Dallas, Texas 11/27/2013 (Financialstrend) – Clesion and Hercules Agree On Loan Terms
The $53.47 million market capped drug designing firm Celsion Corporation (NASDAQ:CLSN) shares moved up close to 10.7% during trading yesterday when the firm announced that it has managed to secure line of credit worth $20 million, on favorable terms from investment agency Hercules Technology Growth Capital Inc (NYSE:HTGC). These new funds would be available in staggered installments for the development stage drug maker which is focused on designing of cancer related remedies. Celsion Corporation (NASDAQ:CLSN) is already in receipt of the first installment of $5 million with which it plans to retire outstanding debt with Oxford Finance LLC and Horizon Technology Finance Corporation.
Commenting about the timeliness and the added potential created by the loan agreement, Celsion Corporation (NASDAQ:CLSN) President and Chief Executive Michael H. Tardugno has been quoted as saying, “This facility strengthens our balance sheet and provides non-dilutive capital dedicated specifically to our product acquisition strategy. 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.”
Terms of The $20 Million Loan
The secured loan will attract variable interest and will entail payment of interest for 12 months post the loan closing. The principal and accumulated interest will be paid out in equal installments for 30 months post the 12 month expiry. As security against the loan, Hercules Technology Growth Capital will be holding warrants that Celsion Corporation (NASDAQ:CLSN) has issued and can exercise 50% of the same on loan closing and the reminder 50% on releasing reminder part of the $20 million loan.