UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 2005
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ____________ to ____________
Commission file number: 001-16133
DELCATH SYSTEMS, INC.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 06-1245881
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1100 Summer Street, 3rd Floor, Stamford, CT 06905
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(Address of Principal Executive Offices)
(203) 323-8668
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(Issuer's Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 a shell company (as defined in
Rule 12b-2 of the Exchange Act. Yes [ ] No [X]
As of November 2, 2005, 16,640,896 shares of the Issuer's common stock, $0.01
par value, were issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
DELCATH SYSTEMS, INC.
Index
Page No.
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Part I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (Unaudited)
Condensed Balance Sheet - September 30, 2005 3
Condensed Statements of Operations for the Three and Nine Months Ended 4
September 30, 2005 and 2004 and Cumulative from Inception
(August 5, 1988) to September 30, 2005
Condensed Statements of Cash Flows for the Nine Months Ended 5
September 30, 2005 and 2004 and Cumulative from Inception
(August 5, 1988) to September 30, 2005
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
Item 3. Controls and Procedures 11
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
Signatures 13
Delcath Systems, Inc.
(A Development Stage Company)
Condensed Balance Sheet
(Unaudited)
September 30, 2005
Assets
Current assets:
Cash and cash equivalents $ 862,434
Certificates of deposit 7,047,077
Interest receivable 135,804
Prepaid insurance 2,170
----------------
Total current assets 8,047,485
Furniture and fixtures, net 9,062
----------------
Total assets $ 8,056,547
================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 222,219
----------------
Total current liabilities 222,219
----------------
Stockholders' equity
Common stock 166,409
Additional paid-in capital 32,822,631
Deficit accumulated during development stage (25,154,712)
----------------
Total stockholders' equity 7,834,328
----------------
Total liabilities and stockholders'
equity $ 8,056,547
================
See accompanying notes to condensed financial statements
3
Delcath Systems, Inc.
(A Development Stage Company)
Condensed Statements of Operations for the Three and Nine Months Ended
September 30, 2005 and 2004 and Cumulative from Inception (August 5, 1988)
to September 30, 2005
(Unaudited)
Cumulative
From Inception
Three Months Ended Nine Months Ended (August 5, 1988)
September 30, September 30, to
2005 2004 2005 2004 September 30, 2005
----------------------------------- ------------------------------- -------------------
Costs and expenses:
General and administrative expense $ 309,820 $ 206,975 $ 1,017,223 714,263 8,088,084
Research and development costs 395,332 644,854 1,329,499 1,717,028 16,645,728
------------------------------------ ------------------------------ -------------------
Total costs and expenses 705,152 851,829 2,346,722 2,431,291 24,733,812
------------------------------------ ------------------------------ -------------------
Operating loss (705,152) (851,829) (2,346,722) (2,431,291) (24,733,812)
Other income (expense):
Interest income 61,399 23,577 162,558 66,880 1,249,178
Interest expense - - - - (171,473)
------------------------------------ ------------------------------- -------------------
Net loss $ (613,753) (828,252) (2,184,164) (2,364,411) (23,656,107)
=================== =============== =============== =============== ===================
Common share data:
Basic and diluted loss
per share $ (0.04) $ (0.07) $ (0.14) $ (0.22)
=================== =============== =============== ===============
Weighted average number
of shares of common 16,143,367 11,616,406 5,667,028 10,983,188
=================== =============== =============== ===============
stock outstanding
See accompanying notes to condensed financial statements
4
DELCATH SYSTEMS, INC.
(A Development Stage Company)
Condensed Statements of Cash Flows for the Nine Months Ended September 30,
2005 and 2004 and Cumulative fromInception (August 5, 1988) to
September 30, 2005 (Unaudited)
Cumulative
Nine Months Ended from inception
September 30, (August 5, 1988)
2005 2004 to September 30, 2005
----------------------------- --------------------
Cash flows from operating activities:
Net loss $ (2,184,164) $ (2,364,411) $ (23,656,107)
Adjustments to reconcile net
loss to net cash used in operating
activities Stock option expense -
consultants 8,270 5,222 2,533,662
Stock compensation expense issued to
management, consultants, and directors
for services 103,425 - 339,711
Depreciation expense 4,544 4,012 36,236
Amortization of organization costs - - 42,165
Changes in assets and liabilities:
Decrease in prepaid expenses 45,646 30,284 (2,170)
(Increase) in interest receivable (102,918) (30,523) (135,802)
(Decrease) increase in accounts
payable and accrued expenses (342,407) 213,996 222,218
----------------------------- --------------------
Net cash used in operating activities (2,467,604) (2,141,420) (20,620,086)
----------------------------- --------------------
Cash flows from investing activities:
Purchase of furniture and fixtures - (5,347) (45,300)
Purchase of short-term investments (3,047,077) (2,000,000) (14,016,781)
Proceeds from maturities of short-term
investmen 3,055,129 1,014,575 6,969,704
Organization costs - - (42,165)
----------------------------- --------------------
Net cash provide by (used in)
investing activities 8,052 (990,772) (7,134,542)
----------------------------- --------------------
Cash flows from financing activities:
Net proceeds from sale of stock and
exercise of stock options and warrants 3,119,651 3,739,167 27,462,736
Repurchases of outstanding common stock - - (51,103)
Dividends paid - - (499,535)
Proceeds from short-term borrowings - - 1,704,964
----------------------------- --------------------
Net cash provided by
financing activities 3,119,651 3,739,167 28,617,062
----------------------------- --------------------
Increase in cash and cash equivalents 660,098 606,975 862,434
Cash and cash equivalents at beginning of
period 202,335 313,615 -
----------------------------- --------------------
Cash and cash equivalents at end of period $ 862,434 $ 920,590 $ 862,434
============================= ====================
Cash paid for interest $ - $ - $ 171,473
============================= ====================
Supplemental disclosure of non-cash
activities:
Conversion of debt to common stock $ - $ - $1,704,964
============================= ====================
Common stock issued for preferred stock
dividends $ - $ - $ 999,070
============================= ====================
Conversion of preferred stock to
common stock $ - $ - $ 24,167
============================= ====================
Common stock issued as compensation
for stock sale $ - $ - $ 510,000
============================= ====================
See accompanying notes to condensed financial statements
5.
Delcath Systems, Inc.
(A Development Stage Company)
Notes to Condensed Financial Statements
Note 1: Description of Business
Delcath Systems, Inc. (the "Company") is a development stage company which was
founded in 1988 for the purpose of developing and marketing a proprietary drug
delivery system capable of introducing, and removing, high dose chemotherapy
agents to a diseased organ while greatly inhibiting their entry into the general
circulation system. It is hoped that the procedure will result in a meaningful
treatment for cancer. In November 1989, the Company was granted an IDE
(Investigational Device Exemption) and an IND (Investigational New Drug) for its
product by the FDA (Food and Drug Administration). The Company is seeking to
complete clinical trials in order to obtain separate FDA pre-market approvals
for the use of its delivery system using doxorubicin and melphalan,
chemotherapeutic agents, to treat malignant melanoma that has spread to the
liver.
Note 2: Basis of Presentation
The accompanying condensed financial statements are unaudited and have been
prepared by the Company in accordance with accounting principles generally
accepted in the United States of America. Certain information and footnote
disclosures normally included in the Company's annual financial statements have
been condensed or omitted. The interim financial statements, in the opinion of
management, reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair statement of the results for the interim periods ended
September 30, 2005 and 2004 and cumulative from inception (August 5, 1988) to
September 30, 2005.
The results of operations for the interim periods are not necessarily indicative
of the results of operations to be expected for the fiscal year. These interim
condensed financial statements should be read in conjunction with the audited
financial statements and notes thereto for the year ended December 31, 2004,
which are contained in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2004 as filed with the Securities and Exchange Commission.
Note 3: Research and Development Costs
Research and development costs include the costs of materials, personnel,
outside services and applicable indirect costs incurred in development of the
Company's proprietary drug delivery system. All such costs are charged to
expense when incurred.
Note 4: Stockholders' Equity
During the nine months ended September 30, 2005, the Company received net
proceeds of $43,108 ($1.022 per share) upon the exercise of 8,436 of the
Representative Unit Purchase Warrants that were issued to underwriters as part
of the 2003 public offering. This resulted in the issuance of 42,180 shares of
common stock together with a similar amount of Representative's Common Stock
Warrants. In addition, 157,180 Representative's Common Stock Warrants were
exercised ($1.28 per share) with a similar amount of common stock being issued
and receipt of net proceeds of $202,191.
The Company received a net amount of $93,600 upon the exercise of 120,000 in
stock options during the nine months ended September 30, 2005. 60,000 options
were exercised at a price of $0.71 per share and 60,000 were exercised at a
price of $0.85 per share.
6.
The Company also received during the nine months ended September 30, 2005 net
proceeds of $2,780,752 upon the exercise of 1,069,526 Series B Warrants that
were issued to institutional and accredited investors as part of a private
placement in November 2004.
The following table sets forth changes in stockholders' equity during the nine
months ended September 30, 2005:
Common Stock, $0.01 Par Value
Issued and Outstanding Deficit Accumulated
-------------------------------- Additional During
No. of shares Amount Paid in Capital Development Stage Total
------------- ------ --------------- ------------------- -----
Balance at December 31, 2004 15,215,085 $152,151 $29,605,543 $(22,970,548) $6,787,146
Issuance of common stock in
connection with the exercise of
2003 Representative's Unit
Warrants 42,180 422 42,686 43,108
Issuance of common stock in
connection with the exercise of
Representative's Common Stock
Warrants 157,180 1,572 200,619 202,191
Issuance of common stock in
connection with the exercise of
stock options 120,000 1,200 92,400 93,600
Issuance of stock options as
compensation - consultants - - 8,270 8,270
Issuance of common stock as
compensation to management,
consultants, and directors for
services 36,925 369 103,056 103,425
Issuance of common stock in
connection with the exercise of
warrants 1,069,526 10,695 2,770,057 2,780,752
Net loss for nine months ended
September 30, 2005 (2,184,164) (2,184,164)
---------- ------- ---------- ---------- ---------
Balance at September 30, 2005 16,640,896 $166,409 $32,822,631 $(25,154,712) $7,834,328
========== ======= ========== ========== =========
Note 5: Stock Option Plan
The Company has historically accounted for its employee stock option plans in
accordance with the provisions of Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
As such, compensation expense is recorded on the date of grant only if the
current fair market value of the underlying stock exceeds the exercise price.
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation" permits entities to recognize as expense over the
vesting period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income (loss) and pro
forma earnings (loss) per share disclosures for employee stock option grants as
if the fair-value-based method defined in SFAS No. 123 had been applied. The
Company has elected to continue to apply the provisions of APB Opinion No. 25
and provide the pro forma disclosure required by SFAS No. 123.
7.
On July 7, 2005, stock options totaling 460,000 shares were granted to certain
employees and directors.
The Company uses the intrinsic value method of accounting for stock options. Had
compensation cost for the Company's employee stock options plans been determined
based on the fair value at the grant dates of awards under these plans
consistent with the methodology prescribed by SFAS No. 123, the Company's net
income (or loss) would have been adjusted to reflect the following pro forma
amounts:
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
----------------------------------- ---------------------------------------
2005 2004 2005 2004
--------------- ---------------- ----------------- -----------------
Net loss, as reported $ (643,753) $ (828,252) $ (2,184,164) $ (2,364,411)
Stock-based employee
compensation expense included
in net loss, net of related
tax effects - - - -
Stock-based employee
compensation determined under
the fair value based method,
net of related tax effects (44,862) (25,392) (80,097) (76,175)
=============== ================ ================ ----------------
Pro forma net loss $ (688,615) $ (853,644) $ (2,264,261) $ (2,440,586)
======= ======= ================ ================
Loss per share (basic and diluted):
As reported $ (0.04) $ (0.07) $ (0.14) $ (0. 22)
Pro forma (0.04) (0.07) (0.14) (0. 22)
In December 2004, the FASB issued SFAS No. 123 (Revised 2004) ("SFAS No.
123(R)"), "Share-based Payment," that will require the Company to expense costs
related to share-based payment transactions with employees. With limited
exceptions, SFAS No. 123(R) requires that the fair value of share-based payments
to employees be expensed over the period service is received and eliminates the
ability to account for these instruments under the intrinsic value method
prescribed by APB No. 25 and allowed under the original provisions of SFAS No.
123. SFAS No. 123(R) becomes mandatorily effective for the Company on January 1,
2006. SFAS No. 123(R) allows for either prospective recognition of compensation
expense or retrospective recognition, which may be back to the original issuance
of SFAS No. 123 or only to interim periods in the year of adoption. The Company
is currently evaluating these transition methods and the effects to the
financial statements.
SFAS No. 123(R) allows the use of both closed form models (e.g., Black-Scholes
Model) and open form models (e.g., lattice models) to measure the fair value of
the share-based payment as long as that model is capable of incorporating all of
the substantive characteristics unique to share-based awards. In accordance with
the transition provisions of SFAS No. 123(R), the expense attributable to an
award will be measured in accordance with the Company's measurement model at
that award's date of grant.
8.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(a) Plan of Operation
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements which are subject to certain
risks and uncertainties that can cause actual results to differ materially from
those described. Factors that may cause such differences include, but are not
limited to, uncertainties relating to our ability to successfully complete Phase
III clinical trials and secure regulatory approval of our current or future
drug-delivery system and uncertainties regarding our ability to obtain financial
and other resources for any research, development and commercialization
activities. These factors, and others, are discussed from time to time in our
filings with the Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as of the date
they are made. We undertake no obligation to publicly update or revise these
forward-looking statements to reflect events or circumstances after the date
they are made.
OVERVIEW
Since our founding in 1988 by a team of physicians, we have been a development
stage company engaged primarily in developing and testing the Delcath system for
the treatment of liver cancer. A substantial portion of our historical expenses
have been for the development of our medical device and the clinical trials of
our product, and the pursuit of patents worldwide. We expect to continue to
incur significant losses from costs for product development, clinical studies,
securing patents, regulatory activities, manufacturing and establishment of a
sales and marketing organization without any significant revenues. A detailed
description of the cash used to fund historical operations is in the financial
statements and the notes thereto. Without an FDA-approved product and commercial
sales, we will continue to be dependent upon existing cash and the sale of
equity or debt to fund future activities. While the amount of future net losses
and time required to reach profitability are uncertain, our ability to generate
significant revenue and become profitable will depend on our success in
commercializing our device.
During 2001, Delcath initiated the clinical trial of the system for isolated
liver perfusion using the chemotherapeutic agent melphalan. A Phase I trial at
the National Cancer Institute marked an expansion in the potential labeled usage
beyond doxorubicin, the chemotherapeutic agent used in our initial clinical
trials. Enrollment of new patients in the Phase I trial was completed in 2003
and following the 2004 presentation and adoption of a Phase II clinical trial
protocol for three types of cancer in the liver, patients are being enrolled and
treated. This study involves patients with primary liver cancer, neuroendocrine
tumors and metastatic adenocarcinomas in the liver, including liver metastasis
from colorectal cancer.
During 2004, we commenced a Phase III clinical trial in Australia to proceed
with study of the Delcath drug delivery system for inoperable cancer in the
liver using doxorubicin. We are currently in discussions with additional sites
to expand this trial.
9.
In May 2005, Delcath announced that it received "fast-track" status from the FDA
for treating metastatic melanoma in the liver with melphalan. The FDA's
fast-track program is designed to facilitate development and expedite the review
of new drugs or, in the case of Delcath, a new drug-device combination, having
the potential to treat illnesses which currently lack adequate therapy.
Over the next 12 months, we expect to continue to incur substantial expenses
related to the research and development of our technology, including Phase III
clinical trials using doxorubicin with the Delcath system and Phase II clinical
trials using melphalan with the Delcath system. Additional funds, when
available, will be committed to pre-clinical and clinical trials for the use of
other chemotherapy agents with the Delcath system for the treatment of liver
cancer, and for the development of additional products and components. We will
also continue efforts to qualify additional sources of the key components of our
device, in an effort to further reduce manufacturing costs and minimize
dependency on a single source of supply.
Liquidity and Capital Resources
Our available funds will be sufficient to meet our anticipated needs for working
capital and capital expenditures at least through the end of 2006. The Company
is not projecting any capital expenditures that will significantly affect the
Company's liquidity during the next 12 months.
Our future liquidity and capital requirements will depend on numerous factors,
including the progress of our research and product development programs,
including clinical studies; the timing and costs of making various United States
and foreign regulatory filings; obtaining approvals and complying with
regulations; the timing and effectiveness of product commercialization
activities, including marketing arrangements overseas; the timing and costs
involved in preparing, filing, prosecuting, defending and enforcing intellectual
property rights; and the effect of competing technological and market
developments.
The Company's future results are subject to substantial risks and uncertainties.
The Company has operated at a loss for its entire history and there can be no
assurance of its ever achieving consistent profitability. The Company believes
its capital resources are adequate to fund operations for at least the next
twelve months but anticipates that it will require additional working capital
after 2006. There can be no assurance that such working capital will be
available on acceptable terms, if at all.
During the nine months ended September 30, 2005, the Company had exercises of
previously issued warrants together with exercises of stock options. Please see
Note 4 to the September 30, 2005 Condensed Financial Statements included in Part
I of this filing and incorporated herein by reference for a complete description
of share issuances together with receipt of proceeds. We plan to use the net
proceeds to fund, in part, the Phase III clinical trial using doxorubicin and
the Phase II clinical trial at NCI using melphalan.
10.
Application of Critical Accounting Policies
The Company's condensed financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America.
Certain accounting policies have a significant impact on amounts reported in the
financial statements. A summary of those significant accounting policies can be
found in Note 1 to the Company's financial statements contained in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2004 as filed with
the Securities and Exchange Commission. The Company has not adopted any
significant new accounting policies or modified the application of existing
policies during the nine months ended September 30, 2005.
(b) Management's Discussion and Analysis of Financial Condition and
Results of Operations
Not Applicable.
(c) Off-balance sheet arrangements
The Company does not have any off-balance sheet arrangements.
Item 3. CONTROLS AND PROCEDURES
Based on an evaluation of the Company's disclosure controls and procedures
performed by the Company's Chief Executive Officer and its Chief Financial
Officer as of the end of the period covered by this report, the Company's Chief
Executive Officer and its Chief Financial Officer concluded that the Company's
disclosure controls and procedures have been effective.
As used herein, "disclosure controls and procedures" means controls and other
procedures of the Company that are designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms issued by the Securities and
Exchange Commission. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act is accumulated and communicated to the Company's
management, including its principal executive officer or officers and its
principal financial officer or officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.
Since the date of the evaluation described above, there were no significant
changes in the Company's internal controls or in other factors that could
significantly affect these controls, and there were no corrective actions with
regard to significant deficiencies and material weaknesses.
11.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On August 4 and August 5, 2005, the Company sold an aggregate of 1,069,526
shares of its Common Stock upon exercise of all of its then outstanding Series B
Warrants to Purchase Shares of Common Stock dated November 24, 2004 (the "Series
B Warrants"). Based on the exercise price of $2.60 for each of the Series B
Warrants, the Company received an aggregate of $2,780,752 upon such exercises.
The Company claims an exemption from registration of the offer and sale of the
shares of Common Stock issued upon exercise of the Series B Warrants under Rule
506 under the Securities Act of 1933 on the basis that each of the purchasers is
an accredited investor.
No underwriter was involved in the exercise of the Series B Warrants, and the
Company paid no underwriting discount or commission in connection therewith.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
The information included in Item 2 of this report is incorporated by
reference into this Item 5.
Item 6. Exhibits
31.1 Certification by Chief Executive Officer Pursuant to Rule 13a-14.
31.2 Certification by Chief Financial Officer Pursuant to Rule 13a-14.
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.
12.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
DELCATH SYSTEMS, INC.
(Registrant)
November 8, 2005 /s/ PAUL M. FEINSTEIN
--------------------------
Paul M. Feinstein
Chief Financial Officer (on behalf of
the registrant and as the principal
financial and accounting officer of
the registrant)
13.
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
31.1 Certification by Chief Executive Officer Pursuant to Rule 13a-14.
31.2 Certification by Chief Financial Officer Pursuant to Rule 13a-14.
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.
EXHIBIT 31.1
CERTIFICATION
BY PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14
I, M. S. Koly, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Delcath Systems,
Inc;
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 small business
issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer 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)) for the small
business issuer 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 small business issuer,
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) [Omitted as permitted by Exchange Act Release No. 47986];
(c) Evaluated the effectiveness of the small business issuer'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 small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The small business issuer's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer'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 small business issuer'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 small business issuer's internal
control over financial reporting.
/s/ M. S. KOLY
-------------------------------
M. S. Koly
Chief Executive Officer
(Principal executive officer)
November 8, 2005
EXHIBIT 31.2
CERTIFICATION
BY PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14
I, Paul M. Feinstein, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Delcath Systems,
Inc;
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 small business
issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer 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)) for the small
business issuer 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 small business issuer,
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) [Omitted as permitted by Exchange Act Release No. 47986];
(c) Evaluated the effectiveness of the small business issuer'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 small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The small business issuer's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer'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 small business issuer'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 small business issuer's internal
control over financial reporting.
/s/ PAUL M. FEINSTEIN
----------------------------------
Paul M. Feinstein
Chief Financial Officer
(Principal financial officer)
November 8, 2005
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES -OXLEY ACT OF 2002
In connection with the Quarterly Report of DELCATH SYSTEMS, INC. (the
"Company") on Form 10-QSB for the period ended September 30, 2005 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I, M.
S. Koly, the Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
November 8, 2005 /s/ M. S. KOLY
--------------------------
M. S. Koly
Chief Executive Officer
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES -OXLEY ACT OF 2002
In connection with the Quarterly Report of DELCATH SYSTEMS, INC. (the
"Company") on Form 10-QSB for the period ended September 30, 2005 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Paul M. Feinstein, the Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
November 8, 2005 /s/ PAUL M. FEINSTEIN
-------------------------------
Paul M. Feinstein
Chief Financial Officer