0001193125-23-150523 | 10-Q | XBRL Viewer

$ 5,000

Discount

(201)

(228)

Less Current Portion, Net

4,799

4,772

(3,770)

(7,846)

Total - Loans Payable, Non-Current, Gross

1,168

3,353

Total - Loans Payable, Non-Current, Discount

(177)

(284)

Total - Loans Payable, Non-Current, Net

992

3,070

Loan Avenue [Member]

^[1]

5,610

11,923

Discount

^[1]

(849)

(1,008)

Less Current Portion, Gross

^[1]

4,762

10,916

^[1]

(4,442)

(8,570)

Less Current Portion, Discount

^[1]

672

724

Less Current Portion, Net

^[1]

(3,770)

(7,846)

Convertible Note Payable Rosalind [Member]

2,000

Convertible Loan Payable Avenue [Member]

2,000

3,000

Discount

(201)

(228)

Stockholders' Equity Note [Abstract]

$ 2,799

$ 2,772

[1]	The gross amount includes the 4.25% final payment of $467.5.

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2023

Summary of Avenue Warrant Valued Using the Black-Scholes Option Pricing Method

The Company values stock options using the Black-Scholes option pricing model and used the following assumptions during the reporting periods:


	Three Months Ended March 31,
	2023			2022

Expected terms (years)		5.8	%	5.5%-6.5%
Expected volatility		172.8	%	174.8.% -177.1%
Risk-free interest rate		4.08	%	1.75% - 1.90%
Expected dividends		—		0.00%

Summary of Stock Option Activity

The following is a summary of stock option activity for the three months ended March 31, 2023:


	Number of Options			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2023		2,235,052		$	10.30
Granted		728,000			4.67
Expired		(51,073	)		10.54
Cancelled/Forfeited		(17,586	)		11.42

Outstanding at March 31, 2023		2,894,393		$	8.87		8.4	$	935

Exercisable at March 31, 2023		1,505,927		$	10.81		7.7	$	44

Summary of Stock Option Shares Outstanding and Exercisable

The following table summarizes information for stock option shares outstanding and exercisable at March 31, 2023:


			Options Exercisable
Range of Exercise Prices	Outstanding Number of Options		Weighted Average Remaining Option Term (in years)		Number of Options
$2.83 - $51.50		2,893,894		8.4		1,505,428
$51.50+		499		5.8		499

		2,894,393		7.7		1,505,927

Summary of Recognized Share-based Compensation Cost

The following is a summary of share-based compensation expense in the statement of operations for the three months ended March 31, 2023 (in thousands):


	Three Months Ended March 31,
	2023		2022

Selling, general and administrative	$	1,118	$	1,475
Research and development		417		744
Cost of goods sold		126		52

Total	$	1,661	$	2,271

Summary of Warrant Activity

The following is a summary of common stock warrant activity for the three months ended March 31, 2023:


	Warrants		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Outstanding at January 1, 2023		5,153,291	$	7.01
Warrants issued		81,849		2.94

Outstanding at March 31, 2023		5,235,140	$	6.95		2.6

Exercisable at March 31, 2023		5,187,363	$	6.96		2.6

Schedule of Information Related to Stock Warrants Outstanding and Exercisable

The following table presents information related to common stock warrants at March 31, 2023:


			Warrants Exercisable
Range of Exercise Prices	Outstanding Number of Warrants		Weighted Average Remaining Warrant Term (in years)		Number of Warrants
$0.01		1,576,620		4.2		1,576,620
$4.50-$6.00		47,777
$10.00		3,610,743		1.9		3,610,743

		5,235,140		2.6		5,187,363

Leases - Additional Information (Details)	Mar. 31, 2023
Lease term	12 months

Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Prepaid Expense and Other Assets, Current [Abstract]
Clinical trial expenses	$ 1,630	$ 1,630
Insurance premiums	109	123
Professional services	91	121
Other	125	95
Total prepaid expenses and other current assets	$ 1,955	$ 1,969

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

(13)	Commitments and Contingencies

medac Matter

In April 2021, the Company’s wholly owned subsidiary, Delcath Systems Ltd, issued to medac GmbH, a privately held, multi-national pharmaceutical company based in Germany (“medac”), an invoice for a €1 million milestone payment under a License, Supply and Marketing Agreement dated December 10, 2018 (the “medac Agreement”) between medac and the Company. The medac Agreement provided to medac the exclusive right to market and sell CHEMOSAT in all member states of the European Union, Norway, Liechtenstein, Switzerland and the United Kingdom for which the Company was entitled to a combination of upfront and success-based milestone payments as well as a fixed transfer price per unit of CHEMOSAT and specified royalties.

In response to medac’s subsequent dispute and

non-payment

of the invoice, on October 12, 2021, the Company notified medac in writing that it was terminating the medac Agreement due to medac’s nonpayment of the €1 million milestone payment, with the effective date of termination of the medac Agreement being April 12, 2022. medac disputed having an obligation to make the milestone payment and demanded withdrawal of the termination notice. In response to medac’s continued failure to make the milestone payment and its demand for the Company to withdraw its termination notice, on December 16, 2021, the Company initiated an arbitration proceeding pursuant to the dispute resolution procedures of the medac Agreement. Thereafter, 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 medac Agreement with immediate effect. 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 December 30, 2022, the parties reached a final settlement of the matter and the Company agreed

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 of $0.2 million in the event the annual royalty payment does not reach the agreed minimum payment amount. The Company has estimated the fair value of the settlement to be $1.3 million as of March 31, 2023 and recorded $1.1 million as other liabilities,

non-current

and $0.2 million as accrued expenses on the Company’s condensed consolidated balance sheet as of March 31,

2023.

Lachman Consulting Services, Inc

On January 24, 2023, Lachman Consultant Services, Inc (“Lachman”) served the Company with a Complaint alleging that Delcath owes Lachman approximately $0.9 million in unpaid consulting fees plus interest, costs and attorneys’ fees. The lawsuit is Lachman Consultant Services, Inc. v. Delcath Systems, Inc., Index No. 650103-2023 (New York Supreme Court, New York County. The Company filed an answer to Lachman’s Complaint on February 22, 2023. On March 17, 2023, Delcath responded to Lachman’s March 3, 2023 Motion for Partial Summary Judgment. On March 20, 2023, the Court denied Lachman’s request that the case be moved into the Commercial Division. The current return date of Lachman’s motion for partial summary judgment is March 31, 2023. The dispute arises from a July 22, 2021 agreement between Lachman and Delcath under which Lachman was to provide assistance to the Company in regard to preparing for a FDA inspection and good manufacturing practices, training and support. In August 2022, the Company disputed $0.3 million of charges from Lachman As of March 31, 2023, the Company has accrued $0.9 million as accrued liability on the Company’s condensed consolidated balance sheet. The Company plans to vigorously defend this lawsuit and has reserved its rights to dispute all of Lachman charges as the litigation proceeds.

Stockholders' Equity - Summary of Employee Stock Purchase Plan (Details) - May Two Thousand And Twenty Two Employee Stock Purchase Plan [Member] - shares	1 Months Ended
	Aug. 31, 2021	Jan. 31, 2023
Stockholders Equity Note [Line Items]
Share-based compensation arrangement by share-based payment award number of shares authorized	260,295	15,417
Share-based compensation arrangement by share-based payment award purchase price of common stock, percent	85.00%

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 24,222	$ 7,671
Restricted cash	50	4,151
Accounts receivable, net	458	366
Inventories	2,337	1,998
Prepaid expenses and other current assets	1,955	1,969
Total current assets	29,022	16,155
Property, plant and equipment, net	1,392	1,422
Right-of-use assets	185	285
Total assets	30,599	17,862
Current liabilities
Accounts payable	2,428	2,018
Accrued expenses	7,120	4,685
Lease liabilities, current	93	186
Loan payable, current	3,770	7,846
Total current liabilities	13,411	14,735
Warrant liability	4,940
Other liabilities, non-current	1,158	1,144
Loan payable, non-current	992	3,070
Convertible notes payable, non-current	4,806	4,772
Total liabilities	25,307	23,721
Commitments and contingencies
Mezzanine equity
Preferred F-1 stock, $.01 par value; 24,900 shares designated; 24,900 shares and 0 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	18,368	0
Stockholders' equity (deficit)
Preferred stock, $.01 par value; 10,000,000 shares authorized; 11,357 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively
Common stock, $.01 par value; 40,000,000 shares authorized; 10,081,634 shares and 10,046,571 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	101	100
Additional paid-in capital	453,370	451,608
Accumulated deficit	(466,483)	(457,484)
Accumulated other comprehensive loss	(64)	(83)
Total stockholders' equity (deficit)	(13,076)	(5,859)
Total liabilities and stockholders' equity	$ 30,599	$ 17,862

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Summary of Operating and Financing Leases

The following table summarizes the Company’s operating leases as of and for the three months ended March 31, 2023:


	U.S.			Ireland			Total
Lease cost
Operating lease cost	$	97		$	9		$	106
Other information
Operating cash flows out from operating leases		(97	)		(9	)		(106	)
Weighted average remaining lease term		0.5			3.6
Weighted average discount rate - operating leases		8	%		8	%

Schedule of Remaining maturity of Operating Leases Excluding Short-Term Leases

Remaining maturities of the Company’s operating leases, excluding short-term leases, are as follows:


	U.S.			Ireland			Total
Year ended December 31, 2023		58			28			86
Year ended December 31, 2024		—			37			37
Year ended December 31, 2025		—			37			37
Year ended December 31, 2026		—			22			22

Total		58			124			182
Less present value discount		(1	)		(15	)		(16	)

Operating lease liabilities included in the condensed consolidated balance sheets at March 31, 2023	$	57		$	109		$	166

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (9,000)	$ (9,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock option compensation expense	1,661	2,271
Depreciation expense	30	31
Non-cash lease expense	100	97
Amortization of debt discount	194	194
Interest expense accrued related to convertible notes	27	40
Changes in assets and liabilities:
Decrease in prepaid expenses and other assets	14	39
Increase in accounts receivable	(92)	(134)
Increase in inventories	(339)	(599)
Increase in accounts payable and accrued expenses	3,221	953
Decrease in other liabilities, non current	(80)	(97)
Decrease in deferred revenue	0	(170)
Net cash used in operating activities	(4,264)	(6,375)
Cash flows from investing activities:
Purchase of property, plant and equipment	0	(89)
Net cash used in investing activities	0	(89)
Cash flows from financing activities:
Net proceeds from private placement	22,960	0
Proceeds from the issuance of common stock relating to the employee stock purchase plan	47	0
Repayment of debt	(6,313)	0
Net cash provided by financing activities	16,694	0
Foreign currency effects on cash	20	2
Net increase (decrease) in total cash	12,450	(6,462)
Total Cash, Cash Equivalents and Restricted Cash:
Beginning of period	11,822	26,953
End of period	24,272	20,491
Cash, Cash Equivalents and Restricted Cash consisted of the following:
Cash	24,222	16,340
Restricted Cash	50	4,151
Total	24,272	20,491
Supplemental Disclosure of Cash Flow Information:
Interest expense	$ 491	$ 411

Stockholders' Equity - Summary of Warrants Outstanding and Exercisable (Details) - shares	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Class Of Warrant Or Right [Line Items]
Warrants Outstanding, Number Outstanding	5,235,140	5,153,291
Weighted average remaining life	2 years 7 months 6 days
Warrants Exercisable, Number Exercisable	5,187,363
$0.01 [Member]
Class Of Warrant Or Right [Line Items]
Warrants Outstanding, Number Outstanding	1,576,620
Weighted average remaining life	4 years 2 months 12 days
Warrants Exercisable, Number Exercisable	1,576,620
$4.50-$6.00 [Member]
Class Of Warrant Or Right [Line Items]
Warrants Outstanding, Number Outstanding	47,777
$10.00 [Member]
Class Of Warrant Or Right [Line Items]
Warrants Outstanding, Number Outstanding	3,610,743
Weighted average remaining life	1 year 10 months 24 days
Warrants Exercisable, Number Exercisable	3,610,743

Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses And Other Current Assets

(4)	Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


	March 31,		December 31,
	2023		2022
Clinical trial expenses	$	1,630	$	1,630
Insurance premiums		109		123
Professional services		91		121
Other		125		95

Total prepaid expenses and other current assets	$	1,955	$	1,969

Income Taxes - Additional Information (Details) $ in Billions	3 Months Ended
	Mar. 31, 2023 USD ($)
Operating Loss Carryforwards [Line Items]
Corporate alternative minimum tax	15.00%
Minimum accounting profit required for preceding three financial year	$ 1
Percentage of excise tax on repurchases of stock	1.00%

Stockholders' Equity - Summary of Stock Option Shares Outstanding and Exercisable (Details) - shares	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding Number of Options	2,894,393	2,235,052
Weighted Average Remaining Contractual Term (Years), Exercisable	7 years 8 months 12 days
Number of Shares, Exercisable	1,505,927
$2.83 - $51.50
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding Number of Options	2,893,894
Weighted Average Remaining Contractual Term (Years), Exercisable	8 years 4 months 24 days
Number of Shares, Exercisable	1,505,428
$51.50+
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding Number of Options	499
Weighted Average Remaining Contractual Term (Years), Exercisable	5 years 9 months 18 days
Number of Shares, Exercisable	499

Stockholders' Equity - Schedule of Assumptions to Estimate Fair Value of Stock Options Using Black-Scholes Option Pricing Model (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected terms (years)	5 years 9 months 18 days
Expected volatility	172.80%
Risk-free interest rate	4.08%
Expected dividends	0.00%	0.00%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected terms (years)		5 years 6 months
Expected volatility		174.80%
Risk-free interest rate		1.75%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected terms (years)		minus 6 years 6 months
Expected volatility		177.10%
Risk-free interest rate		1.90%

Property, Plant, and Equipment - Components of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 6,362	$ 6,353
Accumulated depreciation	(4,970)	(4,931)
Property, plant, and equipment, net	1,392	1,422
Buildings and Land [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	1,301	1,301
Enterprise Hardware and Software [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 1,856	1,855
Property, plant and equipment, estimated useful life	3 years
Leaseholds [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 1,781	1,774
Property, plant and equipment, estimated useful life	Lesser of lease term or estimated useful life
Equipment [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 1,223	1,222
Property, plant and equipment, estimated useful life	7 years
Furniture [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 201	$ 201
Property, plant and equipment, estimated useful life	5 years
Buildings [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, estimated useful life	30 years

Stockholders' Equity - Summary of Recognized Share-based Compensation Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation (Income) expense	$ 1,661	$ 2,271
Selling, General and Administrative [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation (Income) expense	1,118	1,475
Research and Development [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation (Income) expense	417	744
Cost of Goods Sold [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation (Income) expense	$ 126	$ 52

Cover Page - shares	3 Months Ended
Cover Page - shares	Mar. 31, 2023	May 22, 2023
Cover [Abstract]
Entity Registrant Name	DELCATH SYSTEMS, INC.
Entity Central Index Key	0000872912
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Quarterly Report	true
Document Transition Report	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Entity File Number	001-16133
Entity Tax Identification Number	06-1245881
Entity Address, Address Line One	1633 Broadway
Entity Address, Address Line Two	Suite 22C
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10019
City Area Code	212
Local Phone Number	489-2100
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,620,813
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Trading Symbol	DCTH
Title of 12(b) Security	Common stock, $0.01 par value per share
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Security Exchange Name	NASDAQ

Loans and Convertible Notes Payable - Summary of Remaining Maturities of Company's Loan and Convertible Note Payables (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Instrument [Line Items]
Loans	$ 5,610
Convertible Notes	5,000
Total	10,610
Year ended December 31, 2023
Debt Instrument [Line Items]
Loans	4,442
Total	4,442
Year ended December 31, 2024
Debt Instrument [Line Items]
Loans	1,168
Convertible Notes	5,000
Total	$ 6,168

Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity

(10)	Stockholders’ Equity

Equity Offerings and Placements

Common Purchase Agreement

On March 29, 2023, the Company closed the Common Offering.

The aggregate exercise price of the Common Tranche A Warrants is approximately $0.1

million

, exercisable for an aggregate of 31,110 shares of Common Stock commencing on the Exercisability Date until the earlier of 21 days following the Company’s announcement of receipt of FDA Approval and March 31, 2026.

The aggregate exercise price of the Common Tranche B Warrants is approximately $0.1

llion

, exercisable for an aggregate of 16,666 shares of Common Stock commencing on the Exercisability Date until the earlier of 21 days following the Company’s announcement of receipt of recording at least $10 million in quarterly U.S. revenue from the commercialization of HEPZATO and March 31, 2026; provided, however, that if the FDA Approval occurs on or before February 15, 2024 and the holder of the Common Tranche B Warrant has not exercised its Common Tranche A Warrant by or before March 7, 2024, then any warrants not yet exercised pursuant to the Common Tranche B Warrant at such time shall

expire.

The Company determined that the common warrants should be liability-classified because they had the same features that resulted in the preferred warrants being liability-classified.

Registration Rights for Preferred and Common Offerings

Pursuant

to the Preferred Purchase Agreement and the Common Purchase Agreement (collectively, the “Purchase Agreements”), as soon as practicable following the receipt of the Stockholder Approval, the Company shall file a registration statement on

Form S-3 providing

for the resale by the investors party thereto of the common stock issuable upon conversion of the Registrable Shares (as defined in the Purchase Agreements”) and to use commercially reasonable efforts to have the registration statement declared effective

within twenty-one (21) days

following the filing date (or, in the event that the staff of the Securities and Exchange Commission reviews and has written comments to such registration statement, within forty-five (45) days following the filing date). The Company further agreed to take all steps necessary to keep such registration statement effective at all times until all Registrable Shares have been resold, or there remains no Registrable Shares.

The securities issued in the Series F Preferred Offering and the Common Offering have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and until so registered the securities may not be offered or sold absent registration or availability of an applicable exemption from registration. There is no established public trading market for the Series F Preferred Stock, the Preferred Warrants, the Preferred Warrant Shares or the Common Warrants and the Company does not intend to list such securities on any national securities exchange or nationally recognized trading

system.

The Company concluded that the common warrants were in the scope of Accounting Standards Codification (ASC) 480, Distinguishing Liabilities from Equity ASC 480,) since the common warrants are not mandatorily redeemable; and do not have obligations to issue a variable number of shares of common stock, The Company determined the common warrants met the definition of a derivativ

e and w

ere not considered indexed to the Company’s stock common since the warrants require early settle by repurchasing the warrants for cash in an amount equal to the Black-Scholes Value in the event of a Fundamental Transaction at pre-specified volatility at 100% as an input to the Black-Scholes calculation. Since the common warrants uses a pre-specific volatility and needing stockholders’ approval, the Company determined to record the common warrants at fair value and will be marked-to-market at subsequent reporting dates.

Other Private Placements

On July 20, 2022, the Company closed a private placement for the issuance and sale of 690,954 shares of common stock and 566,751

pre-funded

warrants to purchase common stock 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.

On December 13, 2022, the Company closed a private placement for the issuance and sale of 1,448,889 shares of common stock and 692,042

pre-funded

warrants to purchase common stock to certain investors. Each share of common stock was sold at a price per share of $2.90 and the

pre-funded

warrants were sold at a price of $2.89 per

pre-funded

warrant. The

pre-funded

At-the-Market

Offering

The Company has entered into the ATM Sales Agreement, pursuant to which the Company may offer and sell, at its sole discretion through the Sales Agent, shares of common stock having an aggregate offering price of up to $17.0 million. To date, the Company has sold approximately $4.0 million of its common stock, prior to issuance costs, under the ATM Sales Agreement. No sales were made during the three months ended March 31, 2023.

The Company has no obligation to sell any shares of common stock under the Sales Agreement. Subject to the terms and conditions of the Sales Agreement, the Sales Agent is required to use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of the Nasdaq Stock Market, to sell shares of common stock from time to time based upon the Company’s instructions, including any price, time or size limits specified by the Company. The Company will pay the Sales Agent a commission of 3.0% of the aggregate gross proceeds from each such sale, reimburse the Sales Agent’s legal fees and disbursements up to $50 and provide the Sales GENT with customary indemnification and contribution rights. The Sales Agreement may be terminated by the Sales Agent or the Company upon notice to the other party as provided in the sales agreement, or the Sales Agent at any time in certain circumstances, including the occurrence of a material and adverse change in the Company’s business or financial condition that makes it impractical or inadvisable to market common stock or to enforce contracts for the sale of common stock.

Authorized Shares

The Company is authorized to issue 40 million shares of common stock, $0.01 par value, and 10 million shares of preferred stock, $0.01 par value. To date, the Company has designated the following preferred stock: Series A (4,200 shares), Series B (2,360 shares), Series C (590 shares), Series D (10,000 shares), Series E (40,000 shares), Series

E-1

(12,960 shares), Series

F-1

(

24,900

shares), Series

F-2

(24,900 shares), Series

F-3

(34,860 shares), and Series

F-4

(24,900 shares).

Preferred Stock

As of March 31, 2023, there were an aggregate of 11,357 shares of

Series E and Series

E-1

Convertible Preferred Stock outstanding.

Omnibus Equity Incentive Plan

On September 30, 2020, the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) was adopted by the Company’s Board of Directors. On November 23, 2020, the Company’s stockholders approved the 2020 Plan. The 2020 Plan will continue in effect until the tenth anniversary of the date of its adoption by the Board or until earlier terminated by the Board. The 2020 Plan is administered by the Board of Directors or a committee designated by the Board of Directors. The 2020 Plan provides for the grant of incentive stock options,

non-qualified

stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, as well as other stock-based awards or cash awards that are deemed to be consistent with the purposes of the plan to Company employees, directors and consultants. As of March 31, 2023, there are 2,475,000 shares of common stock reserved under the 2020 Plan, of which 195,167 remained available to be issued.

Stock Options

The Company values stock options using the Black-Scholes option pricing model and used the following assumptions during the reporting periods:


	Three Months Ended March 31,
	2023			2022

Expected terms (years)		5.8	%	5.5%-6.5%
Expected volatility		172.8	%	174.8.% -177.1%
Risk-free interest rate		4.08	%	1.75% - 1.90%
Expected dividends		—		0.00%

The following is a summary of stock option activity for the three months ended March 31, 2023:


	Number of Options			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2023		2,235,052		$	10.30
Granted		728,000			4.67
Expired		(51,073	)		10.54
Cancelled/Forfeited		(17,586	)		11.42

Outstanding at March 31, 2023		2,894,393		$	8.87		8.4	$	935

Exercisable at March 31, 2023		1,505,927		$	10.81		7.7	$	44

The following table summarizes information for stock option shares outstanding and exercisable at March 31, 2023:


			Options Exercisable
Range of Exercise Prices	Outstanding Number of Options		Weighted Average Remaining Option Term (in years)		Number of Options
$2.83 - $51.50		2,893,894		8.4		1,505,428
$51.50+		499		5.8		499

		2,894,393		7.7		1,505,927

The following is a summary of share-based compensation expense in the statement of operations for the three months ended March 31, 2023 (in thousands):


	Three Months Ended March 31,
	2023		2022

Selling, general and administrative	$	1,118	$	1,475
Research and development		417		744
Cost of goods sold		126		52

Total	$	1,661	$	2,271

At March 31, 2023, there was $1.9 million of aggregate unrecognized compensation expense related employee and board stock option grants. The cost is expected to be recognized over a weighted average period of 1.4 years.

Common Stock Warrants

The following is a summary of common stock warrant activity for the three months ended March 31, 2023:


	Warrants		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Outstanding at January 1, 2023		5,153,291	$	7.01
Warrants issued		81,849		2.94

Outstanding at March 31, 2023		5,235,140	$	6.95		2.6

Exercisable at March 31, 2023		5,187,363	$	6.96		2.6

The following table presents information related to common stock warrants at March 31, 2023:


			Warrants Exercisable
Range of Exercise Prices	Outstanding Number of Warrants		Weighted Average Remaining Warrant Term (in years)		Number of Warrants
$0.01		1,576,620		4.2		1,576,620
$4.50-$6.00		47,777
$10.00		3,610,743		1.9		3,610,743

		5,235,140		2.6		5,187,363

On April 18, 2023, there were 538,828 $0.01 warrants exercised for 538,828 common shares.

Employee Stock Purchase Plan

In August 2021, the Company’s Board of Directors, with shareholder approval in May 2022, adopted the

Employee

Stock Purchase Plan ( the “ESPP”). The ESPP provides for a maximum of 260,295 shares of common stock to be purchased by participating employees. Employees who elect to participate in the ESPP will be able to purchase common stock at the lower of 85% of the fair market value of common stock on the first or last day of the applicable

six-month

offering period. In January 2023, an aggregate

15,417 shares were purchased by participating employees for the offering period of July 1, 2022 to December 31, 2022.

Preferred Purchase Agreement [Abstract]

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Net Loss per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net Loss per Share

(11)	Net Loss per Share

Basic net loss per share is determined by dividing net loss by the weighted average shares of common stock outstanding during the period, without consideration of potentially dilutive securities, except for those shares that are issuable for little or no cash consideration. Diluted net loss per share is determined by dividing net loss by diluted weighted average shares outstanding. Diluted weighted average shares reflects the dilutive effect, if any, of potentially dilutive common shares, such as stock options and warrants calculated using the treasury stock method. In periods with reported net operating losses, all common stock options convertible preferred shares and preferred and common warrants are generally deemed anti-dilutive such that basic net loss per share and diluted net loss per share are equal.

The following potentially dilutive securities were excluded from the computation of earnings per share as of March 31, 2023 and 2022 because their effects would be anti-dilutive:


	March 31,
	2023		2022
Common stock warrants		3,658,520		3,610,743
Assumed conversation of preferred stock warrants		11,896,667		—
Assumed conversion of preferred stock		8,681,176		1,135,721
Assumed conversion of convertible notes		488,031		488,031
Stock options		2,894,393		2,238,103

Total		27,618,787		7,472,598

At March 31, 2023, the Company had 1,576,620

pre-funded

warrants outstanding. The following table provides a reconciliation of the weighted average shares outstanding calculation for the three months ended March 31, 2023 and 2022:


	Three months ended March 31,
	2023		2022
Weighted average shares issued		10,081,634		7,906,728
Weighted average pre-funded warrants		1,540,750		283,755

Weighted average shares outstanding		11,622,384		8,190,483

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	11,357	11,357
Preferred stock, shares outstanding (in shares)	11,357	11,357
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	10,081,634	10,081,634
Common stock, shares outstanding (in shares)	10,046,571	10,046,571
Preferred F-1 Stock [Member]
Temporary equity, par or stated value per share	$ 0.01	$ 0.01
Temporary equity, shares authorized	24,900	24,900
Temporary equity, shares issued	24,900	24,900
Temporary equity, shares outstanding	0	0

Accrued Expenses

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued Expenses

(6)	Accrued Expenses

Accrued expenses consist of the following:


	March 31,		December 31,
	2023		2022
Clinical expenses	$	2,398	$	1,470
Compensation, excluding taxes		1,559		1,040
Professional fees		2,189		1,087
Interest on convertible note		593		553
Other		381		535

Total accrued expenses	$	7,120	$	4,685

Preferred Purchase Agreement

3 Months Ended

Mar. 31, 2023

Preferred Purchase Agreement

(9)	Preferred Purchase Agreement

Preferred Purchase Agreement

On March 29, 2023, the Company closed the Series F Preferred Offering. Pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series F Convertible Voting Preferred Stock (the “Certificate of Designation”), each share of

Series F-1 Preferred

Stock is, subject to the Stockholder Approval, automatically convertible into shares of common stock and/or, if applicable, shares of

Series F-2 Preferred

Stock, par value $0.01 per share (the “Series

F-2

Preferred Stock” and, together with the Series

F-1

Preferred Stock, the Series

F-3

Preferred Stock and the Series

F-4

Preferred Stock, the “Series F Preferred Stock”), of the Company in lieu of common stock.

The aggregate exercise price of the Preferred Tranche A Warrants is approximately $34.9 million, exercisable for an aggregate of 34,860 shares of

Series F-3 Preferred

Stock commencing on the Exercisability Date until the earlier of 21 days following the Company’s announcement of receipt of approval from the U.S. Food and Drug Administration for HEPZATO and March 31, 2026.

The aggregate exercise price of the Preferred Tranche B Warrants is approximately $24.9 million, exercisable for an aggregate of 24,900 shares of

Series F-4 Preferred

Stock commencing on the Exercisability Date until the earlier of 21 days following the Company’s announcement of receipt of recording at least $10 million in quarterly U.S. revenue from the commercialization of HEPZATO and March 31, 2026; provided, however, that if the FDA Approval occurs on or before February 15, 2024 and the holder of the Preferred Tranche B Warrant has not exercised its Preferred Tranche A Warrant by or before March 7, 2024, then any

Series F-4 Preferred

Stock not yet exercised pursuant to the Preferred Tranche B Warrant at such time shall expire.

Subject to the terms and limitations contained in the Certificate of Designation, the

Series F-1 Preferred

Stock issued in the Series F Preferred Offering will not become convertible until the Stockholder Approval. On the first (1st) Trading Day following the announcement of the Stockholder Approval, each share of

Series F-1 Preferred

Stock shall automatically convert into common stock, at the conversion price of $3.30 per share, subject to the terms and limitations contained in the Certificate of Designation. Subject to the limitations set forth in the

Certificate of Designation, at the option of the holder, each share of

Series F-2 Preferred

Stock,

Series F-3 Preferred

Stock or

Series F-4 Preferred

Stock shall be convertible into common stock, at the conversion price of $3.30 per share, $4.50 per share and $6.00 per share, respectively, rounded down to the nearest whole share, and in each case subject to the terms and limitations contained in the Certificate of Designation.

If Stockholder Approval isn’t received by the

one-year

anniversary of the March 2023 Securities Offering, then the Series

F-1

Preferred becomes redeemable at the option of the Requisite Holders for the Liquidation Preference Amount at any time until the three-year anniversary of the March 31, 2023 Securities Offering. The Requisite Holders is a majority of the then Series F Stockholders. Series F Convertible Preferred Stock Liquidation Payments are triggered upon (a) any voluntary or involuntary liquidation, dissolution or winding up of the Company; (b) a change of control transaction; or (c) a Deemed Liquidation Event (collectively a “Liquidation”). Prior to Stockholder Approval, the Series F Convertible Preferred Stock has parity with the Series E and Series

E-1

Convertible Preferred Stock and the Liquidation Payments would be three (3) times the original issuance price, plus declared but unpaid dividends, until Stockholder Approval is received. After Stockholder Approval, the Liquidation Payments would be distributed to both the Preferred and Common stockholders, on an “as converted basis”.

The Company concluded that the preferred warrants were not in the scope of Accounting Standards Codification (ASC) 480, Distinguishing Liabilities from Equity ASC 480,) since the preferred warrants are not mandatorily redeemable; and do not have obligations to issue a variable number of shares of preferred stock, The Company determined the preferred warrants met the definition of a derivative but were not considered indexed to the Company’s stock common since the warrants require early settlement by repurchasing the preferred warrants for cash in an amount equal to the Black-Scholes value in the event of a Fundamental Transaction at

pre-specified

volatility of 100% as an input to the Black-Scholes calculation. The Company determined to record the preferred warrants at fair value with subsequent changes in fair value recorded in earnings.

The gross proceeds of

$24.9

million were allocated first to the Preferred Warrant liabilities at their fair value of

$4.9

million, with the residual of

$20.0 million

being allocated to the Series F-1 Preferred Stock. Since the Series

F-1

Preferred Stock is redeemable at the option of the holder beginning at the one-year anniversary of the March 2023 Securities Offering, until Stockholder Approval is received the Series

F-1

Preferred Stock is initially classified as temporary (mezzanine) equity at allocated proceeds of $

20.0

million less issuance costs of the $

1.6

million. The Company expensed $

0.4

million of issuance costs that were allocated to the warranty liability during the three months ended March 31, 2023.

The Series

F-2,

F-3

and

F-4

Preferred Stock are not mandatorily redeemable, redeemable at the holder’s election or contingently redeemable at the holder’s election (at this point, a Deemed Liquidation Event would potentially trigger pro rata liquidation payments to the preferred and common stockholders on a pro rata “as converted” basis. Accordingly, the Series

F-2,

F-3

and

F-4

Preferred will be classified as permanent equity. After stockholder approval, the Series F-1 Preferred Stock automatically converts into common stock which is classified as permanent equity.

Loans and Convertible Notes Payable - Additional Information (Details) - USD ($)			3 Months Ended
	Mar. 15, 2023	Aug. 06, 2021	Mar. 31, 2023	Mar. 31, 2022
Debt Instrument [Line Items]
Interest expense incurred			$ 500,000	$ 400,000
Restricted Cash			50,000	4,151,000
Final payment			$ 467,500
Secured Convertible Notes Payable [Member]
Debt Instrument [Line Items]
Debt instrument, principal face amount		$ 2,000,000
Series E Preferred Stock [Member]
Debt Instrument [Line Items]
Debt instrument, conversion price			$ 1,500
Series E Preferred Stock [Member] \| Secured Convertible Notes Payable [Member]
Debt Instrument [Line Items]
Debt instrument maturity date		Oct. 30, 2024
Debt instrument, conversion price		$ 1,198
Term Loan from Avenue Venture Opportunities Fund L.P [Member]
Debt Instrument [Line Items]
Debt instrument, principal face amount		$ 3,000,000
Debt instrument maturity date		Aug. 01, 2024
Debt instrument, interest rate		7.70%
Debt instrument, interest rate		10.95%	15.45%
Debt instrument, interest rate term		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 March 31, 2023 was 15.45%. The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property.	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 March 31, 2023 was 15.45%. The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property.
Initial tranche of loan		$ 15,000,000
Loan amount funded into restricted account		4,000,000
Gross proceeds from ATM Offering		$ 20,000,000
Debt instrument, conversion price		$ 11.98
Frequency of periodic payment		monthly
Periodic interest payments, term		15 months
Debt instrument, incremental final payment	4.25%	4.25%
Original issue discount		$ 600,000
Cash issuance costs		600,000
Debit discount		500,000
Fair value of warrants reclassified from liability to equity		100,000
Aggregate debt discount		$ 2,300,000
Amortization of debt discount			$ 200,000
Current interest rate		7.70%
Restricted Cash	$ 4,000,000
Final payment	$ 200,000
Term Loan from Avenue Venture Opportunities Fund L.P [Member] \| Condition For The Extension Of Period OF Interest Only Payments [Member]
Debt Instrument [Line Items]
Class of warrants or rights number of securities covered by the warrants or rights	34,072
Warrant exercise price	$ 0.01
Estimated minimum proceeds on issue of common stock for extension of due date of interest only interest payments	$ 10,000,000
Term Loan from Avenue Venture Opportunities Fund L.P [Member] \| Warrant [Member]
Debt Instrument [Line Items]
Warrants Issued ToPurchase Of Common Stock		127,755
Warrant exercise price		$ 0.01
Warrants, maturity date		Aug. 31, 2026
Fair value of the Avenue Warrant		$ 1,200,000
Term Loan from Avenue Venture Opportunities Fund L.P [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Debt instrument, principal face amount		$ 20,000,000
Periodic interest payments, term		24 months
Prepayment fee, percentage		3.00%
Term Loan from Avenue Venture Opportunities Fund L.P [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Prepayment fee, percentage		1.00%
Term Loan from Avenue Venture Opportunities Fund L.P [Member] \| Non Convertible Debt [Member]
Debt Instrument [Line Items]
Aggregate debt discount		$ 1,900,000
Amortization of debt discount			$ 200,000
Term Loan from Avenue Venture Opportunities Fund L.P [Member] \| Convertible Debt [Member]
Debt Instrument [Line Items]
Aggregate debt discount		$ 400,000
Eight Point Zero Percentage July Two Thousand And Nineteen Notes [Member] \| Convertible Notes Payable [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate			8.00%
Current interest rate			8.00%
Eight Point Zero Percentage July Two Thousand And Nineteen Notes [Member] \| Convertible Debt [Member]
Debt Instrument [Line Items]
Interest expense incurred			$ 40,000	$ 40,000

Stockholders' Equity - Equity Incentive Plan - Additional Information (Details) - shares	Mar. 31, 2023	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common Stock Capital Shares Reserved	2,475,000
Number of common shares remained available to be issued		195,167

Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 811	$ 763
Work-in-process	1,410	1,102
Finished goods	116	133
Total inventories	$ 2,337	$ 1,998

Stockholders' Equity - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Stockholders' Equity Note [Abstract]
Number of Shares, Outstanding \| shares	2,235,052
Number of Shares, Granted \| shares	728,000
Number of Shares, Expired \| shares	(51,073)
Number of Shares, Cancelled/Forfeited \| shares	(17,586)
Number of Shares, Outstanding \| shares	2,894,393
Number of Shares, Exercisable \| shares	1,505,927
Weighted Average Exercise Price, Outstanding \| $ / shares	$ 10.3
Weighted Average Exercise Price, Granted \| $ / shares	4.67
Weighted Average Exercise Price, Expired \| $ / shares	10.54
Weighted Average Exercise Price, Cancelled/Forfeited \| $ / shares	11.42
Weighted Average Exercise Price, Outstanding \| $ / shares	8.87
Weighted Average Exercise Price, Exercisable \| $ / shares	$ 10.81
Weighted Average Remaining Contractual Term (Years), Outstanding	8 years 4 months 24 days
Weighted Average Remaining Contractual Term (Years), Exercisable	7 years 8 months 12 days
Aggregate Intrinsic Value, Outstanding \| $	$ 935
Aggregate Intrinsic Value, Exercisable \| $	$ 44

General

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

(1)

General

The unaudited interim condensed consolidated financial statements of Delcath Systems, Inc. (“Delcath” or the “Company”) as of and for the three months ended March 31, 2023 and 2022 should be read in conjunction with 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, 2022 (the “Annual Report”), which was filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2023 and may also be found on the Company’s website (www.delcath.com). In these notes to the interim condensed consolidated financial statements the terms “us”, “we” or “our” refer to Delcath and its consolidated subsidiaries.

Description of Business

The Company is an interventional oncology company focused on the treatment of primary and metastatic liver cancers. The Company’s 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. In Europe, the hepatic delivery system is a stand-alone medical device having the same device components as HEPZATO 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.

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 (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, intrahepatic cholangiocarcinoma, hepatocellular carcinoma, and neuroendocrine tumor indications and one for doxorubicin in the treatment of patients with hepatocellular carcinoma). HEPZATO has not been approved for sale in the United States.

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 (“mOM”), a type of primary liver cancer. The Company’s most advanced development program is the treatment of 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 that will maximize the value of the HEPZATO platform. In addition to HEPZATO’s use to treat mOM, the Company believes that HEPZATO has the potential to treat other liver dominant cancers, such as Metastatic Colorectal Cancer and Cholangiocarcinoma, and plans to begin the study of HEPZATO to treat such conditions in the near future. The Company believes 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. For information on the FOCUS Trial, see “Part I, Item 1. Business—Clinical Development Program—The FOCUS Trial” in our Annual Report.

On February 14, 2023, the Company filed a New Drug Application (“NDA”) resubmission (the “NDA resubmission”) with the FDA for the HEPZATO Kit (melphalan hydrochloride for Injection/Hepatic Delivery System) seeking approval of the HEPZATO Kit in the treatment of patients with unresectable hepatic-dominant mOM. The resubmission was in response to a September 12, 2013 Complete Response Letter (“CRL”) from the FDA for the Company’s NDA in December 2010 seeking approval of its first generation melphalan hydrochloride for injection/hepatic delivery system. The NDA resubmission contains comprehensive data and information on Generation Two HEPZATO Kit relating to the matters identified in the CRL. On March 20, 2023, the FDA determined the NDA resubmission constituted a complete response and set a Prescription Drug User Fee Act target action date of August 14, 2023. The Company continues to promote its early access programs in the United States to make HEPZATO readily available to mOM patients. The Company is focused on continuing to treat these patients with mOM as regulatory approval is sought in the United States. There are currently patients enrolled in our early access program sites.

On February 28, 2022, CHEMOSAT received Medical Device Regulation (“MDR”) 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.

Risks and Uncertainties

While the long-term economic impact of either the

COVID-19

pandemic or the conflict between Russia and Ukraine is difficult to assess or predict, each of these events has caused significant disruptions to the global financial markets and contributed to a general global economic slowdown. Furthermore, inflation rates, particularly in the United States and the United Kingdom, have increased recently to levels not seen in decades. In addition, the U.S. Federal Reserve has raised interest rates in response to concerns about inflation. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. Recent bank failures, including Silicon Valley Bank (“SVB”), Signature Bank and First Republic Bank, may also have an impact on the Company’s liquidity and capital resources. If other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on our business and financial condition. If the

disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy. See “Risk Factors” in “Par

t I –

Item 1A – Risk Factors” in the Company’s Annual Report for additional risks associated with its substantial capital requirements.

Liquidity and Going Concern

At March 31, 2023, the Company had cash, cash equivalents and restricted cash totaling $24.3 million, as compared to cash, cash equivalents and restricted cash totaling $11.8 million at December 31, 2022. During the three months ended March 31, 2023, the Company used $4.3 million of cash in our operating activities.

On March 10, 2023, the Company had a banking relationship with SVB. As of the closure of SVB on March 10, 2023, it held approximately $1.1 million of unrestricted cash in deposits held in SVB, $4.0 million held in a restricted SVB account as required per the Avenue Loan Agreement (as defined in “Note 8 – Loans and Convertible Notes Payable”) and approximately $0.2 million of restricted cash held in SVB collateral accounts as required per the Company’s line of credit for the property in New York City and its credit card program with SVB. SVB was closed on March 10, 2023 by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. On March 12, 2023, the U.S. Treasury, Federal Reserve, and FDIC announced that SVB depositors would have access to all of their money starting March 13,2023. On March 13, 2023, the Company was able to access all of its cash, cash equivalents and investments held at or through SVB. While the Company has not experienced any losses in such accounts, the recent failure of SVB exposed it to significant credit risk prior to the completion by the FDIC of the resolution of SVB in a manner that fully protected all depositors. The Company is evaluating alternative solutions which management believes does not expose us to significant credit risk or jeopardizes our liquidity.

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 that it will ever achieve or maintain profitability. The Company has historically funded its operations primarily with proceeds from sales of common stock, warrants and prefunded warrants for the purchase of common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements. The Company has entered into a Controlled Equity Offering

Sales Agreement (“ATM Sales Agreement”), with Cantor Fitzgerald & Co. (the “Sales Agent”), pursuant to which the Company may offer and sell, at its sole discretion through the Sales Agent, shares of common stock having an aggregate offering price of up to $17.0 million. To date, the Company has sold approximately $4.0 million of its common stock, prior to issuance costs, under the ATM Sales Agreement. No sales were made during the three months ended March 31, 2023.

We currently believe that our current cash and cash equivalents will enable us to have sufficient cash past our anticipated PDUFA date of August 14, 2023. Subject to the approval by our stockholders of the private placement that we closed on March 29, 2023 at our upcoming annual general meeting of stockholders, the Tranche A and B warrants issued in such private placement will become exercisable. The exercise of all such warrants would generate approximately $60.0 million in proceeds. We believe that this amount will be adequate to fund the commercialization of HEPZATO, if approved. If there is a substantial delay in the approval of HEPZATO we expect to need to raise additional capital under structures available to us, including debt and/or equity offerings, which may not be on terms favorable to us. In a delayed approval scenario, our ability to continue as a going concern depends on our ability to raise additional capital through the sale of equity or debt securities, or through partnering or licensing transactions in which we receive cash to support our future operations. If we are unable to secure additional capital or if additional capital is not available on favorable terms for us, we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve our cash.

The Company’s capital commitments over the next twelve months include (a) $9.6 million to satisfy accounts payable, accrued expenses and lease liabilities and (b) $4.4 million of loan principal payments. Additional capital commitments beyond the next twelve months include (a) $0.2 million of lease liabilities; (b) $1.0 million for settlement of litigation with medac; (c) $1.2 million of loan principal payments; and (d) $5.0 million of convertible note principal payments, if the holders do not elect to convert the notes into equity.

The Company also expects to use cash and cash equivalents to fund

its

potential approval of HEPZATO from the FDA, commercialization of HEPZATO and CHEMOSAT and any future clinical research trials and operating activities. The Company’s 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.

On August 6, 2021, the Company entered into 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 million (the “Avenue Loan”). The Avenue Loan bears interest at an annual rate equal to the greater of (a) the sum of 7.7% plus the prime rate as reported in The Wall Street Journal and (b) 10.95%. The interest rate at March 31, 2023 was 15.45%. The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property. The Avenue Loan matures on August 1, 2024. On March 15, 2023, the Company returned to Avenue $4.0 million held in restricted cash to paydown a portion of the outstanding Avenue Loan balance. On March 31, 2023, the Company reached an agreement to amend its existing loan agreement with Avenue to defer the interest only to September 30, 2023. The interest only period may be extended at the Company’s option to December 31, 2023 if, by September 30, 2023, Delcath has (a) received FDA approval for the HEPZATO Kit and (b) received net proceeds of at least $10 million from the sale and issuance of equity securities or exercise of existing warrants. In exchange for this extension, the Company has agreed to provide Avenue

with

34,072 warrants to purchase shares of common stock. The exercise price of the warrants is $0.01.

On March 27, 2023, the Company entered into to a securities purchase agreement with certain accredited investors (the “Preferred Purchase Agreement”). Pursuant to the Preferred Purchase Agreement, on March 29, 2023, the Company issued to purchasers an aggregate $24.9 million in shares, consisting of 24,900 shares of the Company’s Series

F-1

Convertible Preferred Stock, par value $0.01 per share (the

“Series F-1 Preferred

Stock”), that are convertible into approximately 7.6 million shares of common stock at a conversion price of $3.30 per share, and two tranches of warrants that are exercisable as follows:

•

Tranche A warrants (the “Preferred Tranche A Warrant

”) for an aggregate exercise price of approximately $34.9 million are exercisable for an aggregate of up to 34,860 shares of Series

F-3

Convertible Preferred Stock, par value $0.01 per share (the

“Series F-3 Preferred

Stock”), at an exercise price of $1,000 per share (and convertible into an aggregate of up to approximately 7.8 million shares of common stock at a conversion price of $4.50 per share) until the earlier of 3/31/2026 or 21 days following the Company’s announcement of receipt of FDA approval for HEPZATO; and

•

Tranche B warrants (the “Preferred Tranche B Warrant

,” together with the Preferred Tranche A Warrant, the “Preferred Warrants”) for an aggregate exercise price of $24.9 million are exercisable for an aggregate of up to 24,900 shares of Series

F-4

Convertible Preferred Stock, par value $0.01 per share (the “Series

F-4

Preferred Stock” and, together with the Series

F-3

Preferred Stock, the “Preferred Warrant Shares”), at an exercise price of $1,000 per share, (and convertible into an aggregate of up to approximately 4.2 million shares of common stock at a conversion price of $6.00 per share) until the earlier of 3/31/2026 or 21 days following disclosure of the Company’s public announcement of recording at least $10 million in quarterly U.S. revenue from the commercialization of HEPZATO (collectively, the “Series F Preferred Offering”).

The shares of Series

F-1

Convertible Preferred Stock, and accompanying warrants, were issued at a price of $1,000 per share. Conversion of the Series

F-1

Convertible Preferred Stock into shares of common stock of the Company, and the exercisability of the warrants, is subject to approval by the Company’s stockholders (the “Stockholder Approval”). The Company received gross proceeds of approximately $24.9 million

from the private placement

, before deducting the fees paid to the placement agent and the financial advisors and other financing expenses payable

by the Company.

See Note 9 – Preferred Purchase Agreement for additional details related to the Series F Preferred Offering.

Also on March 27, 2023, the Company entered into a securities purchase agreement with the Company’s Chief Executive Officer, Gerard Michel (the “Common Purchase Agreement”). Pursuant to the Common Purchase Agreement, on March 29, 2023, the Company issued to Mr. Michel 19,646 shares of common stock and two tranches of warrants that are exercisable as follows:

	•		A Preferred Tranche A Warrant (the “Common Tranche A Warrant’) for an aggregate exercise price of approximately $0.1 m illion are exercisable for an aggregate of up to 31,110 shares of common stock until the earlier of 3/31/2026 or 21 days following the Company’s announcement of receipt of FDA approval for HEPZATO; and

	•		A Preferred Tranche B Warrant (the “Common Tranche B Warrant” and, together with the Common Tranche A Warrant, the “Common Warrants”) for an aggregate exercise price of $0.1 million are exercisable for an aggregate of up to 16,666 shares of common stock until the earlier of 3/31/2026 or 21 days following disclosure of the Company’s public announcement of recording at least $10 million in quarterly U.S. revenue from the commercialization of HEPZATO (collectively, the “Common Financing”). The shares of common stock issuable upon exercise of the Common Warrants collectively are referred to herein as the “Common Warrant Shares”.

See Note 10 – Stockholders’ Equity – Equity Offerings and Placements – Common Purchase Agreement for additional details related to the Common Offering.

Basis of Presentation

These interim condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with generally accepted accounting principles in the United States of America (GAAP) and with the SEC’s instructions to Form

10-Q

and Article 10 of Regulation

S-X.

They include the accounts of all wholly owned subsidiaries and all significant inter-company accounts and transactions have been eliminated in consolidation.

The preparation of interim condensed consolidated financial statements requires management to make assumptions and estimates that impact the amounts reported. These interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Company’s results of operations, financial position and cash flows for the interim periods ended March 31, 2023 and 2022; however, certain information and footnote disclosures normally included in our audited consolidated financial statements included in our Annual Report have been condensed or omitted as permitted by GAAP. It is important to note that the Company’s results of operations and cash flows for interim periods are not necessarily indicative of the results of operations and cash flows to be expected for a full fiscal year or any interim period.

Significant Accounting Policies

Other than the new policies listed below, there have been no material changes to our significant accounting policies as set forth in Note 3 Summary of Significant Accounting Policies to the consolidated financial statements included in the Company’s Annual Report on Form

10-K

for the fiscal year ended December 31, 2022.

Warrant Liabilities

The Company determined the warrant liability was not in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity, which classifies and measures certain financial instruments with characteristics of both liability and equity. Entities must consider whether to classify contracts that may be settled in its own stock, such as warrants, as equity of the entity or as an asset or liability. If an event that is not within the entity’s control could require net cash settlement, then the contract should be classified as an asset or a liability at their fair value at issuance with subsequent changes in fair value recorded in earnings.

The Company has accounted for the Preferred Warrants as derivative instruments in accordance with ASC 815, Derivatives and Hedging. Management has determined that the Preferred Warrants issued in conjunction with the Preferred Purchase Agreement and the Common Warrants issued in conjunction with the Common Purchase Agreement should be liability classified due to the existence of a pre-specified volatility input to the Black-Scholes calculation which would be used to calculate the repurchase price of the Preferred Warrants and Common Warrants in the event of a Fundamental Transaction, as defined.

The valuations of the warrant liability and preferred F-1 shares were determined using option pricing models. These models use inputs such as the underlying price of the shares issued at the measurement date, volatility, risk free interest rate and expected life of the instrument. In addition, the Company used probabilities of the FDA approval and of recording at least $10 million in quarterly U.S. revenue from the commercialization of HEPZATO as inputs in the model to determine the fair value of warrants liability and preferred F-1 shares. The Company will adjust the fair value of the warranty liability at the end of each reporting period.

Mezzanine Equity

The Company accounts for its warrant liability in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity, which classifies and measures certain financial instruments with characteristics of both liability and equity. When ordinary or preferred shares are determined to be conditionally redeemable upon the occurrence of certain events that are not solely within the control of the issuer, and upon such event, the shares would become redeemable at the option of the holders, they are classified as ‘mezzanine equity’ (temporary equity). The purpose of this classification is to convey that such a security may not be permanently part of equity and could result in a demand for cash, securities or other assets of the entity in the future.

Recently Adopted and Issued Accounting Pronouncements

We have not been required to adopt any accounting standards that had a significant impact on our consolidated financial statements in the two years ended December 31, 2022. We do not expect any recently issued accounting standards to have a significant impact on our consolidated financial statements.

Revision of Previously Issued Quarterly Financial Statements

In preparation of the Company’s audited financial statements as of and for year ended December 31, 2022, the Company determined it needed to correct previously reported share-based compensation expense for each quarter during 2022. The correction for share-based compensation increased the net loss in amount of $0.8

million for

the first quarter of 2022, $0.5

million for

the second quarter of 2022 and $0.4

million for

the third quarter of fiscal 2022. The share-based

compensation adjustment is a

non-cash

adjustment and did not have any impact on the cash balances for the Company.

The following tables contain the financial

information for the periods previously reported and have been updated to reflect the revisions of the Company’s financial statements. The revisions do not have an impact on the Company’s cash position

The Company has not amended its previously filed Quarterly Reports on Form

10-Q

for the three quarterly periods ended September 30, 2022. The impact of the revision on the Company’s financial statements for the first quarter of 2022 is reflected in the following table:


	As previously report			Adjustment			As revised
Balance Sheet for March 31, 2022 (unaudited)
Additional paid-in capital	$	434,305		$	797		$	435,102
Accumulated deficit		(429,179	)		(797	)		(429,976	)
Consolidated Statement of Operations and Comprehensive Loss for the three months March 31, 2022 (unaudited)
Research and development expenses		4,240			241			4,481
Selling, general and administrative expenses		3,648			556			4,204

Total operating expenses		7,888			797			8,685
Operating loss		(7,543	)		(797	)		(8,340	)
Net loss		(8,203	)		(797	)		(9,000	)
Total other comprehensive loss		(8,201	)		(797	)		(8,998	)
Basic and diluted loss per common share		(1.00	)		(0.10	)		(1.10	)
Consolidated statement of Stockholders’ Equity (Deficit) for the three months ended March 31, 2022 (unaudited)
Compensation expense for issuance of stock options		1,474			797			2,271
Net loss		(8,203	)		(797	)		(9,000	)
Consolidated Statement of Cash Flows for the three months ended March 31, 2022 (unaudited)
Net loss		(8,203	)		(797	)		(9,000	)
Stock option compensation expense		1,474			797			2,271
Balance Sheet for June 30, 2022 (unaudited)
Additional paid-in capital		435,922			1,299			437,221
Accumulated deficit		(438,836	)		(1,299	)		(440,135	)

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Clinical expenses	$ 2,398	$ 1,470
Compensation, excluding taxes	1,559	1,040
Professional fees	2,189	1,087
Interest on convertible note	593	553
Other	381	535
Total accrued expenses	$ 7,120	$ 4,685

Loans and Convertible Notes Payable

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Loans and Convertible Notes Payable

(8)	Loans and Convertible Notes Payable


	March 31, 2023									December 31, 2022
	Gross			Discount			Net			Gross			Discount			Net
Loan - Avenue [1]		5,610			(849	)		4,762			11,923			(1,008	)		10,916
Loan - Avenue [1] - Less Current Portion		(4,442	)		672			(3,770	)		(8,570	)		724			(7,846	)

Total - Loans Payable, Non-Current	$	1,168		$	(177	)	$	992		$	3,353		$	(284	)	$	3,070

Convertible Note Payable - Rosalind		2,000			—			2,000			2,000			—			2,000
Convertible Portion of Loan Payable - Avenue		3,000			(201	)		2,799			3,000			(228	)		2,772

Total - Convertible Notes Payable - Non-Current	$	5,000		$	(201	)	$	4,799		$	5,000		$	(228	)	$	4,772

[1]	The gross amount includes the 4.25% final payment of $467.5.

Remaining maturities of the Company’s loan and convertible note payables are as follows:


	Loans		Convertible Notes		Total
Year ended December 31, 2023	$	4,442	$	—	$	4,442
Year ended December 31, 2024		1,168		5,000		6,168

Total	$	5,610	$	5,000	$	10,610

Term Loan from Avenue Venture Opportunities Fund, L.P.

On August 6, 2021, the Company entered into a Loan and Security Agreement (the “Avenue Loan Agreement”) with Avenue for a term loan in an aggregate principal amount of up to $20.0 million. 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 March 31, 2023 was 15.45%. The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property. The Avenue Loan matures on August 1, 2024.

The initial tranche of the Avenue Loan is $15.0 million, including $4.0 million that was funded into a restricted account and would be released upon achievement of (a)(x) positive FOCUS trial efficacy per the trial’s predefined Statistical Analysis Plan (SAP) (specifically the Overall Response Rate exceeds the

pre-specified

threshold for success defined in the SAP by a statistically significant amount); and (y) based on data contained within the FOCUS trial database and appropriate for use with the FDA, safety and tolerability among FOCUS trial participants is within the range of currently approved and commonly used cytotoxic chemotherapeutic agents; and (b) raising subsequent net equity proceeds of at least $20 million.

Up to $3.0 million of the principal amount of the Avenue Loan outstanding may be converted, at the option of Avenue, into shares of the Company’s common stock at a conversion price of $11.98 per share.

In connection with the Avenue Loan, the Company issued to Avenue a warrant (the “Avenue Warrant”) to purchase 127,755 shares of common stock at an exercise price per share equal to $0.01. The Avenue Warrant is exercisable until August 31, 2026.

The Company will make monthly interest-only payments during the first fifteen months of the term of the Avenue Loan, which could be increased to up to twenty-four months upon the achievement of specified performance milestones. Following the interest-only period, the Company will make equal monthly payments of principal plus interest until the maturity date, when all remaining principal outstanding and accrued interest must be paid. If the Company prepays the Avenue Loan, it will be required to pay (a) a prepayment fee of 3% if the Avenue Loan is prepaid during the interest-only period; and (b) a prepayment fee of 1% if the Avenue Loan is prepaid after the interest-only period. The Company must make an incremental final payment equal to 4.25% of the aggregate funding. On March 15, 2023, the Company returned to Avenue $4.0 million held in the restricted cash to paydown a portion of the outstanding loan balance and reduce the monthly principal payments and an incremental 4.25% of the final payment totaling $0.2

million

. On March 31, 2023, the Company reached an agreement to amend the Avenue Loan Agreement to defer the interest only to September 30, 2023. The interest only period may be extended at the Company’s option to December 31, 2023 if, by September 30, 2023, the Company has (a) received FDA approval for the HEPZATO Kit and (b) received net proceeds of at least $10 million from the sale and issuance of equity securities or exercise of existing warrants. In exchange for this extension, the Company has agreed to provide Avenue

with

34,072 warrants to purchase shares of common stock. The exercise price of the warrants is $0.01.

The Avenue Loan Agreement requires the Company to make and maintain representations and warranties and other agreements that are customary in loan agreements of this type. The Avenue Loan Agreement also contains customary events of default, including

non-payment

of principal or interest, violations of covenants, bankruptcy and material judgments.

The Company determined that the embedded conversion option associated with the Avenue Loan was not required to be bifurcated. The Company determined that the Avenue Warrant met the criteria to be equity-classified. The $0.6 million value of the final payment was treated as original issue discount. The $1.2 million relative fair value of the Avenue Warrant was credited to Additional Paid in Capital while it was debited as debt discount. Of the $0.6

million

of cash issuance costs, $0.5

million

was allocated to the Avenue Loan and was recorded as debit discount, while $0.1

million

was allocated to the Avenue Warrant and was debited to Additional Paid in Capital. Of the $2.3 million of aggregate debt discount, $1.9 million was allocated to the

non-convertible

portion of the Avenue Loan, while $0.4

million

was allocated to the convertible portion of the Avenue Loan. Aggregate debt discount amortization of $0.2 million was recorded during the three months ended

March 31, 2023, including

$0.2

million

related to the

non-convertible

portion of the Avenue Loan and

nominal amount

to the convertible portion of the Avenue Loan. The Company also determined that the convertible portion of the Avenue Loan did not include a beneficial conversion feature, because the effective conversion price exceeded the commitment date market price of the Company’s common stock. Interest expense incurred was $0.5 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively.

Convertible Notes Payable

The Company has $2.0 million of principal outstanding related to Senior Secured Promissory Notes (the “Rosalind Notes”) which bear interest at 8% per annum. Pursuant to their original terms, the Rosalind Notes were convertible into Series E Preferred Stock at a price of $1,500 per share and were to mature on July 16, 2021. Interest expense was $40 for the three months ended March 31, 2023 and 2022, respectively.

On August 6, 2021, the Company executed an agreement to amend the Rosalind Notes to (a) reduce the conversion price to $1,198 per share of the Company’s Series E Convertible Preferred Stock; and (b) extend the maturity date to October 30, 2024. In addition, in order to induce Avenue to provide the Avenue Loan described above, the holders of the Rosalind Notes agreed to subordinate all of the Company’s indebtedness and obligations to the holders; and (b) all of the holders’ security interest, to the Avenue Loan and Avenue’s security interest in the Company’s property.

Schedule of accrued expenses

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Stockholders' Equity - Equity Offerings and Placements - Additional Information (Details) $ in Millions	Mar. 29, 2023 USD ($) shares	Mar. 31, 2023
Stockholders Equity Note [Line Items]
Deferred revenue	$ 10.0
Black Scholes Valuation Technique [Member] \| Measurement Input, Price Volatility [Member]
Stockholders Equity Note [Line Items]
Volatility		100
Tranche A Warrants [Member] \| Common Purchase Agreement [Member]
Stockholders Equity Note [Line Items]
Aggregate exercise price of preferred warrants	$ 0.1
Number of exercisable common warrants \| shares	31,110
Tranche B Warrants [Member] \| Common Purchase Agreement [Member]
Stockholders Equity Note [Line Items]
Aggregate exercise price of preferred warrants	$ 0.1
Number of exercisable common warrants \| shares	16,666

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued expenses consist of the following:


	March 31,		December 31,
	2023		2022
Clinical expenses	$	2,398	$	1,470
Compensation, excluding taxes		1,559		1,040
Professional fees		2,189		1,087
Interest on convertible note		593		553
Other		381		535

Total accrued expenses	$	7,120	$	4,685

Preferred Purchase Agreement - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Mar. 29, 2023	Mar. 31, 2023	Dec. 31, 2022
Disclosure Of Preferred Purchase Agreement [Line Items]
Preferred stock, par value (in dollars per share)		$ 0.01	$ 0.01
Deferred revenue	$ 10,000
Financial and nonfinancial liabilities		$ 6,245	$ 1,280
Warrant [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Stock issuance cost paid		400
Preferred Warrant Liabilities [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Proceeds from issuance of warrants		24,900
Financial and nonfinancial liabilities		4,900
Series F-1 Preferred Stock [Member] \| Preferred Warrant Liabilities [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Proceeds from issuance of warrants		20,000
Series F-3 Preferred Stock [Member] \| Preferred Tranche A Warrant [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Number of exercisable preferred warrants	34,860
Preferred Purchase Agreement [Member] \| Preferred Tranche A Warrant [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Aggregate exercise price of preferred warrants	$ 34,900
Number of exercisable preferred warrants	34,860
Preferred Purchase Agreement [Member] \| Preferred Tranche B Warrant [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Aggregate exercise price of preferred warrants	$ 24,900
Number of exercisable preferred warrants	24,900
Deferred revenue	$ 10,000
Preferred Purchase Agreement [Member] \| Series F-1 Preferred Stock [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Preferred stock, par value (in dollars per share)	$ 0.01
Preferred stock convertible conversion price	3.3
Stock issuance costs		1,600
Proceeds from issuance of preferred stock		$ 20,000
Preferred Purchase Agreement [Member] \| Series F-2 Preferred Stock [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Preferred stock convertible conversion price	3.3
Preferred Purchase Agreement [Member] \| Series F-3 Preferred Stock [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Preferred stock convertible conversion price	4.5
Preferred Purchase Agreement [Member] \| Series F-4 Preferred Stock [Member]
Disclosure Of Preferred Purchase Agreement [Line Items]
Preferred stock convertible conversion price	$ 6

Fair Value Measurements - Schedule of Fair Value of Outstanding Warrants (Details) - Preferred And Common Warrants [Member] - Valuation Technique, Option Pricing Model [Member]	Mar. 29, 2023
Risk-free Interest Rates [Member] \| Minimum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants measurement input	3.8
Risk-free Interest Rates [Member] \| Maximum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants measurement input	4.8
Contractual life (in years) [Member] \| Minimum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Expected term	6 months
Contractual life (in years) [Member] \| Maximum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Expected term	3 years
Expected Volatility [Member] \| Minimum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants measurement input	70
Expected Volatility [Member] \| Maximum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants measurement input	75
Measurement Input, Expected Dividend Rate [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants measurement input	0

Property, Plant, and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 30	$ 31

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue	$ 597	$ 378
Cost of goods sold	(181)	(33)
Gross profit	416	345
Operating expenses:
Research and development expenses	4,576	4,481
Selling, general and administrative expenses	4,165	4,204
Total operating expenses	8,741	8,685
Operating loss	(8,325)	(8,340)
Interest expense, net	(688)	(645)
Other income (loss)	13	(15)
Net loss	(9,000)	(9,000)
Other comprehensive income:
Foreign currency translation adjustments	19	2
Total other comprehensive loss	$ (8,981)	$ (8,998)
Common share data:
Basic loss per common share	$ (0.77)	$ (1.1)
Diluted loss per common share	$ (0.77)	$ (1.1)
Weighted average number of basic shares outstanding	11,622,384	8,190,483
Weighted average number of diluted shares outstanding	11,622,384	8,190,483
Product Revenue [Member]
Revenue	$ 597	$ 207
Other Revenue [Member]
Revenue	$ 0	$ 171

Stockholders' Equity - Stock Incentive Plans - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense related to non-vested share-based compensation awards	$ 1.9
Cost expected to be recognized over weighted average period	1 year 4 months 24 days

Inventories (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consist of the following:


	March 31, 2023		December 31, 2022
Raw materials	$	811	$	763
Work-in-process		1,410		1,102
Finished goods		116		133

Total inventories	$	2,337	$	1,998

Stockholders' Equity - Preferred Stock Issuances - Additional Information (Details) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Preferred stock, shares outstanding (in shares)	11,357	11,357
Series A Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	4,200
Series B Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	2,360
Series C Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	590
Series D Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	10,000
Series E Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	40,000
Preferred stock, shares outstanding (in shares)	11,357
Series E1 Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	12,960
Series F-1 Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	24,900
Series F-2 Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	24,900
Series F-3 Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	34,860
Series F-4 Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized (in shares)	24,900

Property, Plant, and Equipment

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

(5)	Property, Plant, and Equipment

Property, plant, and equipment consist of the following:


	March 31, 2023			December 31, 2022			Estimated Useful Life
Buildings and land	$	1,301		$	1,301			30 years - Buildings
Enterprise hardware and software		1,856			1,855			3 years
Leaseholds		1,781			1,774			Lesser of lease term or estimated useful life
Equipment		1,223			1,222			7 years
Furniture		201			201			5 years

Property, plant and equipment, gross		6,362			6,353
Accumulated depreciation		(4,970	)		(4,931	)

Property, plant and equipment, net	$	1,392		$	1,422

Depreciation expenses for the three months ended March 31, 2023 and 2022 was $30 and $31 respectively.

Stockholders' Equity - Common Stock Warrants - Additional Information (Details) - $ / shares	Apr. 18, 2023	Mar. 31, 2023	Dec. 31, 2022
Stockholders Equity Note [Line Items]
Class Of Warrant Or Right Outstanding		5,235,140	5,153,291
Subsequent Event [Member]
Stockholders Equity Note [Line Items]
Class Of Warrant Or Right Outstanding	538,828
Class of warrants or rights exercise price per share	$ 0.01
Class of warrant or right exercised	538,828

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

(14)	Fair Value Measurements

The table below presents activity within Level 3 of the fair value hierarchy, our liabilities carried at fair value for the year ended March 31, 2023:


	Level 3
	Contigent liabilities		Warrants		Total


Balance at January 1, 2023	$	1,280	$	—	$	1,280
Total change in foreign exchange		25				25
Fair value of the warrant liability issued				4,940		4,940

Balance at March 31, 2023	$	1,305	$	4,940	$	6,245

Contingent liabilities are

re-measured

to fair value each reporting period using projected financial targets, discount rates, probabilities of payment, and projected payment dates. Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. Projected financial targets are based on our most recent internal operational budgets and may take into consideration alternate scenarios that could result in more or less profitability for the respective service line. Increases or decreases in projected financial targets and probabilities of payment may result in significant changes in the fair value measurements. Increases in discount rates and the time to payment may result in lower fair value measurements. Increases or decreases in any of those inputs in isolation may result in a significantly lower or higher fair value measurement.

As disclosed in Note 9 and Note 10 of the Company’s consolidated financial statements, the Company allocated part of the proceeds of private placement of the Company’s preferred

F-1

shares to warrant liability issued in connection with the transaction. The valuations of the warrants were determined using option pricing models. These models use inputs such as the underlying price of the shares issued at the measurement date, volatility, risk free interest rate and expected life of the instrument. The Company has classified the warrants as a long-term liability due to certain provisions relating to the holders’ ability to exercise the warrants beyond twelve months of the reporting date and has accounted for them as derivative instruments in accordance with ASC 815, adjusting the fair value at the end of each reporting period.

The fair value of the preferred and common warrants at March 29, 2023 was determined by using option pricing models assuming the following:


	March 29, 2023
Risk free interest rate		3.80% - 4.80	%
Expected term (years)		0.5 - 3.0
Expected volatility		70% - 75	%
Expected dividends		0.00	%

Additionally, the Company has determined that the warrant liability should be classified within Level 3 of the fair-value hierarchy by evaluating each input for the option pricing models against the fair-value hierarchy criteria and using the lowest level of input as the basis for the fair-value classification as called for in ASC 820. There are six inputs: closing price of Delcath stock on the day of evaluation; the exercise price of the warrants; the remaining term of the warrants; the volatility of the Company’s stock over that term; annual rate of dividends; and the risk-free rate of return. Of those inputs, the exercise price of the warrants and the remaining term are readily observable in the warrant agreements. The annual rate of dividends is based on the Company’s historical practice of not granting dividends. The closing price of Delcath stock would fall under Level 1 of the fair-value hierarchy as it is a quoted price in an active market (ASC

820-10).

The risk-free rate of return is a Level 2 input as defined in ASC

820-10,

while the historical volatility is a Level 3 input as defined in ASC 820. Since the lowest level input is a Level 3, the Company determined the warrant liability is most appropriately classified within Level 3 of the fair value hierarchy.

The following tables present information about the Company’s financial assets and liabilities that have been measured at fair value as of March 31, 2023 and December 31, 2022 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value. In general, the fair values were determined using Level 3:


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		March 31, 2023

Description
Liabilities:
Contingent liability		—		—	$	1,305	$	1,305
Warrant liability						4,940		4,940

Total liabilities	$	—	$	—	$	6,245	$	6,245


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2022
Description
Liabilities:
Contingent liability		—		—	$	1,280	$	1,280

Total liabilities	$	—	$	—	$	1,280	$	1,280

Cash and Cash Equivalents [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Stockholders' Equity - Summary of Warrant Activity (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Warrants outstanding [Roll Forward]
Outstanding, beginning of period (in shares) \| shares	5,153,291
Warrants issued (in shares) \| shares	81,849
Outstanding, end of period (in shares) \| shares	5,235,140
Exercisable, end of period (in shares) \| shares	5,187,363
Warrants, Exercise Price per Share [Roll Forward]
Outstanding, beginning of period (in dollars per share) \| $ / shares	$ 7.01
Outstanding, ending of period (in dollars per share) \| $ / shares	6.95
Warrants issued (in dollars per share) \| $ / shares	2.94
Exercisable, (in dollars per share) \| $ / shares	$ 6.96
Weighted average remaining life	2 years 7 months 6 days
Weighted average remaining life, Exercisable	2 years 7 months 6 days

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

(7)

Leases

The Company recognizes

right-of-use

(“ROU”) assets and lease liabilities when it obtains the right to control an asset under a leasing arrangement with an initial term greater than twelve months. The Company leases its facilities under

non-cancellable

operating and financing leases. The Company evaluates the nature of each lease at the inception of an arrangement to determine whether it is an operating or financing lease and recognizes the ROU asset and lease liabilities based on the present value of future minimum lease payments over the expected lease term. The Company’s leases do not generally contain an implicit interest rate and therefore the Company uses the incremental borrowing rate it would expect to pay to borrow on a similar collateralized basis over a similar term in order to determine the present value of its lease payments.

The following table summarizes the Company’s operating leases as of and for the three months ended March 31, 2023:


	U.S.			Ireland			Total
Lease cost
Operating lease cost	$	97		$	9		$	106
Other information
Operating cash flows out from operating leases		(97	)		(9	)		(106	)
Weighted average remaining lease term		0.5			3.6
Weighted average discount rate - operating leases		8	%		8	%

Remaining maturities of the Company’s operating leases, excluding short-term leases, are as follows:


	U.S.			Ireland			Total
Year ended December 31, 2023		58			28			86
Year ended December 31, 2024		—			37			37
Year ended December 31, 2025		—			37			37
Year ended December 31, 2026		—			22			22

Total		58			124			182
Less present value discount		(1	)		(15	)		(16	)

Operating lease liabilities included in the condensed consolidated balance sheets at March 31, 2023	$	57		$	109		$	166

Fair Value Measurements - Fair Value Measurements Using Significant Unobservable Inputs (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Beginning balance	$ 1,280
Total change in foreign exchange	25
Fair value of the warrant liability issued	4,940
Ending balance	6,245
Contigent liabilities
Beginning balance	1,280
Total change in foreign exchange	25
Ending balance	1,305
Warrants
Beginning balance	0
Fair value of the warrant liability issued	4,940
Ending balance	$ 4,940

General - Additional Information (Details) - USD ($)				3 Months Ended
General - Additional Information (Details) - USD ($)	Mar. 29, 2023	Mar. 15, 2023	Aug. 06, 2021	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Mar. 10, 2023	Dec. 31, 2022
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Net cash used in operating activities				$ 4,300,000
Proceeds from issuance of private placement				22,960,000			$ 0
Impact of Correction of Share Based Compensation on Net Income Loss					$ 400,000	$ 500,000	$ 800,000
Cash cash equivalents and restricted cash				24,300,000					$ 11,800,000
Sale of stock consideration received on the transaction				$ 101,000					$ 100,000
Deferred revenue	$ 10,000,000
Common stock, shares issued (in shares)				10,081,634					10,081,634
Proceeds from exercise of warrants	$ 60,000,000
Preferred Purchase Agreement [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Stock issued during period shares	24,900
Stock issued during the period value new issues	$ 24,900,000
Share price	$ 0.01
Conversion of stock preferred shares converted	7,600,000
Conversion of stock shares converted per share price	$ 3.3
Preferred Purchase Agreement [Member] \| Series F-1 Convertible Preferred Stock [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Proceeds from issuance of private placement	$ 24,900,000
Shares issued, price per share	$ 1,000
Common Purchase Agreement [Member] \| Chief Executive Officer [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Common stock, shares issued (in shares)	19,646
Accounts Payable Accrued Expenses And Lease Liabilities [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Capital commitments current				$ 9,600,000
Loan Principal Payments [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Capital commitments current				4,400,000
Capital commitement non current				1,200,000
Lease Liabilities [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Capital commitement non current				200,000
Third Party Settlement [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Capital commitement non current				1,000,000
Convertibe Note Principal Payments [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Capital commitement non current				5,000,000
Controlled Equity Offering Sales Agreement [Member] \| Cantor Fitzgerald And Co [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Common stock subscribed but not issued value				17,000,000
Sale of stock consideration received on the transaction				4,000,000
Stock issued during the period value new issues				$ 0
Term Loan From Avenue Venture Opportunities Fund LP [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Debt instrument, principal face amount			$ 3,000,000
Interest rate			7.70%
Debt instrument, interest rate			10.95%	15.45%
Debt instrument maturity date			Aug. 01, 2024
Debt instrument, interest rate term			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 March 31, 2023 was 15.45%. The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property.	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 March 31, 2023 was 15.45%. The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property.
Long term debt variable interest rate percentage				15.45%
Restricted cash used to repay loans proceeds		$ 4,000,000
Term Loan From Avenue Venture Opportunities Fund LP [Member] \| Condition For The Extension Of Period OF Interest Only Payments [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Class of warrants or rights exercise price per share		$ 0.01
Estimated minimum proceeds on issue of common stock for extension of due date of interest only interest payments		$ 10,000,000
Class of warrants or rights number of securities covered by the warrants or rights		34,072
Term Loan From Avenue Venture Opportunities Fund LP [Member] \| Maximum [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Debt instrument, principal face amount			$ 20,000,000
Term Loan From Avenue Venture Opportunities Fund LP [Member] \| Unrestricted Cash With Silicon Valley Bank [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Unrestricted investments current								$ 1,100,000
Term Loan From Avenue Venture Opportunities Fund LP [Member] \| Restricted Investment As Per Loan Agreement [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Restricted investments current								4,000,000
Term Loan From Avenue Venture Opportunities Fund LP [Member] \| Collateral Held With Silicon Valley Bank [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Restricted investments current								$ 200,000
PreferredTranche A Warrant [Member] \| Preferred Purchase Agreement [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Class of warrants or rights exercise price per share	$ 1,000
Share price	$ 0.01
Conversion of stock preferred shares converted	7,800,000
Conversion of stock shares converted per share price	$ 4.5
Aggregate exercise price of preferred warrants	$ 34,900,000
Number of exercisable preferred warrants	34,860
Preferred Tranche B Warrant [Member] \| Preferred Purchase Agreement [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Class of warrants or rights exercise price per share	$ 1,000
Share price	$ 0.01
Conversion of stock preferred shares converted	4,200,000
Conversion of stock shares converted per share price	$ 6
Aggregate exercise price of preferred warrants	$ 24,900,000
Number of exercisable preferred warrants	24,900
Deferred revenue	$ 10,000,000
Common Tranche A Warrant [Member] \| Preferred Purchase Agreement [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Aggregate exercise price of preferred warrants	$ 100,000
Number of exercisable preferred warrants	31,110
Common Tranche B Warrant [Member] \| Preferred Purchase Agreement [Member]
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items]
Aggregate exercise price of preferred warrants	$ 100,000
Number of exercisable preferred warrants	16,666
Deferred revenue	$ 10,000,000

Cash, Cash Equivalents and Restricted Cash

3 Months Ended

Mar. 31, 2023

Cash, Cash Equivalents and Restricted Cash

(2)	Cash, Cash Equivalents and Restricted Cas h

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in

Restricted

Cash

on the balance sheets.

Cash, cash equivalents, and restricted cash balances were as follows:


	March 31, 2023		December 31, 2022
Cash and cash equivalents	$	24,222	$	7,671
Restricted balance for loan agreement		—		4,000
Letters of credit		—		101
Security for credit cards		50		50

Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	24,272	$	11,822

On March 15, 2023, the Company returned to Avenue the $4.0 million held in the restricted cash to paydown a portion of the outstanding Avenue Loan balance. On March 31, 2023, letter of credit for the

sub-lease

agreement for office space at 1633 Broadway, New York, NY expired.

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair value measurements using significant unobservable inputs

The table below presents activity within Level 3 of the fair value hierarchy, our liabilities carried at fair value for the year ended March 31, 2023:


	Level 3
	Contigent liabilities		Warrants		Total


Balance at January 1, 2023	$	1,280	$	—	$	1,280
Total change in foreign exchange		25				25
Fair value of the warrant liability issued				4,940		4,940

Balance at March 31, 2023	$	1,305	$	4,940	$	6,245

Schedule of fair value of the outstanding warrants

The fair value of the preferred and common warrants at March 29, 2023 was determined by using option pricing models assuming the following:


	March 29, 2023
Risk free interest rate		3.80% - 4.80	%
Expected term (years)		0.5 - 3.0
Expected volatility		70% - 75	%
Expected dividends		0.00	%

Schedule of the Company's financial assets and liabilities that have been measured at fair value


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		March 31, 2023

Description
Liabilities:
Contingent liability		—		—	$	1,305	$	1,305
Warrant liability						4,940		4,940

Total liabilities	$	—	$	—	$	6,245	$	6,245


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2022
Description
Liabilities:
Contingent liability		—		—	$	1,280	$	1,280

Total liabilities	$	—	$	—	$	1,280	$	1,280

Net Loss per Share - Additional Information (Details)	3 Months Ended
Net Loss per Share - Additional Information (Details)	Mar. 31, 2023 shares
Earnings Per Share [Abstract]
Pre-funded penny warrants outstanding	1,576,620

General (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Risk and Uncertainties

Risks and Uncertainties

While the long-term economic impact of either the

COVID-19

t I –

Item 1A – Risk Factors” in the Company’s Annual Report for additional risks associated with its substantial capital requirements.

Liquidity and Going Concern

The Company also expects to use cash and cash equivalents to fund

its

with

34,072 warrants to purchase shares of common stock. The exercise price of the warrants is $0.01.

F-1

Convertible Preferred Stock, par value $0.01 per share (the

“Series F-1 Preferred

Stock”), that are convertible into approximately 7.6 million shares of common stock at a conversion price of $3.30 per share, and two tranches of warrants that are exercisable as follows:

•

Tranche A warrants (the “Preferred Tranche A Warrant

”) for an aggregate exercise price of approximately $34.9 million are exercisable for an aggregate of up to 34,860 shares of Series

F-3

Convertible Preferred Stock, par value $0.01 per share (the

“Series F-3 Preferred

•

Tranche B warrants (the “Preferred Tranche B Warrant

,” together with the Preferred Tranche A Warrant, the “Preferred Warrants”) for an aggregate exercise price of $24.9 million are exercisable for an aggregate of up to 24,900 shares of Series

F-4

Convertible Preferred Stock, par value $0.01 per share (the “Series

F-4

Preferred Stock” and, together with the Series

F-3

The shares of Series

F-1

Convertible Preferred Stock, and accompanying warrants, were issued at a price of $1,000 per share. Conversion of the Series

F-1

from the private placement

, before deducting the fees paid to the placement agent and the financial advisors and other financing expenses payable

by the Company.

See Note 9 – Preferred Purchase Agreement for additional details related to the Series F Preferred Offering.

	•		A Preferred Tranche A Warrant (the “Common Tranche A Warrant’) for an aggregate exercise price of approximately $0.1 m illion are exercisable for an aggregate of up to 31,110 shares of common stock until the earlier of 3/31/2026 or 21 days following the Company’s announcement of receipt of FDA approval for HEPZATO; and

	•		A Preferred Tranche B Warrant (the “Common Tranche B Warrant” and, together with the Common Tranche A Warrant, the “Common Warrants”) for an aggregate exercise price of $0.1 million are exercisable for an aggregate of up to 16,666 shares of common stock until the earlier of 3/31/2026 or 21 days following disclosure of the Company’s public announcement of recording at least $10 million in quarterly U.S. revenue from the commercialization of HEPZATO (collectively, the “Common Financing”). The shares of common stock issuable upon exercise of the Common Warrants collectively are referred to herein as the “Common Warrant Shares”.

See Note 10 – Stockholders’ Equity – Equity Offerings and Placements – Common Purchase Agreement for additional details related to the Common Offering.

Basis of Presentation

10-Q

and Article 10 of Regulation

S-X.

They include the accounts of all wholly owned subsidiaries and all significant inter-company accounts and transactions have been eliminated in consolidation.

Warrant Liabilities

Mezzanine Equity

Recently Adopted and Issued Accounting Pronouncements

Revision of Previously Issued Quarterly Financial Statements

million for

the first quarter of 2022, $0.5

million for

the second quarter of 2022 and $0.4

million for

the third quarter of fiscal 2022. The share-based

compensation adjustment is a

non-cash

adjustment and did not have any impact on the cash balances for the Company.

The following tables contain the financial

The Company has not amended its previously filed Quarterly Reports on Form

10-Q

for the three quarterly periods ended September 30, 2022. The impact of the revision on the Company’s financial statements for the first quarter of 2022 is reflected in the following table:


	As previously report			Adjustment			As revised
Balance Sheet for March 31, 2022 (unaudited)
Additional paid-in capital	$	434,305		$	797		$	435,102
Accumulated deficit		(429,179	)		(797	)		(429,976	)
Consolidated Statement of Operations and Comprehensive Loss for the three months March 31, 2022 (unaudited)
Research and development expenses		4,240			241			4,481
Selling, general and administrative expenses		3,648			556			4,204

Total operating expenses		7,888			797			8,685
Operating loss		(7,543	)		(797	)		(8,340	)
Net loss		(8,203	)		(797	)		(9,000	)
Total other comprehensive loss		(8,201	)		(797	)		(8,998	)
Basic and diluted loss per common share		(1.00	)		(0.10	)		(1.10	)
Consolidated statement of Stockholders’ Equity (Deficit) for the three months ended March 31, 2022 (unaudited)
Compensation expense for issuance of stock options		1,474			797			2,271
Net loss		(8,203	)		(797	)		(9,000	)
Consolidated Statement of Cash Flows for the three months ended March 31, 2022 (unaudited)
Net loss		(8,203	)		(797	)		(9,000	)
Stock option compensation expense		1,474			797			2,271
Balance Sheet for June 30, 2022 (unaudited)
Additional paid-in capital		435,922			1,299			437,221
Accumulated deficit		(438,836	)		(1,299	)		(440,135	)

Inventories

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventories

(3)	Inventories

Inventories consist of the following:


	March 31, 2023		December 31, 2022
Raw materials	$	811	$	763
Work-in-process		1,410		1,102
Finished goods		116		133

Total inventories	$	2,337	$	1,998

Stockholders' Equity - At-the-Market Offering - Additional Information (Details) - USD ($)				3 Months Ended
	Dec. 31, 2022	Jul. 20, 2022	Aug. 18, 2020	Mar. 31, 2023	Mar. 31, 2022
Stockholders Equity Note [Line Items]
Proceeds from issuance of private placement				$ 22,960,000	$ 0
Number of Shares Sold				0
Private Placement [Member]
Stockholders Equity Note [Line Items]
Proceeds from issuance of private placement	$ 6,200,000	$ 5,000,000
Private Placement [Member] \| Pre Funded Warrants [Member]
Stockholders Equity Note [Line Items]
Warrants issued to purchase of common stock	692,042	566,751
Warrants issued to purchase of common stock, Price per warrant	$ 2.89	$ 3.97
Exercise price of warrant	$ 0.01	$ 0.01
Private Placement [Member] \| Common Stock [Member]
Stockholders Equity Note [Line Items]
Shares issued in public offering	1,448,889	690,954
Shares issued, price per share	$ 2.9	$ 3.98
Cantor Fitzgerald & Co [Member]
Stockholders Equity Note [Line Items]
Percentage of commission on aggregate gross proceeds			3.00%
Maximum [Member] \| Cantor Fitzgerald & Co [Member]
Stockholders Equity Note [Line Items]
At-the-market offering, aggregate offering price			$ 17,000,000
Legal fees and disbursements			$ 50,000

Loans and Convertible Notes Payable - Summary of Loans and Convertible Notes Payable (Details) (Parenthetical)	3 Months Ended
	Mar. 31, 2023 USD ($)
Equity Method Investments And Cost Method Investments [Abstract]
Percentage of final payment included in gross amount	4.25%
Final payment	$ 467,500

Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

(12)	Income Taxes

As discussed in “Note 14—Income Taxes” to the notes to the consolidated financial statements contained in the Annual Report, the Company has a valuation allowance against the full amount of its net deferred tax assets. The Company currently provides a valuation allowance against deferred tax assets when it is more likely than not that some portion or all of its deferred tax assets will not be realized. The Company has not recognized any unrecognized tax benefits in its balance sheet.

The Company is subject to income tax in the U.S., as well as various state and international jurisdictions. The federal and state tax authorities can generally reduce a net operating loss (but not create taxable income) for a period outside the statute of limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period within the statute of limitations. Additional information regarding the statutes of limitations can be found in Note 14 Income Taxes of the Company’s Annual Report.

The Inflation Reduction Act of 2022 included tax legislation that became effective in

the

first quarter of 2023. Significant legislation for corporate taxpayers includes a corporate alternative minimum tax of 15% for companies with $1 billion or more in average net financial statement profits over the three previous years, as well as a 1% indirect excise tax on the repurchase of shares by a publicly traded company. The Company does not expect this legislation to have an effect on the tax provision as of March 31, 2023, however the Company will continue to evaluate the effect on the tax provision each reporting period.