval for the Prolieve system from the FDA on February 19, 2004. Since that time we have been commercializing the Prolieve system through Boston Scientific.

•      ThermoDox (Doxorubicin-laden thermo-liposome)

   We currently are conducting a single-site Phase I clinical trial in collaboration with the National Institutes of Health using ThermoDox in conjunction with radio frequency ablation in the treatment of liver cancer. We are evaluating additional study sites and expect to add one such site in China and up to two more U.S. sites in order to accelerate patient accrual. In addition, ThermoDox, in conjunction with modified Prolieve equipment, is currently the subject of a multi-site Phase I clinical trial for the treatment of prostate cancer. We continue to evaluate the feasibility of initiating studies using ThermoDox in combination with our focused microwave Adaptive Phased Array (APA) or advanced phased array radio frequency heating technology for the treatment of breast cancer.

•      Breast Cancer Treatment System

   During 2004, we terminated both branches of our pivotal Phase II trials using our advanced phase array technology in the treatment of small and late-stage breast cancer tumors. We are continuing to explore the use of ThermoDox in combination with APA or advanced phased array radio frequency technology to treat breast cancer. In addition, we are exploring possible strategic transactions and relationships involving our heat-only treatment system.

•      Cancer Repair Inhibitor (CRI)

   Pre-clinical studies at Sloan-Kettering involving our CRI technology are ongoing. We are exploring possible strategic transactions and relationships to further the development of this technology.

 

 

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Since 1995, we have generated only modest revenues and have funded our operations primarily through private placements of our equity securities. During the most recently completed fiscal year, following FDA premarketing approval of our Prolieve Thermodilatation system, we received one-time licensing fees of $4,000,000 under our agreement with Boston Scientific Corporation, the distributor of our Prolieve system. During the first six months of 2005, sales of Prolieve products generated revenues of $4,766,503 compared to $542,945 for the portion of the first six months of 2004 subsequent to FDA approval. Until such time, if any, as we are able to complete development and testing of, and gain necessary regulatory approvals for, one or more of our other products, sales of the Prolieve products will represent our only source of revenue. We presently do not have any committed sources of financing. Therefore, we are reliant on revenues from the sale of our Prolieve products, and from funds generated through the sale of our securities to fund our ongoing operations.

 

The Prolieve system consists of a microwave generator and conductors, along with a computer and computer software programs that control the focusing and application of heat (control units), plus a specially designed, one-time-use catheter kit. We expect to continue to generate revenues from sales of control units and catheter kits. Under our agreement with Boston Scientific, we are entitled to receive our costs plus 50% of “profit”—measured as the difference between such costs and the average selling price (determined in accordance with the agreement) for each control unit—and 50% of the revenue generated from the sale of catheter kits, for which Celsion bears the cost of goods sold. During the introduction of the Prolieve system, we expect that sales of both control units and catheter kits will increase. However, over time we expect that sales will level off.

 

Our principal costs consist of the following:

 

    Cost of sales, relating to the production and sale of Prolieve control units and catheter kits, which are being marketed by Boston Scientific under a seven-year agreement (expiring in 2011);

 

    Research and development costs, including licensing fees due in connection with various of our technologies; the costs of sponsored research and pre-clinical and clinical trials for our ThermoDox plus heat and Cancer Repair Inhibitor systems and certain ongoing studies related to our Prolieve system, including the costs of contracting with Contract Research Organizations (CROs) for the management of our clinical trials, which costs are directly related to the number and size of ongoing studies; and the costs of development and design of other products and equipment; and

 

    Corporate overhead.

 

Our research and development activities, pre-clinical tests and clinical trials and, ultimately, the manufacturing, marketing and labeling of each of our products, are subject to extensive regulation by the FDA. We may not bring to market any product until we have received permission to do so, in the form of a premarketing approval, from the FDA. As we believe we are best suited to conduct or oversee basic research and development activities, to pursue a prototype product through clinical testing and regulatory approval, and to engage in initial manufacturing and marketing activities during product launch, we do not intend to engage in large-scale manufacturing with respect to our products. Instead, for the foreseeable future, we intend generally to outsource the manufacture of final commercial products, components and disposables, as well as the marketing of our products. Therefore, in connection with the approval and commercialization of each product, we will be required to identify and negotiate production and marketing arrangements with third parties, as we have done in connection with our Prolieve system.

 

During the second quarter of 2004, Celsion received a warning letter from the FDA regarding the Phase I and Phase II clinical trials of the Prolieve system, which had been completed in January 2002. Following receipt of the warning letter, Celsion retained consultants to assist in bringing the Company into compliance with FDA regulations and ensuring ongoing compliance with those regulations. While we could incur additional expenditures

 

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of this nature during 2005, we do not expect that such expenditures will be material. In addition, in order to ensure prompt and continuing compliance with FDA regulations in the conduct of our clinical trials, we have elected to replace our in-house monitoring staff with Contract Research Organizations (CROs). This outsourcing effort will significantly increase the costs of our clinical trials.

 

As of June 30, 2005 the Company had enrolled the first cohort of patients in its ThermoDox/RFA liver cancer Phase I study. Celsion, in collaboration with the National Institutes of Health, is aggressively recruiting patients eligible for enrollment in the study. The Company also is evaluating additional study sites and expects to add one such site in China and up to two more U.S. sites in order to accelerate patient accrual. The Company anticipates that enrollment in the Phase I study will be completed by the end of 2005. Celsion is currently considering whether to re-initiate its Phase I ThermoDox/modified Prolieve prostate cancer study.

 

Results of Operations

 

Comparison of Three Months Ended June 30, 2005 and Three Months Ended June 30, 2004

 

     Actual Results (Unaudited)

           
     Three Months Ended June 30,

    Change

     2005

    2004

    Dollars

    Percent

Revenue:

                          

Sales

   $ 2,896,350     $ 442,945     2,453,405     553.9

Cost of sales

     1,926,707       348,916     1,577,791     452.2
    


 


 

   

Gross margin

     969,643       94,029     875,614     931.2
    


 


 

   

Operating expenses:

                          

General and administrative

     1,071,703       367,161     704,542     191.9

Research and development

     2,485,328       1,386,258     1,099,070     79.3
    


 


 

   

Total operating expenses

     3,557,031       1,753,419     1,803,612     102.9
    


 


 

   

Loss from operations

   $ (2,587,388 )   $ (1,659,390 )   (927,998 )   55.9
    


 


 

   

Interest income

   $ 63,859     $ 58,619     5,240     8.9

 

Product sales consist of sales of our Prolieve products and are comprised of two elements – sales of control units and sales of disposable catheter kits, all to our exclusive distributor, Boston Scientific Corporation. Celsion recognizes revenues on sales of control units upon sale of such units by Boston Scientific to ultimate end users. Celsion recognizes sales of catheter kits upon shipment to Boston Scientific. Catheter kits are inventoried by Boston Scientific for ultimate sale and shipment to end users.

 

Sales for the quarter ended June 30, 2005 were $2,896,350 compared to $442,945 in the comparable quarter of 2004, representing an increase of 553.9%. The increase in revenues during the current quarter was the result of expanded distribution as the product roll out continues following PMA approval of the product on February 19, 2004. Our Prolieve system is distributed under a seven year distribution agreement with Boston Scientific Corporation through which Boston Scientific also acquired a five year option to purchase the Prolieve assets. In the event that Boston Scientific terminates or elects not to extend the distribution agreement Celsion would be required to establish alternate distribution arrangements with a potentially disruptive impact on sales. Should BostonScientific exercise its purchase option sales of Prolieve would terminate.

 

Additionally, during the quarter ended June 30, 2005, control units were shipped to Boston Scientific on a consignment basis and were placed at urologists’ offices for evaluation. Under Boston Scientific’s arrangements with end users, such units are either converted to sales or returned to Boston at the end of the evaluation period, which typically does not exceed 90 days. At June 30, 2005 a total of 202 control units (including both units sold to end users and evaluation units) were in service. In the current quarter 38 control units were sold by Boston Scientific to end users and Celsion recognized revenues on the sale of these units. There were no control unit sales during the second quarter of 2004.

 

 

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General and administration expenses increased by $704,542, or 191.9%, to $1,071,703 in the three months ended June 30, 2005 compared to $367,161 during the comparable period in 2004. The increase in such expenses during the current quarter was primarily due to adjustments in stock related compensation expense in the second quarter of 2004 due to the decreases in the market price of our Common Stock ($464,000) during that period and provision for costs related personnel matters ($248,000).

 

Research and development expenses for the three months ended June 30, 2005 of $2,485,328 were $1,099,070, or 79.3%, higher than the comparable quarter of 2004. The increase was due to several factors including a termination fee payable in connection with migration of manufacturing of catheter kits to a new supplier triggered by the approval of the new supplier by the FDA during the current quarter ($350,000), adjustments in stock related compensation expense due to the lower market price of our Common Stock ($823,000); patent expenses ($134,000); and preclinical and clinical costs associated with our liver cancer clinical studies ($214,000), offset by a reduction in clinical costs due to the closure of our heat-alone breast cancer clinical study and suspension of our prostate cancer clinical study ($215,000).

 

The increase in expenditure discussed above, although somewhat offset by the increase in revenues, resulted in an increase in the loss from operations for the three month period ended June 30, 2005 of $927,998 or 55.9%, to $2,587,388 from $1,659,390 in the comparable period during the previous fiscal year.

 

Interest income, which is reflected net of any interest expense, increased by 8.9%, or $5,240, for the quarter ended June 30, 2005 from the comparable quarter in 2004. The increase was due to higher rates of return on account balances.

 

Comparison of Six Months Ended June 30, 2005 and Six Months Ended June 30, 2004

 

     Actual Results (Unaudited)

             
     Six Months Ended June 30,

    Change

 
     2005

    2004

    Dollars

    Percent

 

Revenue:

                            

Sales

   $ 4,766,503     $ 542,945     4,223,558     777.9  

Cost of sales

     3,198,556       423,703     2,774,853     654.9  
    


 


 

     

Gross margin

     1,567,947       119,242     1,448,705     1,214.9  
    


 


 

     

Operating expenses:

                            

General and administrative

     1,838,003       1,936,549     (98,546 )   (5.1 )

Research and development

     4,703,918       5,972,342     (1,268,424 )   (21.2 )
    


 


 

     

Total operating expenses

     6,541,921       7,908,891     (1,366,970 )   (17.3 )
    


 


 

     

Loss from operations

   $ (4,973,974 )   $ (7,789,649 )   2,815,675     (36.1 )
    


 


 

     

Interest income

   $ 125,239     $ 99,614     25,625     25.7  

 

Sales for the six months ended June 30, 2005 were $4,766,503, an increase of $4,223,558, or 777.9%, compared to $542,945 in the first six months of 2004. Product sales consist of sales of our Prolieve products and are comprised of two elements – sales of control units and sales of disposable catheter kits, all to our exclusive distributor, Boston Scientific Corporation. The increase in revenues during the first six months was the result of a full selling period in 2005 compared to a partial period (commencing with grant of the PMA on February 19, 2004) in 2004, as well as the progress of commercialization and marketing efforts during the 16 months since the launch of the Prolieve system.

 

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General and administrative expenses decreased by $98,546, or 5.1%, to $1,838,003 in the six months ended June 30, 2005 compared to $1,936,549 in the six months ended June 30,2004. The decrease was primarily due to non-recurrence of expenses arising due to the approval of the Prolieve system in February 2004, principally consisting of a payment to Legg Mason for investment banking services rendered in connection with negotiation of our strategic relationship with Boston Scientific in 2003 which became due upon receipt of the PMA ($410,000), and cash bonuses paid to employees in connection with receipt of the PMA ($120,000), offset by 2004 performance bonus payments ($35,000). Additionally, a decrease in legal expenses as a result of the employment of in house counsel during the second quarter of 2004 ($83,000), changes in investor relations programs and consultants ($145,000), a reduction in American Stock Exchange listing fees, which were at a relatively high level in the first quarter of 2004 due to issuance of Common Stock in private placements and to Boston Scientific for milestone investments ($45,000), were offset by adjustments in stock related compensation expense, in the second quarter of 2004, due to decreases in the market price of our Common Stock ($464,000) during that period and provision for costs related personnel matters ($248,000).

 

Research and development expenses in the six months ended June 30, 2005 of $4,703,918 were $1,268,424, or 21.2%, lower than expenses incurred in the comparable six months of 2004. The decrease in expenses was due to the non-recurrence of expenses associated with receipt of the PMA for the Prolieve system, cash bonuses paid to employees in connection with receipt of the PMA ($503,000), offset by 2004 performance bonus payments ($127,500) and a reduction in consulting support related to development and approval of the Prolieve system ($468,000). The reduction also is attributable in part to non-recurrence of costs associated with the separation of an Executive Vice President from the Company in February 2004 ($972,000) and a reduction in clinical costs due to the closure of our heat-alone breast cancer clinical study and suspension of our prostate cancer clinical study ($375,000) offset by adjustments in stock related compensation expense, in the second quarter of 2004, due to decreases in the market price of our Common Stock ($622,000) during that period, patent expenses ($134,000) and preclinical and clinical costs associated with our liver cancer clinical studies ($214,000).

 

Liquidity and Capital Resources

 

Since inception, our expenses have significantly exceeded our revenues, resulting in an accumulated deficit of $78,824,555 at June 30, 2005. We have incurred negative cash flows from operations since our inception and have funded our operations primarily through the sale of equity securities. In addition, during the quarter ended March 31, 2004, we received aggregate payments in the amount of $8,000,000 from Boston Scientific in the form of payments for purchase of shares of our Common Stock and of licensing fees for our Prolieve system. As of June 30, 2005, we had cash of $5,315,889 and total current assets of $10,848,550 compared with current liabilities of $3,523,441 resulting in working capital of $7,325,109. As of December 31, 2004, we had $10,483,816 in cash and total current assets of $14,147,755 compared with current liabilities of $2,128,689, which resulted in working capital of $12,019,066 at the fiscal year end. Net cash used in the Company’s operating activities was $2,912,712 and $5,124,491 respectively for the three months and six months ended June 30, 2005

 

We anticipate that our available cash on hand (including revenues received from sales of Prolieve products) will be sufficient to fund our activities through February 2006. Our dependence on Prolieve revenues and on raising additional capital beyond that date will continue at least until we are able to begin marketing our other technologies. Our future capital requirements and the adequacy of our funding depend upon numerous factors, including the successful commercialization of our Prolieve system, progress in product development efforts, progress with pre-clinical studies and clinical trials, the cost and timing of production arrangements, the development of effective sales and marketing activities, the cost of filing, prosecuting, defending and enforcing intellectual property rights, competing technological and market developments and the development of strategic alliances for the marketing of our products. We will be required to obtain additional funding through equity or debt financing, strategic alliances with corporate partners and others, or through other sources not yet identified. We do not have any committed sources of additional financing, and cannot guarantee that additional funding will be available in a timely manner, on acceptable terms, or at all. If adequate funds are not available, we may be required to delay, scale back or eliminate certain aspects of our operations or attempt to obtain funds through unfavorable arrangements with partners or others that may require us to relinquish rights to certain of our technologies, product candidates, products or potential markets or which otherwise may be materially unfavorable to us. Furthermore, if we cannot fund our ongoing development and other operating requirements, particularly those associated with our obligation to conduct clinical trials under our licensing agreements, we will be in breach of our commitments under these licensing agreements and could therefore lose our license rights, which could have material adverse effects on our business.

 

 

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Under our Transaction Agreement with Boston Scientific, we have granted Boston Scientific the exclusive right to purchase the assets and technology relating to the manufacture, marketing, sale, distribution and/or research and development of products using thermal therapy for the treatment of BPH. This option is exercisable until February 2008, with the option price being calculated based on worldwide sales of the product subject to the Distribution Agreement to which Boston Scientific and Celsion are parties, subject to a minimum price of $60 million. There can be no assurance when, if ever, Boston Scientific will exercise its right to purchase. In the event that Boston Scientific does exercise its option, the Company will receive an immediate infusion of cash but will cease to receive revenues from the sale of Prolieve systems and related disposables.

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

We have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) under the supervision of our Chief Executive Officer and Chief Financial Officer as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2005, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports that Celsion files or submits under the Exchange Act is recorded, processed, summarized and reported in a timely manner. In designing, implementing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and implemented, may not be effective in all circumstances. However, we believe that our disclosure controls and procedures provide reasonable assurance of achieving the desired disclosure control objectives.

 

There have not been any significant changes in our internal controls or in other factors subsequent to the date the evaluation was completed that could significantly affect such controls and no corrective actions have been required with regard to significant deficiencies and material weaknesses.

 

PART II

OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

Not applicable.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

During the quarter ended June 30, 2005, 22,059 shares were issued to a consultant as compensation for services rendered in the value of $7,500. No other purchases or sales of securities occurred during the quarter.

 

Item 3. Defaults upon Senior Securities.

 

Not applicable.

 

 

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Item 4. Submission of Matters to a Vote of Security Holders.

 

On May 19, 2005, the Company held its Annual Meeting of Stockholders (Annual Meeting). At the Annual Meeting, the stockholders voted to elect Dr. Claude Tihon to the Board of Directors, to serve as Class I director, for a term of three years, until the Company’s annual meeting of stockholders in 2008 and until his successor is elected and shall have qualified. The results of the voting on this matter are as follows:

 

Nominee


   For

   Withhold

Claude Tihon

   127,129,242    6,075,168

 

Dr. Gary W. Pace will continue to serve as a Class II Director until expiration of his term with the election and qualification of directors at the annual meeting of stockholders in 2006. The term of the Class III Directors – Dr. Augustine Y. Cheung, Dr. Max E. Link and Dr. Kris Venkat – will expire with the election and qualification of directors at the annual meeting of stockholders in 2007.

 

At the Annual Meeting, the stockholders also voted to amend the Company’s Amended and Restated Certificate of Incorporation, as amended, to permit the Company to effect a reverse split of the Company’s common stock at ratios ranging from one-for-seven to one-for-fifteen, in the discretion of the Board of Directors, prior to the 2006 annual meeting of Stockholders . The results of voting on this matter are as follows:

 

     For

   Against

   Abstain

One-for-seven

   121,672,563    11,094,519    437,327

One-for-eight

   120,327,329    12,455,555    421,525

One-for-nine

   120,306,006    12,506,568    391,835

One-for-ten

   122,248,635    10,644,719    311,055

One-for-eleven

   120,046,261    12,778,168    379,980

One-for-twelve

   119,983,691    12,851,438    369,280

One-for-thirteen

   119,992,996    12,815,283    396,130

One-for-fourteen

   119,959,911    12,863,268    381,230

One-for-fifteen

   120,607,079    12,269,625    327,705

 

Finally, the stockholders voted to ratify the appointment of Stegman & Company as the Company’s Independent public accountants for the fiscal year ending December 31, 2005. The results of the voting on this matter are as follows:

 

Votes For

   129,191,283

Votes Against

   3,348,471

Abstentions and Non-Votes

   664,655

 

Item 6. Exhibits.

 

11    Statement Re: Computation of Earnings Per Share.
31.1    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

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SIGNATURES

 

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

 

DATE: August 9, 2005

 

CELSION CORPORATION
Registrant
By:  

/s/ Lawrence Olanoff


    Lawrence Olanoff
    President and Chief Executive Officer
By:  

/s/Anthony P. Deasey


    Anthony P. Deasey
    Chief Operating Officer and Chief Financial Officer
    (Principal Financial and Chief Accounting Officer)

 

17

Exhibit 11

 

CELSION CORPORATION

COMPUTATION OF EARNINGS PER SHARE

 

     Three Months Ended June 30,

    Six Months Ended June 30,

 
     2005

    2004

    2005

    2004

 

Net loss attributable to common stockholders

   $ (2,403,925 )   $ (1,471,586 )   $ (4,607,290 )   $ (7,537,266 )

Net (loss) income per common share*

   $ (0.01 )   $ (0.01 )   $ (0.03 )   $ (0.05 )

Weighted average shares outstanding

     160,898,206       160,302,355       160,850,846       156,764,532  

* Common stock equivalents have been excluded from the calculation of net loss per share as their inclusion would be anti-dilutive.

 

 

Exhibit 31.1

 

CELSION CORPORATION

CERTIFICATION

 

I, Lawrence Olanoff, certify that:

 

1. I have reviewed this report on Form 10-Q of Celsion Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting(as defined in Exchange Act Rules 13c - 15(f) and 15d – 15 (f)), for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the presentation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 9, 2005  

/s/ Lawrence Olanoff


    Lawrence Olanoff
    Chief Executive Officer
    Celsion Corporation

Exhibit 31.2

 

CELSION COROPRATION

CERTIFICATION

 

I, Anthony P. Deasey, certify that

 

1. I have reviewed this report on Form 10-Q of Celsion Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

5. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting(as defined in Exchange Act Rules 13c - 15(f) and 15d – 15 (f)), for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the presentation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 9, 2005  

/s/ Anthony P. Deasey


    Anthony P. Deasey
    Chief Financial Officer
    Celsion Corporation

 

 

Exhibit 32.1

 

CELSION CORPORATION

CERTIFICATION

PURSUANT TO 18 UNITED STATES CODE § 1350

 

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the period ended June 30,2005 of Celsion Corporation (the Company) filed with the Securities and Exchange Commission on the date hereof fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Lawrence Olanoff


Lawrence Olanoff
Chief Executive Officer

 

August 9, 2005

 

 

 

Exhibit 32.2

 

CELSION CORPORATION

CERTIFICATION

PURSUANT TO 18 UNITED STATES CODE § 1350

 

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the period ended June 30,2005 of Celsion Corporation (the Company) filed with the Securities and Exchange Commission on the date hereof fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Anthony P. Deasey


Anthony P. Deasey
Chief Financial Officer

 

August 9, 2005



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