Table of Contents
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
The |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
|||||
Emerging growth company |
Table of Contents
DELCATH SYSTEMS, INC.
Table of Contents
| Page | ||||||
| PART I—FINANCIAL INFORMATION |
||||||
| Item 1. |
Financial Statements | |||||
| Unaudited Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 |
3 | |||||
| 4 | ||||||
| 5 | ||||||
| 6 | ||||||
| 7 | ||||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 | ||||
| Item 3. |
24 | |||||
| Item 4. |
24 | |||||
| 24 | ||||||
| Item 1. |
24 | |||||
| Item 1A. |
Risks Factors | 25 | ||||
| Item 2. |
25 | |||||
| Item 6. |
27 | |||||
| 28 | ||||||
2
Table of Contents
September 30, |
December 31, |
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2022 |
2021 |
|||||||
Assets |
||||||||
Current assets |
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Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
Accounts receivable, net |
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Inventories |
||||||||
Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
||||||||
Right-of-use |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Stockholders’ Equity (Deficit) |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses |
||||||||
Deferred revenue |
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Lease liabilities, current |
||||||||
Loan payable, current |
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Total current liabilities |
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Other liabilities, non-current |
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Loan payable, non-current |
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Convertible notes payable, non-current |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity (deficit) |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive (loss) income |
( |
) | ||||||
Total stockholders’ equity (deficit) |
( |
) | ||||||
Total liabilities and stockholders’ equity (deficit) |
$ | $ | ||||||
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Product revenue |
$ | $ | $ | $ | ||||||||||||
Other revenue |
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Cost of goods sold |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Gross profit |
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Operating expenses: |
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Research and development expenses |
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Selling, general and administrative expenses |
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Total operating expenses |
||||||||||||||||
Operating loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income (expense) |
( |
) | ||||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other comprehensive (loss) income: |
||||||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ||||||||||||
Total other comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Common share data: |
||||||||||||||||
Basic and diluted loss per common share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Weighted average number of basic and diluted shares outstanding |
||||||||||||||||
Three and nine months ended September 30, 2022 |
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Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||||
$0.01 Par Value |
$0.01 Par Value |
|||||||||||||||||||||||||||||||
No. of Shares |
Amount |
No. of Shares |
Amount |
Additional Paid in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total |
|||||||||||||||||||||||||
Balance at January 1, 2022 |
$ | — | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||
Compensation expense for issuance of stock options |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Total comprehensive income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at March 31, 2022 |
— | ( |
) | |||||||||||||||||||||||||||||
Compensation expense for issuance of stock options |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Total comprehensive loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Balance at June 30, 2022 |
— | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||
Compensation expense for issuance of stock options |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Private placement -issuance of common shares and prefunded warrants, net of expenses |
— | — | — | — | ||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Total comprehensive loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Balance at September 30, 2022 |
$ | — | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
Three and nine months ended September 30, 2021 |
||||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||||
$0.01 Par Value |
$0.01 Par Value |
|||||||||||||||||||||||||||||||
No. of Shares |
Amount |
No. of Shares |
Amount |
Additional Paid in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total |
|||||||||||||||||||||||||
Balance at January 1, 2021 |
$ | — | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||
Compensation expense for issuance of stock options |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Shares settled for services |
— | — | — | — | — | |||||||||||||||||||||||||||
Conversion of Preferred stock into common stock |
( |
) | — | — | — | — | — | — | ||||||||||||||||||||||||
Exercise of warrants into common stock |
— | — | — | — | ||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Total comprehensive income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at March 31, 2021 |
— | ( |
) | ( |
) | |||||||||||||||||||||||||||
Compensation expense for issuance of stock options |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Conversion of Preferred stock into common stock |
( |
) | — | ( |
) | — | — | |||||||||||||||||||||||||
Exercise of warrants into common stock |
— | — | — | — | ||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Total comprehensive loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Balance at June 30, 2021 |
— | ( |
) | ( |
) | |||||||||||||||||||||||||||
Compensation expense for issuance of stock options |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Proceeds allocated to warrant |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Cash issuance costs of warrant |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
Exercise of warrants into common stock |
— | — | — | — | ||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Total comprehensive income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at September 30, 2021 |
$ | — | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||
Nine months ended September 30, |
||||||||
2022 |
2021 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Stock option compensation expense |
||||||||
| Depreciation expense |
||||||||
| Non-cash lease expense |
||||||||
| Amortization of debt discount |
||||||||
| Interest expense accrued related to convertible notes |
||||||||
| Changes in assets and liabilities: |
||||||||
| Decrease in prepaid expenses and other assets |
||||||||
| Increase in accounts receivable |
( |
) | ( |
) | ||||
| Increase in inventories |
( |
) | ( |
) | ||||
| Increase (decrease) in accounts payable and accrued expenses |
( |
) | ||||||
| Increase in other liabilities, non-current |
||||||||
| Decrease in deferred revenue |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Net cash used in investing activities |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Net proceeds from private placement |
||||||||
| Net procceds from debt financing |
||||||||
| Net proceeds from the exercise of warrants |
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| |
|
|
|
|||||
| Net cash provided by financing activities |
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| |
|
|
|
|||||
| Foreign currency effects on cash |
( |
) | ||||||
| |
|
|
|
|||||
| Net (decrease) increase in total cash |
( |
) | ||||||
| Total Cash, Cash Equivalents and Restricted Cash: |
||||||||
| Beginning of period |
||||||||
| |
|
|
|
|||||
| End of period |
$ | $ | ||||||
| |
|
|
|
|||||
| Cash, Cash Equivalents and Restricted Cash consisted of the following: |
||||||||
| Cash |
$ | $ | ||||||
| Restricted Cash |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
Nine months ended September 30, |
||||||||
2022 |
2021 |
|||||||
| Supplemental Disclosure of Cash Flow Information: |
||||||||
| Cash paid during the periods for: |
||||||||
| Interest expense |
$ | $ | ||||||
| |
|
|
|
|||||
| Supplemental Disclosure of Non-Cash Investing and Financing Activities: |
||||||||
| Conversions of preferred stock into common stock |
$ | $ | ||||||
| |
|
|
|
|||||
| Issuance of restricted stock for accrued fees due to a former board member |
$ | $ | ||||||
| |
|
|
|
|||||
| Right of use assets obtained in exchange for lease obligations |
$ | $ | |
|||||
| |
|
|
|
|||||
(1) |
General |
(2) |
Cash, Cash Equivalents and Restricted Cash |
September 30, |
December 31, |
|||||||
2022 |
2021 |
|||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted balance for loan agreement |
||||||||
Letters of credit |
||||||||
Security for credit cards |
||||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows |
$ | $ | ||||||
(3) |
Inventories |
September 30, |
December 31, |
|||||||
2022 |
2021 |
|||||||
Raw materials |
$ | $ | ||||||
Work-in-process |
||||||||
Finished goods |
||||||||
Total inventories |
$ | $ | ||||||
(4) |
Prepaid Expenses and Other Current Assets |
September 30, |
December 31, |
|||||||
2022 |
2021 |
|||||||
Clinical trial expenses |
$ | $ | ||||||
Insurance premiums |
||||||||
Professional services |
||||||||
Other |
||||||||
Total prepaid expenses and other current assets |
$ | $ | ||||||
(5) |
Property, Plant, and Equipment |
September 30, 2022 |
December 31, 2021 |
Estimated Useful Life |
||||||||||
Buildings and land |
$ | $ | ||||||||||
Enterprise hardware and software |
||||||||||||
Leaseholds |
useful life |
| ||||||||||
Equipment |
||||||||||||
Furniture |
||||||||||||
Property, plant and equipment, gross |
||||||||||||
Accumulated depreciation |
( |
) | ( |
) | ||||||||
Property, plant and equipment, net |
$ | $ | ||||||||||
(6) |
Accrued Expenses |
September 30, |
December 31, |
|||||||
2022 |
2021 |
|||||||
Clinical expenses |
$ | $ | ||||||
Compensation, excluding taxes |
||||||||
Short-term financing |
||||||||
Professional fees |
||||||||
Interest on convertible note |
||||||||
Other |
||||||||
Total accrued expenses |
$ | $ | ||||||
(7) |
Leases |
U.S. |
Ireland |
Total |
||||||||||
Lease cost |
||||||||||||
Operating lease cost |
$ | $ | $ | |||||||||
Other information |
||||||||||||
Operating cash flows out from operating leases |
( |
) | ( |
) | ( |
) | ||||||
Weighted average remaining lease term |
||||||||||||
Weighted average discount rate - operating leases |
% | % | ||||||||||
U.S. |
Ireland |
Total |
||||||||||
Three Months Remaining December 31, 2022 |
$ | $ | $ | |||||||||
Year ended December 31, 2023 |
||||||||||||
Year ended December 31, 2024 |
— | |||||||||||
Year ended December 31, 2025 |
— | |||||||||||
Year ended December 31, 2026 |
— | |||||||||||
Total |
||||||||||||
Less present value discount |
( |
) | ( |
) | ( |
) | ||||||
Operating lease liabilities included in the condensed consolidated balance sheets at September 30, 2022 |
$ | $ | $ | |||||||||
(8) |
Loans and Convertible Notes Payable |
September 30, 2022 |
December 31, 2021 |
|||||||||||||||||||||||
(in thousands) |
Gross |
Discount |
Net |
Gross |
Discount |
Net |
||||||||||||||||||
Loan - Avenue [1] |
( |
) | ( |
) | ||||||||||||||||||||
Loan - Avenue [1] - Less Current Portion |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Total - Loans Payable, Non-Current |
$ | $ | ( |
) | $ | $ | |
$ | ( |
) | $ | |||||||||||||
Convertible Note Payable - Rosalind |
— | — | ||||||||||||||||||||||
Convertible Portion of Loan Payable - Avenue |
( |
) | ( |
) | ||||||||||||||||||||
Total - Convertible Notes Payable - Non-Current |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ||||||||||||||
[1] |
The gross amount includes the |
Convertible |
||||||||||||
Loans |
Notes |
Total |
||||||||||
| Year ended December 31, 2022 |
$ | $ | — | $ | ||||||||
| Year ended December 31, 2023 |
— | |||||||||||
| Year ended December 31, 2024 |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ | |
$ | |
$ | |
||||||
| |
|
|
|
|
|
|||||||
August 6, 2021 |
||||
| Contractual term (years) |
||||
| Expected volatility |
% | |||
| Risk-free interest rate |
% | |||
| Expected dividends |
% | |||
(9) |
Stockholders’ Equity (Deficit) |
Nine months ended September 30, | ||||
2022 |
2021 | |||
| Expected terms (years) |
||||
| Expected volatility |
||||
| Risk-free interest rate |
||||
| Expected dividends |
||||
Number of Options |
Weighted Average Exercise Price Per Share |
Weighted Average Remaining Contractual Term (in years) |
Aggregate Intrinsic Value |
|||||||||||||
| Outstanding at January 1, 2022 |
$ | |||||||||||||||
| Granted |
||||||||||||||||
| Expired |
( |
) | ||||||||||||||
| Cancelled/Forfeited |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Outstanding at September 30, 2022 |
$ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Exercisable at September 30, 2022 |
$ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Options Exercisable |
||||||||||||
| Range of Exercise Prices |
Outstanding Number of Options |
Weighted Average Remaining Option Term (in years) |
Number of Options |
|||||||||
| $6.24 - $53.85 |
||||||||||||
| $53.85+ |
||||||||||||
| |
|
|
|
|
|
|||||||
| |
|
|
|
|
|
|||||||
Three months ended September 30 |
Nine months ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
| Selling, general and administrative |
$ | $ | $ | $ | ||||||||||||
| Research and development |
||||||||||||||||
| Cost of goods sold |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Warrants |
Weighted Average Exercise Price |
Weighted Average Remaining Life (in years) |
||||||||||
| Outstanding at January 1, 2022 |
$ | |||||||||||
| Warrants issued |
||||||||||||
| Warrants exercised |
||||||||||||
| Warrants expired |
||||||||||||
| |
|
|
|
|
|
|||||||
| Outstanding at September 30, 2022 |
$ | |||||||||||
| |
|
|
|
|
|
|||||||
| Exercisable at September 30, 2022 |
$ | |||||||||||
| |
|
|
|
|
|
|||||||
Warrants Exercisable |
||||||||||||
Range of Exercise Prices |
Outstanding Number of Warrants |
Weighted Average Remaining Warrant Term |
Number of Warrants |
|||||||||
| $0.01 |
||||||||||||
| $10.00 |
||||||||||||
| |
|
|
|
|
|
|||||||
| |
|
|
|
|
|
|||||||
(10) |
Net Loss per Common Share |
September 30, |
||||||||
2022 |
2021 |
|||||||
| Common stock warrants - equity |
||||||||
| Assumed conversion of Series E and Series E-1 Preferred Stock |
||||||||
| Assumed conversion of convertible notes |
||||||||
| Stock options |
||||||||
| |
|
|
|
|||||
| Total |
||||||||
| |
|
|
|
|||||
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
| Weighted average shares issued |
||||||||||||||||
| Weighted average pre-funded warrants |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Weighted average shares outstanding |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
(11) |
Income Taxes |
(12) |
Commitments and Contingencies |
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of Delcath Systems, Inc. (“Delcath” or the “Company”) should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto contained in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 to provide an understanding of its results of operations, financial condition and cash flows.
All references in this Quarterly Report to “we,” “our,” “us” and the “Company” refer to Delcath Systems, Inc., and its subsidiaries unless the context indicates otherwise.
Disclosure Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 with respect to our business, financial condition, liquidity, and results of operations. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should,” and the negative of these terms or other comparable terminology often identify forward-looking statements. Statements in this Quarterly Report on Form 10-Q that are not historical facts are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including the risks discussed in Market this Quarterly Report on Form 10-Q in Item 1A under “Risk, Factors” and the risks discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 in Item 1A under “Risk Factors” and the risks detailed from time to time in our future reports filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements include, but are not limited to, statements about:
| • | our estimates regarding sufficiency of our cash resources, anticipated capital requirements and our need for additional financing; |
| • | the commencement of future clinical trials and the results and timing of those clinical trials; |
| • | our ability to successfully commercialize CHEMOSAT and HEPZATO, generate revenue and successfully obtain reimbursement for the procedure and system; |
| • | the progress and results of our research and development programs; |
| • | submission and timing of applications for regulatory approval and approval thereof; |
| • | our ability to successfully source certain components of CHEMOSAT and HEPZATO and enter into supplier contracts; |
| • | our ability to successfully manufacture CHEMOSAT and HEPZATO; |
| • | our ability to successfully negotiate and enter into agreements with distribution, strategic and corporate partners; |
| • | the impact of macroeconomic conditions, including inflation, recession, and changes in fiscal policies on our business; |
| • | our estimates of potential market opportunities and our ability to successfully realize these opportunities. |
Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as otherwise required by law, we do not assume any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.
Company Overview
We are an interventional oncology company focused on the treatment of primary and metastatic liver cancers. Our lead product candidate, the HEPZATO® KIT (melphalan hydrochloride for injection/Hepatic Delivery System), or HEPZATO, is a drug/device combination product designed to administer high-dose chemotherapy to the liver while controlling systemic exposure and associated side effects. HEPZATO has not been approved for sale in the United States. In Europe, the Hepatic Delivery System is a stand-alone medical device having the same device components as HEZPATO, but without the melphalan hydrochloride, and is approved for sale under the trade name CHEMOSAT Hepatic Delivery System for Melphalan, or CHEMOSAT, where it has been used at major medical centers to treat a wide range of cancers of the liver.
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The Company’s clinical development program for HEPZATO is comprised of the FOCUS Clinical Trial for Patients with Hepatic Dominant Ocular Melanoma (the “FOCUS Trial”), a global registration clinical trial that is investigating objective response rate in metastatic ocular melanoma, or mOM. The Company is currently reviewing the incidence, unmet need, available efficacy data and development requirements for a broad set of liver cancers in order to select a portfolio of follow-on indications which will maximize the value of the HEPZATO platform.
In the United States, HEPZATO is considered a combination drug and device product and is regulated as a drug by the United States Food and Drug Administration, or the FDA. Primary jurisdiction for regulation of HEPZATO has been assigned to the FDA’s Center for Drug Evaluation and Research. The FDA has granted Delcath six orphan drug designations (five for melphalan in the treatment of patients with ocular (uveal) melanoma, cutaneous melanoma, hepatocellular carcinoma, intrahepatic cholangiocarcinoma, and neuroendocrine tumors) and one for doxorubicin in the treatment of patients with hepatocellular carcinoma).
Our most advanced development program is the treatment of ocular melanoma liver metastases, or mOM, a type of primary liver cancer. We are currently reviewing the incidence, unmet need, available efficacy data and development requirements for a broad set of liver cancers in order to select a portfolio of indications which will maximize the value of the HEPZATO platform. We believe that the disease states we are investigating and intend to investigate are unmet medical needs that represent significant market opportunities.
In December 2021, the Company announced that the FOCUS Trial for HEPZATO met its pre-specified endpoint. Based on the FOCUS Trial results, the Company is preparing to submit a new drug application, or NDA, to the FDA for HEPZATO. The Company held a pre-NDA meeting with the FDA in April 2022. Based on the feedback from FDA, the Company does not believe any additional pre-clinical or clinical studies are required to re-file the NDA. Due to vendor delays in delivering certain reports, we plan to submit an NDA to the FDA by the end of the year. The Company has opened two Expanded Access Program sites to provide access to patients who meet the inclusion criteria during the pendency of FDA’s review of HEPZATO.
On February 28, 2022, CHEMOSAT received Medical Device Regulation certification under the European Medical Devices Regulation [2017/745/EU], which may be considered by jurisdictions when evaluating reimbursement. As of March 1, 2022, the Company has assumed direct responsibility for sales, marketing and distribution of CHEMOSAT in Europe.
Results of Operations for the three and nine months ended September 30, 2022
Three months ended September 30, 2022 compared with three months ended September 30, 2021
Revenue
We recorded approximately $0.9 million in revenue for the three months ended September 30, 2022 compared to $0.5 million for the three months ended September 30, 2021. The increase in product revenue was primarily due to the transition to direct sales in Europe beginning in March 2022 which increased the average price per unit sold.
Cost of Goods Sold
For the three months ended September 30, 2022, cost of goods was relatively flat at $0.2 million for the three months ended September 30, 2022 and 2021 as cost per unit sold were similar.
Research and Development Expenses
Research and development expenses are incurred for the development of HEPZATO and consist primarily of payroll and payments to contract research and development companies. To date, these costs are related to generating pre-clinical data and the cost of manufacturing HEPZATO for clinical trials, conducting clinical trials and preparation costs for submission of HEPZATO to the FDA. For the three months ended September 30, 2022, research and development expenses increased to $4.0 million from $3.0 million in the prior year period. The increase of $1.0 million is primarily due to higher expenses in preparation of the NDA submission.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of payroll, rent and professional services such as accounting and legal services. For the three months ended September 30, 2022 and 2021, selling, general and administrative expenses were $4.5 million and $4.0 million, respectively. The increase is primarily due the settlement of the medac litigation offset by lower share-based compensation expense.
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Other Income/Expense
Other income (expense) is primarily related to income or expense associated with financial instruments. For the three months ended September 30, 2022 and 2021, other expenses were $0.7 million and $0.4 million, respectively. The increase in other expenses is primarily due to the interest expense and amortization expense for the original issue discount on the debt financing transaction discussed below between the Company and its lender, Avenue Venture Opportunities Fund, L.P.
Nine months ended September 30, 2022 compared with nine months ended September 30, 2021
Revenue
We recorded approximately $2.1 million in revenue for the nine months ended September 30, 2022 compared to $1.4 million for the nine months ended September 30, 2021. The increase in product revenue was primarily due to the transition to direct sales in Europe beginning in March 2022 which increased the average price per unit sold.
Cost of Goods Sold
For the nine months ended September 30, 2022, cost of goods slightly decreased from $0.5 million for the nine months ended September 30, 2021 to $0.4 million for the nine months ended September 30, 2022 primarily due to the revaluation of inventory items during 2022.
Research and Development Expenses
Research and development expenses are incurred for the development of HEPZATO and consist primarily of payroll and payments to contract research and development companies. To date, these costs are related to generating pre-clinical data and the cost of manufacturing HEPZATO for clinical trials, conducting clinical trials and preparation costs for submission of HEPZATO to the FDA. For the nine months ended September 30, 2022, research and development expenses increased to $13.6 million from $10.2 million in the prior year period. The increase of $3.4 million is primarily due to higher expenses in preparation for the pre-NDA meeting in April 2022 and preparation for the NDA submission this year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of payroll, rent and professional services such as accounting and legal services. For the nine months ended September 30, 2022 and 2021, selling, general and administrative expenses were $12.3 million and $10.6 million, respectively. The increase is primarily higher costs in the preparation for commercialization of HEPZATO in the United States next year, and the settlement of medac litigation.
Other Income/Expense
Other income (expense) is primarily related to income or expense associated with financial instruments. For the nine months ended September 30, 2022, other income/expense was a net expense of $2.0 million compared to $0.4 million for the nine months ended September 30, 2021. The increase in other expenses is primarily due to 2022 including a full year of interest expense and amortization expense for the original issue discount on the debt financing transaction between the Company and its lender, Avenue Venture Opportunities Fund, L.P.
Liquidity and Capital Resources
At September 30, 2022, we had cash, cash equivalents and restricted cash totaling $14.0 million. During the nine months ended September 30, 2022, the Company used $17.6 million of cash in our operating activities.
Our future results are subject to substantial risks and uncertainties. We have operated at a loss for our entire history and there can be no assurance that we will ever achieve consistent profitability. We have historically funded our operations through a combination of private placements and public offerings of our securities. We will need to raise additional capital under structures available to us, including debt and/or equity offerings.
On October 26, 2022, the Company received a letter from the Nasdaq indicating that, for the last thirty consecutive business days, the Market Value of Listed Securities, as defined by Nasdaq (“MVLS”) had been below the $35 million minimum requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided an initial period of 180 calendar days, or until April 24, 2023, to regain compliance. The letter states that the Nasdaq staff will provide written notification that the Company has achieved compliance with
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Rule 5550(b)(2) if at any time before April 24, 2023, the Company maintains its MVLS at $35 million or more for a minimum of ten consecutive business days (or such longer period of time as the Nasdaq staff may require in some circumstances, but generally not more than 20 consecutive business days). The Nasdaq deficiency letter has no immediate effect on the listing or trading of the Company’s common stock. If compliance is not achieved by April 24, 2023, the Company may be eligible for an additional 180 calendar day compliance period to demonstrate compliance with the minimum MVLS requirement. To qualify for the additional 180-day period, the Company will be required to meet the continued listing requirements for minimum closing bid price of its common stock and all other initial listing standards (with the exception of the minimum MVLS requirement). If the Company does not qualify for the second compliance period or fails to regain compliance during the second 180-day period, then Nasdaq will notify the Company that its common stock is subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq Hearings Panel. The Company will continue to monitor its MVLS and consider its available options to regain compliance with the Nasdaq minimum MVLS requirements, which may include applying for an extension of the compliance period or appealing to a Nasdaq Hearings Panel.
These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Our financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on our ability to raise additional capital through the sale of equity or debt securities to support our future operations.
Our capital commitments over the next twelve months include $8.6 million to satisfy September 30, 2022 accounts payable, accrued expenses and lease liabilities and $7.1 million of loan principal payments. Our capital commitments past the next twelve months include (a) $0.1 million of lease liabilities; (b) $5.5 million of loan principal payments; (c) $1.2 million of estimated settlement of litigation and (d) $5.0 million of convertible note principal payments, if the holders do not elect to convert the notes into equity.
We also expect to use cash, cash equivalents and investment proceeds to fund our clinical research and operating activities. Our future liquidity and capital requirements will depend on numerous factors, including the initiation and progress of clinical trials and research and product development programs; obtaining regulatory approvals and complying with applicable laws and regulations; the timing and effectiveness of product commercialization activities, including marketing arrangements; the timing and costs involved in preparing, filing, prosecuting, defending and enforcing intellectual property rights; and the effect of competing technological and market developments.
If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve our cash.
On August 6, 2021, the Company entered into a Loan and Security Agreement (the “Avenue Loan Agreement”) with Avenue Venture Opportunities Fund, L.P. (the “Lender,” or “Avenue”) for a term loan in an aggregate principal amount of up to $20.0 million (the “Avenue Loan”). The Avenue Loan bears interest at an annual rate equal to the greater of (a) the sum of 7.70% plus the prime rate as reported in The Wall Street Journal and (b) 10.95%. The interest rate at September 30, 2022 was 13.2% and increased to 13.95% for October 2022. The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property. The Avenue Loan matures on August 1, 2024. Additional information regarding the Avenue Loan can be found in Note 8 to the Company’s unaudited interim consolidated financial statements contained in this Quarterly Report on Form 10-Q.
On July 20, 2022, the Company closed a private placement for the issuance and sale of 690,954 shares of common stock (the “Common Stock”) and 566,751 pre-funded warrants to purchase common stock (the “Pre-Funded Warrants”) to certain investors. Each share of common stock was sold at a price per share of $3.98 and the Pre-Funded Warrants were sold at a price of $3.97 per Pre-Funded Warrant. The Pre-Funded Warrants have an exercise price of $0.01 per share of Common Stock and are immediately exercisable. The Company received gross proceeds from the private placement of approximately $5.0 million before deducting offering expenses. The Company intends to use the net proceeds from the private placement for working capital purposes and other general corporate purposes.
Critical Accounting Estimates
During the nine months ended September 30, 2022, there were no material changes to critical accounting estimates as reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2022 and may also be found on the Company’s website (www.delcath.com).
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Application of Critical Accounting Policies
Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. During the nine months ended September 30, 2022, there were no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. A description of certain accounting policies that may have a significant impact on amounts reported in the financial statements is disclosed in Note 3 to the Company’s Annual Report for the fiscal year ended December 31, 2021.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of our principal executive and principal accounting officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act). Based on that evaluation, our principal executive and principal accounting officer concluded that our disclosure controls and procedures as of September 30, 2022 (the end of the period covered by this Quarterly Report on Form 10-Q), have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our principal executive and principal accounting officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, claims are made against the Company in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties, or injunctions prohibiting us from selling our products or engaging in other activities.
medac Matter
In April 2021, the Company issued an invoice for €1.0 million (which currently converts to approximately $1.0 million) to medac GmbH, a privately held, multi-national pharmaceutical company based in Germany (“medac”), the Company’s EU product distribution partner, for a milestone payment due under the License, Supply and Marketing Agreement (the “License Agreement”) dated December 10, 2018, between the Company and medac. Pursuant to the License Agreement, a milestone is due upon achieving positive efficacy in the FOCUS Trial as defined by the FOCUS Trial protocol. Per the trial protocol and associated Statistical Analysis Plan, positive efficacy is based on whether the Objective Response Rate (ORR) exceeds a pre-specified threshold. A preliminary analysis of the FOCUS Trial data based on 87% of enrolled patients was released on March 31, 2021, and subsequently presented at the American Society of Clinical Oncology (ASCO) Annual Meeting held virtually from the 4th through the 8th of June 2021. Per that analysis, the ORR exceeded the pre-specified threshold. While the final ORR was not known at the time, given the magnitude by which the ORR exceeded the pre-specified endpoint and the small number of patients yet to be assessed, the final ORR will be greater than the pre-specified endpoint regardless of the responder status of the remaining patients. medac disagreed that the milestone was due and claimed that a full clinical study report was required in addition to the existing ORR analysis. medac has not disputed the accuracy of the ORR analysis or underlying data, but simply asserted that a full clinical study report is required prior to payment. While the Company disagrees with this interpretation, since medac had stated they did not intend to pay the invoice at this time, under revenue recognition criteria set out in ASC 606, the Company did not recognize the revenue.
On October 12, 2021, the Company notified medac in writing that it was terminating the License Agreement due to medac’s nonpayment of the milestone payment due under the License Agreement, with the effective date of termination of the License Agreement being April 12, 2022. medac disputed having an obligation to make a milestone payment under the Agreement and demanded withdrawal of the termination notice. The Company declined to withdraw the termination notice and, on December 16, 2021, the Company initiated an arbitration proceeding pursuant to the dispute resolution provisions of the License Agreement.
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On December 30, 2021, the Company received a letter from medac stating that, due to the Company’s failure to withdraw the termination notice, medac was terminating the License Agreement with immediate effect. In the letter, medac reserved its rights in full, including a purported claim for damages for wrongful termination. In a separate letter, medac agreed to orderly transition through February 28, 2022 in order to minimize the impact of any termination on patients and physicians. The Company agreed to purchase inventory held at medac in March 2022 for approximately $0.2 million.
On October 25, 2022, the parties reached a tentative agreement regarding the terms for a final settlement of the matter subject to the execution of a definitive settlement agreement on or before December 31, 2022. Under the agreed on settlement terms, Delcath will pay medac a royalty on sales of CHEMOSAT units over a defined minimum for a period of five years or until a maximum payment has been reached. The settlement terms also contain a minimum annual payment in the event the annual royalty payment does not reach the agreed on minimum payment amount. There is no assurance that the parties will enter into a definitive agreement for the settlement of the matter on or prior to December 31, 2022. As of September 30, 2022, the Company has estimated the settlement to be $1.2 million and recorded it as other liabilities, non-current on the condensed consolidated balance sheet and a charge in selling, general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021. Aside from the risk factors below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.
Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our common stock.
On October 26, 2022, the Company received a letter from the Nasdaq indicating that, for the last thirty consecutive business days, the Market Value of Listed Securities, as defined by Nasdaq (“MVLS”) had been below the $35 million minimum requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided an initial period of 180 calendar days, or until April 24, 2023, to regain compliance. The letter states that the Nasdaq staff will provide written notification that the Company has achieved compliance with Rule 5550(b)(2) if at any time before April 24, 2023, the Company maintains its MVLS at $35 million or more for a minimum of ten consecutive business days (or such longer period of time as the Nasdaq staff may require in some circumstances, but generally not more than 20 consecutive business days). The Nasdaq deficiency letter has no immediate effect on the listing or trading of the Company’s common stock. If compliance is not achieved by April 24, 2023, the Company may be eligible for an additional 180 calendar day compliance period to demonstrate compliance with the minimum MVLS requirement. To qualify for the additional 180-day period, the Company will be required to meet the continued listing requirements for minimum closing bid price of its common stock and all other initial listing standards (with the exception of the minimum MVLS requirement). If the Company does not qualify for the second compliance period or fails to regain compliance during the second 180-day period, then Nasdaq will notify the Company that its common stock is subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq Hearings Panel. The Company will continue to monitor its MVLS and consider its available options to regain compliance with the Nasdaq minimum MVLS requirements, which may include applying for an extension of the compliance period or appealing to a Nasdaq Hearings Panel.
The delisting of our common stock from Nasdaq may make it more difficult for us to raise capital on favorable terms in the future. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. Further, if we were to be delisted from Nasdaq, our common stock would cease to be recognized as covered securities and we would be subject to regulation in each state in which we offer our securities. Moreover, while the Company is exercising diligent efforts to maintain the listing of our common stock on the Nasdaq Capital Market, there is no assurance that any actions that we take to restore our compliance with the minimum MVLS requirement would prevent future non-compliance with the minimum MVLS requirement or other Nasdaq listing requirements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On July 18, 2022, the Company and certain accredited investors entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue to the investors in a private placement (i) 690,954 shares of the Company’s common stock at a purchase price of $3.98 per share and (ii) 566,751 pre-funded warrants to purchase common stock at a purchase price of $3.97 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.01 per share of common stock and are immediately exercisable. Upon the closing of the private placement on July 20, 2022, the Company received gross proceeds of
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approximately $5.0 million, before the deduction of offering expenses. The Company intends to use the net proceeds of the private placement for working capital and other general corporate purposes. Based in part upon the representations of the investors in the securities purchase agreement, the offering and sale of the securities was made in reliance on the exemption afforded by Regulation D under the Securities Act of 1933, as amended, and corresponding provisions of state securities or “blue sky” laws.
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Item 6. Exhibits
| * | Filed herewith. |
| ** | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference. |
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DELCATH SYSTEMS, INC.
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.
| DELCATH SYSTEMS, INC. | ||||||
| November 8, 2022 | /s/ Gerard Michel | |||||
| Gerard Michel | ||||||
| Chief Executive Officer (Principal Executive Officer) | ||||||
| November 8, 2022 | /s/ Anthony Dias | |||||
| Anthony Dias | ||||||
| Principal Accounting Officer | ||||||
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Exhibit 31.1
DELCATH SYSTEMS, INC.
CERTIFICATION
PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Gerard Michel, certify that:
| 1) | I have reviewed this Quarterly Report on Form 10-Q 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 registrant as of, and for, the periods presented in this report; |
| 4) | The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting. |
| November 8, 2022 | ||||||
| /s/ Gerard Michel | ||||||
| Gerard Michel | ||||||
| Chief Executive Officer (Principal Executive Officer) | ||||||
Exhibit 31.2
DELCATH SYSTEMS, INC.
CERTIFICATION
PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Anthony Dias, certify that:
| 1) | I have reviewed this Quarterly Report on Form 10-Q 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 registrant as of, and for, the periods presented in this report; |
| 4) | The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting. |
| November 8, 2022 | ||||||
| /s/ Anthony Dias | ||||||
| Anthony Dias | ||||||
| Principal Accounting Officer | ||||||
Exhibit 32.1
DELCATH SYSTEMS, INC.
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-Q for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerard Michel, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; 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, 2022 | ||||||
| /s/ Gerard Michel | ||||||
| Gerard Michel | ||||||
| Chief Executive Officer (Principal Executive Officer) | ||||||
Exhibit 32.2
DELCATH SYSTEMS, INC.
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-Q for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony Dias, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; 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, 2022 | ||||||
| /s/ Anthony Dias | ||||||
| Anthony Dias | ||||||
| Principal Accounting Officer | ||||||