CELSION CORP - 10-Q Quarterly Report

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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 MARCH 31, 2003

or

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

For the transition period from ___________to _________

Commission file number 000-14242

CELSION CORPORATION
-------------------
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE 52-1256615
-------- -----------------
State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)

10220-I OLD COLUMBIA ROAD, COLUMBIA, MARYLAND 21046-1705
--------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code (410) 290-5390
--------------

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 No X
---- ---

AS OF MAY 14, 2003, THE REGISTRANT HAD OUTSTANDING 112,715,279 SHARES OF COMMON
STOCK, $.01 PAR VALUE.

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

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Index to Financial Statements
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Page

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Balance Sheets 3
March 31, 2003 and September 30, 2002

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Statements of Operations for the 5
Three and Six Months Ended
March 31, 2003 and 2002

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Statements of Cash Flows for the 6
Six Months Ended March 31, 2003 and 2002

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Notes to Financial Statements 7

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2

CELSION CORPORATION

BALANCE SHEETS

March 31, 2003 and September 30, 2002

ASSETS

March 31, September 30,
2003 2002
-------- ------------
(Unaudited)

Current assets:

Cash ....................................... $3,147,324 $ 928,819

Other receivables .......................... 3,747 84,493

Finished goods inventory ................... 247,001 68,210

Raw material inventory ..................... 472,754 314,371

Work in progress inventory ................. 31,856 67,027

Prepaid expenses ........................... 161,140 47,255
---------- ----------

Total current assets ................. 4,063,822 1,510,175
---------- ----------

Property and equipment - at cost:

Furniture and office equipment ............. 319,281 311,481

Laboratory and shop equipment .............. 89,354 89,354
---------- ----------

408,635 400,835

Less accumulated depreciation ........... 232,314 190,658
---------- ----------

Net value of property and equipment .. 176,321 210,177
---------- ----------

Other assets:

Deposits ................................. 23,622 23,622

Prepaid inventory development costs ...... 434,482 486,602

Patent licenses (net of amortization)..... 52,959 60,873
---------- ----------

Total other assets ............................ 511,063 571,097
---------- ----------

Total assets ...................... $4,751,206 $2,291,449
========== ==========

3

LIABILITIES AND STOCKHOLDERS' EQUITY

See accompanying notes.

4

CELSION CORPORATION

STATEMENTS OF OPERATIONS
(Unaudited)

See accompanying notes.

5

CELSION CORPORATION

STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended March 31,
--------------------------
2003 2002
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss ....................................... $(6,721,838) $(5,394,665)

Non-cash items included in net loss:

Depreciation and amortization ............... 49,569 39,091

Common stock issued for operating expenses.. 2,469,957 266,829

Legal settlement expense .................... -- 476,724

Loss on disposal of property and equipment... -- 1,825

Net changes in:

Other receivables ........................... 80,746 (1,270)

Inventories ................................. (302,003) (47,730)

Prepaid expenses ............................ (113,885) (50,102)

Other current assets ........................ -- (216,066)

Prepaid inventory development costs ......... 52,120 --

Accounts payable-trade ...................... 242,112 304,719

Other accrued liabilities.................... (71,823) 83,018
----------- -----------

Net cash used by operating activities.......... (4,315,045) (4,537,627)
----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment............. (7,800) (30,420)
----------- -----------

Net cash used by investing activities.......... (7,800) (30,420)
----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds of stock issuances..................... 6,541,350 5,588,006
----------- -----------
Net cash provided by financing activities...... 6,541,350 5,588,006
----------- -----------

NET INCREASE IN CASH ............................. 2,218,505 1,019,959

Cash at beginning of period....................... 928,819 2,510,136
----------- -----------
Cash at end of the period ........................ $ 3,147,324 $ 3,530,096
=========== ===========

See accompanying notes.

6

CELSION CORPORATION

NOTES TO FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The accompanying unaudited condensed financial statements, which
include the accounts of Celsion Corporation (the "Company"), 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-
and six-month periods ended March 31, 2003 are not necessarily indicative of the
results that may be expected for any other interim period or for the full year
ending September 30, 2003. For further information, refer to the financial
statements and notes thereto included in the Company's Annual Report on Form
10-K/A for the fiscal year ended September 30, 2002.

Note 2. Common Stock Outstanding and Per Share Information

For the three- and six-month periods ended March 31, 2003 and 2002,
per share data is based on the weighted average number of shares of common stock
outstanding. Outstanding warrants and options which can be converted into common
stock are not included, as their effect is anti-dilutive.

Note 3. New Accounting Pronouncements

In August 2001, the Financial Accounting Standard Board ("FASB")
approved Statement of Financial Accounting Standards ("SFAS") No. 143,
"Accounting for Asset Retirement Obligations." SFAS No. 143 addresses the
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002.
The adoption of SFAS No. 143 did not have a significant impact on the Company's
financial condition or results of operations

In October 2001, the FASB approved SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets," which supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" and the accounting and reporting provisions of APB No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions" for the disposal of a segment of a business. SFAS No.
144 retains many of the fundamental provisions of SFAS No. 121, but resolves
certain implementation issues associated with that Statement. SFAS No. 144 is
effective for the Company beginning in fiscal 2003. The adoption of SFAS No. 144
has not had a significant impact on the Company's financial condition or results
of operations.

In July 2002, the FASB approved SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities. " SFAS No. 146 addresses the
financial accounting and reporting for obligations associated with an exit
activity, including restructuring, or with a disposal of long-lived assets. Exit
activities include, but are not limited to, eliminating or reducing product
lines, terminating employees and contracts and relocating plant facilities or
personnel. SFAS No. 146 specifies that a company will record a liability for a
cost associated with an exit or disposal activity only when that liability is
incurred and can be measured at fair value. Therefore, commitment to an exit
plan or a plan of disposal expresses only management's intended future actions
and, therefore, does not meet the requirement for recognizing a liability and
the related expense. SFAS No. 146 is effective prospectively for exit or
disposal activities initiated after December 31, 2002. The Company does not
anticipate that the adoption of SFAS No. 146 will have a material effect on its
financial position or results of operations.

7

In December 2002, FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure" (SFAS No. 148) which
amends Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation - Transition and Disclosure" (SFAS No. 123). SFAS No.
148 provides alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee compensation and
requires disclosures in annual and interim financial statements of the effects
of stock-based compensation as reflected below.

Note 4. Fair Value Accounting for Stock Plans

The Company continues to account for its stock option and employee
stock purchase plans under the recognition and measurement principles of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations. No stock-based employee compensation
expense related to the Company's stock option and stock purchase plans is
reflected in net loss, as all options granted under those plans had an exercise
price equal to the market value of the underlying common stock on the date of
grant. The following table illustrates the effect on net loss and loss per share
if the Company had applied the fair value recognition provisions of SFAS No. 123
to stock-based employee compensation.

8

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 its products, and other aspects of its present and future
business operations, constitute forward- looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Although the Company
believes that its expectations are based on reasonable assumptions within the
bounds of its knowledge of its business and operations, the Company cannot
guarantee that actual results will not differ materially from its expectations.
In evaluating such statements, readers should specifically consider the various
factors contained in the Company's Annual Report on Form 10-K/A for the fiscal
year ended September 30, 2002, 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 Company's Annual Report on Form
10-K/A for the fiscal year ended September 30, 2002, as well as those set forth
below and elsewhere in this Report.

GENERAL

Since inception, the Company has incurred substantial operating losses.
The Company expects operating losses to continue and possibly increase in the
near term and for the foreseeable future as it continues its product development
efforts, conducts clinical trials and undertakes marketing and sales activities
for new products. The Company's ability to achieve profitability is dependent
upon its ability successfully to integrate new technology into its thermotherapy
systems, conduct clinical trials, obtain governmental approvals, and
manufacture, market and sell its new products. Major obstacles facing the
Company over the last several years have included inadequate funding, a negative
net worth, and the slow development of the thermotherapy market due to technical
shortcomings of the thermotherapy equipment available commercially. The Company
has not continued to market its older thermotherapy system, principally because
of the system's inability to provide heat treatment for other than surface and
sub-surface tumors, and has concentrated its efforts on a new generation of
thermotherapy products.

RESULTS OF OPERATIONS

Comparison of Three Months Ended March 31, 2003
and Three Months Ended March 31, 2002

There were no product sales for the three months ended March 31, 2003
and 2002. No product revenues are expected until the Company's equipment
incorporating new technologies receives the necessary approvals from
governmental regulatory agencies and the Company begins to market such
equipment. The new equipment is currently in pivotal Phase II clinical testing.

General and administrative expense decreased by 43% to $1,141,021 for
the three months ended March 31, 2003, from $1,998,406 for the comparable period
in 2002. The decrease of $857,385 was primarily due to the fact that, in the
quarter ended March 31, 2002, the Company incurred costs associated with
settlement of its then ongoing lawsuit with Warren C. Stearns and his
associates. Under the terms of the settlement, Celsion issued to the Stearns
group certain common stock purchase warrants that were at issue in the
litigation, together with additional warrants as compensation for relinquishment
of certain anti-dilution rights under the disputed warrants and $265,000 in cash
to reimburse Stearns for costs incurred up to the settlement date. In addition,
during that quarter in 2002, the

9

Company accrued remaining amounts due to Spencer J. Volk, its former President
and Chief Executive Officer, under the terms of the agreement governing his
retirement. Finally, during the quarter ended March 31, 2002, the Company
incurred consulting costs related to the exploration of the feasibility of
setting up a business in China (including Hong Kong, Taiwan and Macao). Such
expenses were non-recurring items.

Research and development expense increased by 108% to $3,652,560 for
the current quarter from $1,759,775 for the three months ended March 31, 2002.
The increased expenditure was the result of a payment of $2,175,014 to Duke
University pursuant to an obligation under the License Agreement between the
Company and Duke University. This obligation was satisfied by the issuance of
3,805,366 shares of the Company's common stock to Duke University on January 16,
2003.

The net increase in expenditures discussed above resulted in an
increase in the loss from operations for the three month period ended March 31,
2003 of $1,035,400 to $4,793,581 from $3,758,181 in the comparable period during
the prior fiscal year.

Interest income net of interest expense decreased by $12,158 to $6,564
for the quarter ended March 31, 2003 due to a combination of lower average cash
balances and lower average interest rates. Preferred stock dividends increased
by $30,239 to $52,553 for the quarter ended March 31, 2003 due to the issuance
of 2,000 shares of Series B 8% Convertible Preferred Stock during the quarter
ended June 30, 2002.

Comparison of Six Months Ended March 31, 2003
and Six Months Ended March 31, 2002

There were no product sales for the six months ended March 31, 2003 and
2002. No product revenues are expected until the Company's equipment
incorporating new technologies receives the necessary approvals from
governmental regulatory agencies and the Company begins to market such
equipment. The new equipment is currently in pivotal Phase II clinical testing.

General and administrative expense decreased by 22% to $1,981,065 for
the six months ended March 31, 2003, from $2,539,653 for the comparable period
in 2002. The decrease of $558,588 was primarily due to the fact that, during the
six months ended March 31, 2002, the Company incurred costs associated with
settlement of its then ongoing lawsuit with Warren C. Stearns and his
associates. Under the terms of the settlement, Celsion issued to the Stearns
group certain common stock purchase warrants that were at issue in the
litigation, together with additional warrants as compensation for relinquishment
of certain anti-dilution rights under the disputed warrants and $265,000 in cash
to reimburse Stearns for costs incurred up to the settlement date. In addition
during that six-month period in 2002, the Company accrued remaining amounts due
to Spencer J. Volk, its former President and Chief Executive Officer, under the
terms of the agreement governing his retirement. Finally, during the six months
ended March 31, 2002, the Company incurred consulting costs related to the
exploration of the feasibility of setting up a business in China (including Hong
Kong, Taiwan and Macao). Such expenses were non-recurring items.

Research and development expense increased by 65% to $4,749,988 for the
current six-month period from $2,882,996 for the six months ended March 31,
2002. The increased expenditure was the result of a payment of $2,175,014 to
Duke University pursuant to an obligation under the License Agreement between
the Company and Duke University. This obligation was satisfied by the issuance
of 3,805,366 shares of the Company's common stock to Duke University on January
16, 2003.

The net increase in expenditures discussed above resulted in an
increase in the loss from operations for the six-month period ended March 31,
2003 of $1,308,404 to $6,731,053 from $5,422,649 in the comparable period during
the prior fiscal year.

Interest income net of interest expense decreased by $20,594 to $9,215
for the six-month period ended March 31, 2003 due to a combination of lower
average cash balances and lower average interest rates. Preferred stock
dividends increased by $60,602 to $105,866 for the six-month period ended March
31, 2003 due to the issuance of 2,000 shares of Series B 8% Convertible
Preferred Stock during the quarter ended June 30, 2002.

10

LIQUIDITY AND CAPITAL RESOURCES

Since inception, our expenses have significantly exceeded our revenues,
resulting in an accumulated deficit of $50,647,787 at March 31, 2003. We have
incurred negative cash flows from operations since our inception and have funded
our operations primarily through the sale of equity securities. As of March 31,
2003, we had cash of $3,147,324 and total current assets of $4,063,822, compared
with current liabilities of $945,249, resulting in a working capital surplus of
$3,118,573. As of September 30, 2002, we had $928,819 in cash and total current
assets of $1,510,175, compared with current liabilities of $774,959, which
resulted in a working capital surplus of $735,216 at fiscal year end. Net cash
used in the Company's operating activities was $4,315,045 for the six months
ending March 31, 2003.

On October 15, 2002, Celsion completed a private placement resulting in
net proceeds of approximately $775,000 and, on November 12, 2002, Celsion
completed a private placement generating approximately $300,000 in net proceeds.
On December 31, 2002, we received further funding through a private placement of
$425,000 and issuance of a note in the amount of $500,000 payable to Boston
Scientific Corporation.

During the six months ended March 31, 2003, we have expended
approximately $6,731,053 for clinical testing of our breast cancer and Benign
Prostatic Hyperplasia (BPH) treatment systems, as well as corporate overhead.
For all of fiscal year 2003, we expect to expend a total of approximately
$8,500,000 for such clinical testing and overhead, which we expect to fund from
our current resources. The foregoing amounts are estimates based upon
assumptions as to the availability of funding, the scheduling of institutional
clinical research and testing personnel, the timing of clinical trials and other
factors, not all of which are fully predictable. Accordingly, estimates and
timing concerning projected expenditures and programs are subject to change.

On January 21, 2003, Celsion reached an agreement with Boston
Scientific Corporation under which Boston Scientific will market and distribute
the Company's BPH treatment system. In connection with this agreement, Boston
Scientific purchased 9,375,354 shares of Celsion common stock for an initial
investment of $5,000,000 and agreed to invest an additional $10 million in a
combination of equity and licensing fees upon Celsion meeting certain
milestones. The initial investment was sufficient to repay the $500,000 note
issued to Boston Scientific on December 31, 2002 and is expected to be
sufficient to fund the Company's operations through the end of fiscal year 2003.
Further investments by Boston Scientific would contribute to Celsion's funding
requirements for the future. Our dependence on raising additional capital will
continue at least until we are able to begin marketing our new technologies. Our
future capital requirements and the adequacy of our financing depend upon
numerous factors, including the successful commercialization of our Microwave
Uretheroplasty(TM) and breast cancer treatment systems, progress in other
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 such 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 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not applicable.

11

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-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) under
the supervision of our Chief Executive Officer and Chief Financial Officer as of
an evaluation date within 90 days prior to the filing date of this Quarterly
Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that, as of the evaluation date, 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.
Since the evaluation date referred to above, there have not been any significant
changes in our internal controls or in other factors 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.

There are currently no legal proceedings that are not within the
normal course of business.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

During the fiscal quarter ended March 31, 2003, the Company issued the
following securities without registration under the Securities Act of 1933, as
amended (the "Securities Act"):

On January 16, 2003, the Company issued 3,805,366 shares of
its common stock to Duke University pursuant to the License
Agreement between the Company and Duke University. These
shares were valued at $2,175,014. On January 21, 2003, the
Company issued 9,375,354 shares of its common stock to Boston
Scientific Corporation for a cash consideration of $5,000,000
pursuant to the Transaction Agreement between the Company and
Boston Scientific Corporation. These shares are restricted
stock, endorsed with the Company's standard restricted legend,
with stop transfer instructions recorded by the transfer
agent. Accordingly, the Company views the shares issued as
exempt from registration under Sections 4(2) and/or 4(6) of
the Securities Act.

During the quarter, the Company issued a total of 514,489
shares of its common stock to the holders of shares of its
Series B 8% Convertible Preferred Stock upon conversion of
such Convertible Preferred Stock. These shares are restricted
stock, endorsed with the Company's standard restricted stock
legend, with a stop transfer instruction recorded by the
transfer agent. Accordingly, the Company views the shares
issued as exempt from registration under Sections 4(2) and/or
4(6) of the Securities Act.

During the quarter, from time to time the Company also issued
a total of 386,192 shares of its common stock to five outside
consultants for services valued at $162,000. These shares are
restricted stock, endorsed with the Company's standard
restricted stock legend, with stop transfer instructions
recorded by the transfer agent. Accordingly, the Company views
the shares issued as exempt from registration under Sections
4(2) and/or 4(6) of the Securities Act.

At various times during the quarter, the Company issued a
total of 843,000 shares of its common stock for a cash
consideration of $ 33,700 to holders of stock purchase
warrants and options upon exercise of such stock purchase
warrants and options. These shares are restricted stock,
endorsed with the Company's standard restricted stock legend,
with stop transfer instructions recorded by the transfer
agent. Accordingly, the Company views the shares issued as
exempt from registration under Sections 4(2) and/or 4(6) of
the Securities Act.

12

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On February 18, 2003, the Company held its Annual Meeting of
Stockholders (the "Annual Meeting"). At the Annual Meeting, the stockholders
voted to elect Dr. Gary W. Pace to the Board of Directors, to serve as a Class
II director for a term of three years, until the Company's annual meeting of
stockholders in 2006 and until his successor is elected and shall have
qualified. The results of the voting on this matter are as follows:

Votes For .................................... 78,182,047
Votes Withheld ............................... 711,095

In addition, at the Annual Meeting, stockholders voted to ratify the
appointment of Stegman & Company as the Company's Independent Public Accountants
for the fiscal year ending September 30, 2003. The results of the voting on this
matter are as follows:

Votes For:.................................... 78,728,584
Votes Against:................................ 120,578
Abstentions and Broker Non-Votes.............. 43,980

ITEM 5 OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits.

11 Computation of per share earnings.

99.1 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.

99.2 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.

(b) Reports on Form 8-K.

(1) On January 22, 2003, the Company filed with the SEC a
Current Report on Form 8-K reporting, under Item 5, that,
effective January 21, 2003, it had entered into a strategic
partnership, including a Transaction Agreement and a
Distribution Agreement, with Boston Scientific Corporation
for the distribution of the Company's Microwave BPH 800
Urethroplasty(TM) System and its component parts for the
treatment of benign prostatic hyperplasia, together with
agreements regarding licensing payments and equity
investments by Boston Scientific and the grant of an option
to Boston Scientific to purchase the Company's BPH business
under certain circumstances. Copies of the Distribution
Agreement, the Transaction Agreement and a press release
describing the matters covered by the Report on Form 8-K
were included as Exhibits thereto.

13

(2) On March 28, 2003, the Company filed with the SEC a Current
Report on Form 8-K reporting, under Item 5, that on March
27, 2003, the Company released to its stockholders a letter
(included as an Exhibit to the Current Report) regarding the
status of its business and the development of its products.

14

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: May 14, 2003

CELSION CORPORATION
-------------------
Registrant

By: /s/ Augustine Y. Cheung
-----------------------
Augustine Y. Cheung
President and Chief Executive
Officer

By: /s/Anthony P. Deasey
-----------------------
Anthony P. Deasey
Executive Vice President-Finance
and Administration
(Principal Financial and Chief
Accounting Officer)
15

CERTIFICATION

I, Augustine Y. Cheung, certify that:

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

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a. Designed such disclosure controls and procedures 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 quarterly
report is being prepared;

b. Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a. All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b. Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: May 14, 2003

By: /s/Augustine Y. Cheung
----------------------------
Augustine Y. Cheung
President and Chief
Executive Officer

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CERTIFICATION

I, Anthony P. Deasey, certify that:

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

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a. Designed such disclosure controls and procedures 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
quarterly report is being prepared;

b. Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and

c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

a. All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b. Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: May 14, 2003

By: /s/Anthony P. Deasey
------------------------------
Anthony P. Deasey
Executive Vice President--Finance
Administration and Chief
Financial Office

17