LAWRENCEVILLE, N.J., Nov. 26, 2013 /PRNewswire/ -- Celsion Corporation (NASDAQ: CLSN), an oncology drug development company, announced today that it has entered into a loan agreement with Hercules Technology Growth Capital, Inc. (NYSE: HTGC) ("Hercules") that would permit up to $20 million in new capital distributable in multiple tranches with agreement from Hercules. Celsion drew the first tranche of $5 million upon closing of the loan agreement on November 25, 2013. Approximately $4 million of the proceeds were used to repay the outstanding obligations under the Company's loan agreement with Oxford Finance LLC and Horizon Technology Finance Corporation. The Company anticipates that it would use any additional funding provided under the agreement for working capital or in support of its previously announced strategic acquisition initiative, which is designed to identify new technologies and clinical stage products for its development pipeline.
"This facility strengthens our balance sheet and provides non-dilutive capital dedicated specifically to our product acquisition strategy," said Michael H. Tardugno, Celsion's President and Chief Executive Officer. "Our current cash position, $45.5 million as of September 30, 2013, is expected to provide resources sufficient to fund current operations well into the second half of 2016, which includes expenses associated with our planned pivotal Phase III HCC trial. This loan ensures the financial flexibility necessary to meet a number of key, value-driving objectives by providing the added capital and leverage to execute our M&A strategy. We appreciate the support of our new lender and their confidence in ThermoDox® and the Celsion management team."
Bryan Jadot, Managing Director at Hercules, said: "We are pleased that Celsion has selected Hercules as its financial partner for this $20 million loan facility. We have confidence in the Company's business strategy and look forward to seeing them reach critical milestones in their development, including the future clinical development plans for ThermoDox® and strategic initiative to broaden its product pipeline."
The funding is in the form of secured indebtedness bearing interest at a calculated prime-based variable rate. Payments under the loan agreement are interest only for the first twelve months after loan closing, followed by a 30-month amortization period of principal and interest through the scheduled maturity date. In conjunction with the loan agreement, Celsion issued Hercules warrants exercisable for Common Stock with 50% of the warrants issued at the loan closing and the remaining 50% issued upon Hercules funding any subsequent tranches.