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Notes and Loans Payable

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Notes and Loans Payable

Note 10. Notes and Loans Payable

Horizon Credit Agreement

On June 27, 2018, the Company entered the Horizon Credit Agreement. The Company drew down $10 million upon closing of the Horizon Credit Agreement on June 27, 2018.

During the three-month period ended June 30, 2020, the Company incurred $243,299 in interest expense and amortized $96,727 as interest expense for debt discounts and end of term charges in connection with the Horizon Credit Agreement. During the three-month period ended June 30, 2019, the Company incurred $255,182 in interest expense and amortized $94,266 as interest expense for debt discounts and end of term charges in connection with the Horizon Credit Agreement.

During the six-month period ended June 30, 2020, the Company incurred $486,597 in interest expense and amortized $192,793 as interest expense for debt discounts and end of term charges in connection with the Horizon Credit Agreement. During the six-month period ended June 30, 2019, the Company incurred $508,471 in interest expense and amortized $191,724 as interest expense for debt discounts and end of term charges in connection with the Horizon Credit Agreement.

Following is a schedule of future principal payments, net of unamortized debt discounts and amortized end of term charges, due on the Horizon Credit Agreement:

		As of June 30,
2021		$	4,583,336
2022			5,000,000
2023			416,664
2024 and thereafter			-
Subtotal of future principal payments			10,000,000
Unamortized debt issuance costs, net			(3,530	)
Total		$	9,996,470

Paycheck Protection Program

On April 23, 2020, we entered into a loan agreement with Silicon Valley Bank (the “April PPP Loan”), pursuant to the Paycheck Protection Program (the “PPP”), established pursuant to the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). We thereafter received proceeds of $632,220 under the April PPP Loan. The April PPP Loan application required Celsion to certify that there was economic uncertainty surrounding the Company and that, as such, the April PPP Loan was necessary to support our ongoing operations. Celsion made this certification in good faith after analyzing, among other things, its financial situation and access to alternative forms of capital, and believed that the Company satisfied all eligibility criteria for the April PPP Loan, and that our receipt of the April PPP Loan proceeds was consistent with the broad objectives of the PPP of the CARES Act. The certification given with respect to the April PPP Loan did not contain any objective criteria and was subject to interpretation. Considering subsequent guidance issued by the SBA in consultation with the U.S. Department of the Treasury at that time, out of an abundance of caution we returned the proceeds of the PPP Loan in full on May 13, 2020.

Shortly after the April PPP Loan was repaid, the SBA provided further guidance with respect to these certifications providing a safe harbor under which companies such as Celsion with PPP loans of less than $2 million will be deemed to have made these certifications in good faith. Therefore, as the Company continued to believe it qualifies for a loan under the PPP, it reapplied for and eventually received the new PPP Loan for $692,530 on May 26, 2020 (the “May PPP Loan”). The May PPP Loan was guaranteed by the SBA and evidenced by a promissory note of the Company dated May 26, 2020 (the “Note”) in the principal amount of $692,530 payable to the lender. Pursuant to the terms of the Note, was payable in part or in full, at any time, without penalty. On June 22, 2020, as disclosed in the Company’s Current Report on Form 8-K filed on the same date, the Company commenced an offering of 2,666,667 shares of its common stock which closed on June 24, 2020 (Note 11) and received net proceeds of approximately $9.1 million. In light of the proceeds received from this equity offering, the Company elected to repay the May PPP Loan in full (including interest accrued of $577) on June 24, 2020, terminating all obligations of the Company under the Note.