dcth-10q_20210331.htm

10-Q 1 dcth-10q_20210331.htm 10-Q dcth-10q_20210331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2021

☐	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.)

1633 Broadway, Suite 22C

New York, NY 10019

(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 ☒ No ☐

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 ☒ No ☐

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. ☐

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

As of May 11, 2021, 6,472,398 shares of the Company’s common stock, $0.01 par value, were outstanding.

SYSTEMS, INC.

Table of Contents

		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	3
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021 and 2020	4
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three months ended March 31, 2021 and 2020	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	6
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19
Item 4.	Controls and Procedures	19

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 6.	Exhibits	21

SIGNATURES		22

DELCATH SYSTEMS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)

	March 31,			December 31,
	2021			2020
Assets
Current assets
Cash and cash equivalents	$	26,600		$	28,575
Restricted cash		50			181
Accounts receivable, net		75			57
Inventories		1,109			855
Prepaid expenses and other current assets		2,369			2,670
Total current assets		30,203			32,338
Property, plant and equipment, net		1,321			1,351
Right-of-use assets		791			946
Total assets	$	32,315		$	34,635

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	1,234		$	1,774
Accrued expenses		5,927			5,241
Deferred revenue, current		502			525
Lease liabilities, current		433			495
Convertible notes payable, current		2,000			2,000
Total current liabilities		10,096			10,035
Deferred revenue, non-current		1,856			2,072
Lease liabilities, non-current		357			450
Total liabilities		12,309			12,557

Commitments and contingencies (Note 13)		—			—

Stockholders' equity
Preferred stock, $.01 par value; 10,000,000 shares authorized; 20,480 and 20,631 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		—			—
Common stock, $.01 par value; 40,000,000 shares authorized; 6,251,257 and 5,996,101 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		63			60
Additional paid-in capital		422,027			417,449
Accumulated deficit		(402,074	)		(395,327	)
Accumulated other comprehensive income		(10	)		(104	)
Total stockholders' equity		20,006			22,078
Total liabilities and stockholders' equity	$	32,315		$	34,635

See accompanying Notes to Condensed Consolidated Financial Statements.

DELCATH SYSTEMS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share data)


	Three months ended March 31,
	2021			2020
Product revenue	$	261		$	176
Other revenue		127			118
Cost of goods sold		(112	)		(78	)
Gross profit		276			216

Operating expenses:
Research and development expenses		3,707			2,974
Selling, general and administrative expenses		3,296			2,316
Total operating expenses		7,003			5,290
Operating loss		(6,727	)		(5,074	)

Change in fair value of the warrant liability, net		—			(2,832	)
Interest expense, net		(41	)		(36	)
Other income		21			81
Net loss		(6,747	)		(7,861	)

Other comprehensive (loss) income:
Foreign currency translation adjustments		94			65
Total other comprehensive loss	$	(6,653	)	$	(7,796	)

Common share data:
Basic loss per common share	$	(1.04	)	$	(108.07	)
Diluted loss per common share	$	(1.04	)	$	(108.07	)

Weighted average number of basic shares outstanding		6,496,922			72,740
Weighted average number of diluted shares outstanding		6,496,922			72,740


See accompanying Notes to Condensed Consolidated Financial Statements.

DELCATH SYSTEMS, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share and per share data)

	Preferred Stock				Common Stock
	$0.01 Par Value				$0.01 Par Value
	No. of Shares		Amount		No. of Shares		Amount		Additional Paid in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income			Total
Balance at January 1, 2021		20,631	$	—		5,996,101	$	60	$	417,449	$	(395,327	)	$	(104	)	$	22,078
Compensation expense for issuance of stock options		—		—		—		—		2,148

SEC Form 10-Q filed by Delcath Systems, Inc.