dcth-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 10-Q

______________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


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

For the transition period from ___________ to ___________

Commission File Number: 001-16133

______________________

DELCATH SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

______________________


Delaware			06-1245881
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

566 Queensbury Avenue

Queensbury, NY 12804

(Address of principal executive offices)

(212) 489-2100

(Registrant’s telephone number, including area code)

______________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value per share

DCTH

The Nasdaq Capital Market

______________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of July 29, 2024, 27,999,522 shares of the Company’s common stock, $0.01 par value, were outstanding.

Table of Contents

DELCATH SYSTEMS, INC.

Table of Contents


		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements

	Unaudited Condensed Consolidated Balance Sheets as of Ju ne 30 , 2024 and December 31, 2023	3

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three an d six months ended June 30 , 2024 and 2023	4

	Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended Ju ne 30 , 2024 and 2023	5

	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2024 and 2023	7

	Notes to the Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II—OTHER INFORMATION		31

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 3.	Defaults Upon Senior Securities	31

Item 4.	Mine Safety Disclosure	31

Item 5.	Other Information	31

Item 6.	Exhibits	32

SIGNATURES		34

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DELCATH SYSTEMS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)


	June 30, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	14,782	$	12,646
Restricted cash	—		50
Short-term investments	5,124		19,808
Accounts receivable, net	3,726		241
Inventory	6,316		3,322
Prepaid expenses and other current assets	1,451		1,091
Total current assets	31,399		37,158
Property, plant and equipment, net	1,422		1,352
Right-of-use assets	1,092		103
Total assets	$	33,913	$	38,613
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	3,279	$	1,012
Accrued expenses	4,418		5,249
Lease liabilities, current	103		37
Loan payable	—		5,239
Convertible notes payable	4,491		4,911
Total current liabilities	12,291		16,448
Warrant liability	15,809		5,548
Lease Liabilities, non-current	989		—
Other liabilities, non-current	632		840
Total liabilities	29,721		22,836
Commitments and contingencies (see Note 14)
Stockholders’ equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 12,342 and 24,819 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	—		—
Common stock, $0.01 par value; 80,000,000 shares authorized; 27,931,393 shares and 22,761,554 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	279		228
Additional paid-in capital	533,919		520,576
Accumulated deficit	(530,014)		(505,162)
Accumulated other comprehensive loss	8		135
Total stockholders’ equity	4,192		15,777
Total liabilities and stockholders’ equity	$	33,913	$	38,613

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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DELCATH SYSTEMS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share data)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Product revenue	$	7,766	$	495	$	10,905	$	1,092
Total revenues	7,766		495		10,905		1,092
Cost of goods sold	(1,519)		(150)		(2,422)		(331)
Gross profit	6,247		345		8,483		761
Operating expenses:
Research and development expenses	3,394		3,555		7,094		8,131
Selling, general and administrative expenses	6,765		4,787		15,579		8,952
Total operating expenses	10,159		8,342		22,673		17,083
Operating loss	(3,912)		(7,997)		(14,190)		(16,322)
Change in fair value of warrant liability	(9,755)		1,160		(10,367)		1,160
Interest expense, net	(84)		(371)		(283)		(1,059)
Other (expense) income	10		6		(12)		$	19
Net loss	(13,741)		(7,202)		(24,852)		(16,202)
Other comprehensive (loss) income:
Unrealized gain (loss) on investments	(141)		—		(133)		—
Foreign currency translation adjustments	(8)		—		6		19
Total comprehensive loss	$	(13,890)	$	(7,202)	$	(24,979)	$	(16,183)
Common share data:
Basic and diluted loss per common share	$	(0.48)	$	(0.58)	$	(0.93)	$	(1.35)
Weighted average number of basic and diluted shares outstanding	28,364,731		12,463,665		26,625,955		12,035,738

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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DELCATH SYSTEMS, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share data)


	Preferred Stock $0.01 Par Value			Common Stock $0.01 Par Value			Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
	No. of Shares	Amount		No. of Shares	Amount
Balance at January 1, 2024	24,819	$	—	22,761,554	$	228	$	520,576	$	(505,162)	$	135	$	15,777
Compensation expense for issuance of stock options	—	—		—	—		2,895		—		—		2,895
Compensation expense for Employee Stock Purchase Plan	—	—		—	—		50		—		—		50
Private placement -issuance of common shares, net of expenses	—	—		876,627	8		6,904		—		—		6,912
Issuance of common stock with the employee stock purchase plan	—	—		21,140	—		74		—		—		74
Conversion - F-3 Preferred to Common	(8,010)	—		1,779,998	18		(17)		—		—		1
Net loss	—	—		—	—		—		(11,111)		—		(11,111)
Unrealized gain on investments	—	—		—	—		—		—		8		8
Foreign currency translation adjustments	—	—		—	—		—		—		14		14
Balance at March 31, 2024	16,809	$	—	25,439,319	$	254	$	530,482	$	(516,273)	$	157	$	14,620
Compensation expense for issuance of stock options	—	—		—	—		3,021		—		—		3,021
Compensation expense for Employee Stock Purchase Plan	—	—		—	—		48		—		—		48
Prior quarter private placement - expenses	—	—		—	—		(141)		—		—		(141)
Warrant exercise and conversion - F-4 Preferred to Common	—	—		41,666	—		355		—		—		355
Conversion - F-3 Preferred to Common	(3,010)	—		668,888	7		(7)		—		—		—
Conversion - F-2 Preferred to Common	(1,457)	—		441,514	4		(4)		—		—		—
Pre-funded warrant exercise	—	—		1,307,706	13		(3)		—		—		10
Stock option exercise	—	—		32,300	1		168		—		—		169
Net loss	—	—		—	—		—		(13,741)		—		(13,741)
Unrealized loss on investments	—	—		—	—		—		—		(141)		(141)
Foreign currency translation adjustments	—	—		—	—		—		—		(8)		(8)
Balance at June 30, 2024	12,342	—		27,931,393	279		533,919		(530,014)		8		4,192

Table of Contents


	Preferred Stock $0.01 Par Value			Common Stock $0.01 Par Value			Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
	No. of Shares	Amount		No. of Shares	Amount
Balance at January 1, 2023	11,357	$	—	10,046,571	$	100	$	451,608	$	(457,484)	$	(83)	$	(5,859)
Compensation expense for issuance of stock options	—	—		—	—		1,661		—		—		1,661
Private placement -issuance of common shares, net of expenses	—	—		19,646	1		55		—		—		56
Issuance of common stock with the employee stock purchase plan	—	—		15,417	—		47		—		—		47
Net loss	—	$	—	—	$	—	$	—	$	(9,000)	$	—	$	(9,000)
Foreign currency translation adjustments	—	—		—	—		—		—		19		19
Balance at March 31, 2023	11,357	$	—	10,081,634	$	101	$	453,371	$	(466,484)	$	(64)	$	(13,076)
Compensation expense for issuance of stock options	—	—		—	—		1,661		—		—		1,661
Conversion of Preferred F-1 shares to common shares	—	—		4,629,539	47		11,222		—		—		11,269
Preferred F-2 Shares Issuance	9,624	—		—	—		7,099		—		—		7,099
Pre-funded warrant exercise	—	—		538,828	5		—		—		—		5
Issuance of common stock related to stock option exercises	—	—		468	—		2		—		—		2
Net loss	—	—		—	—		—		(7,202)		—		(7,202)
Balance at June 30, 2023	20,981	—		15,250,469	153		473,355		(473,686)		(64)		(242)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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DELCATH SYSTEMS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Six months ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(24,852)	$	(16,202)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock option compensation expense	6,014		3,322
Depreciation expense	62

SEC Form 10-Q filed by Delcath Systems Inc.